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Should Book Dealers Take Amazon's Kindle Deal?

Written by Tom Ryan

Taking the old saying, "If you can't beat them, join them," to an extreme, Amazon is offering independent booksellers discounts and other incentives to sell Kindle devices and related e-books.

Through Amazon Source, retailers can choose between two programs:

Bookseller Program: Booksellers receive 10 percent of the price of any Kindle e-books purchased from the devices they sell. The commission payoff lasts for two years. Booksellers also gain a six percent discount off Kindle list prices and 35 percent off Kindle accessories.

General Retail Program: Gain no commission on e-book sales but receive a higher discount on devices off list — nine percent rather than six percent. The 35 percent discount on Kindle accessories is the same. This program is available to all retailers.

An initial back-out plan is also offered. If a retailer no longer want to sell Kindle, Amazon will buy back the inventory for up to six months after their first order, no questions asked.

To many booksellers, the offer was seen as ludicrous coming from an organization blamed for putting many independents out of the business over the last two decades.

The opportunity on its face also didn't have much value to many. Many sell the Kobo reader and customers buy their e-books directly from the store; sales of Kindle e-books would come directly from Amazon, clouding up the commission arrangement.

Amazon's ambitious and aggressive reputation also led many to believe any deal would work against them in the long run. PandoDaily called it a "linen-wrapped time bomb." ABA (American Booksellers Association) president Steve Bercu told Publishers Weekly, "At the end of two years, they've captured your customer. Is a two-year commission worth the price of a customer?"

Amazon would also gain customer data on books sold at independents that "are way more eclectic" than those sold on Amazon, Michael Tucker, owner of Books Inc., a San Francisco chain of 12 stores, told the Times.

With Walmart and Target joining others last year in not selling Kindle devices, Amazon is said to be at a disadvantage to Apple and others with physical stores.

For Amazon's part, with consumers wanting both print and digital book versions, Amazon Source "makes stores more relevant to customers," Russ Grandinetti, VP of Amazon Kindle, told USA Today.

Two stores in Washington state that already signed up for the program mentioned in Amazon's press release indicated they hoped to benefit from the shift toward e-books. Jason Bailey, co-owner of JJ Books in Bothell, WA, told the Times, "I have people coming in with their e-book readers to look at my books and then buy them online. I may have helped sell the book, but I generated income for someone else. Now I have a chip in the game."

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