Should Book Dealers Take Amazon’s Kindle Deal?
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."
- Independent Bookstores Can Now Sell Kindles and Earn 10% from Future Kindle Books Sold – Amazon.com
- Amazon Source – Amazon.com
- Amazon cozies up to bookstores to sell Kindle devices – USA Today
- An Offer From Amazon to Its Most Bitter Rivals – The New York Times (tiered sub.)
- Booksellers Say ‘No’ to Amazon Source – Publishers Weekly
- Indie Booksellers Aren’t Wild About Selling Kindles for Amazon – Bloomberg Businessweek
- Amazon Source isn’t a white flag for independent booksellers, it’s a linen-wrapped time bomb – Pando Daily
- Walmart Also Fires the Kindle – RetailWire
Should independent booksellers take up the Amazon deal? Is Amazon at a major disadvantage with its Kindle offering by not having a physical store presence?
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10 Comments on "Should Book Dealers Take Amazon’s Kindle Deal?"
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Booksellers seethe at the very name of Amazon. Maybe they found the only two booksellers who would sign up for this deal with the devil.
Take the deal and use the two-year period to develop a business model that may work in the longer term.
There is a case to be made for independent booksellers to look at partnering up with Amazon. Let’s face the reality that most of them need to find a much fresher approach to their existing business model.
The problem is that Amazon’s offer is a non-starter. It’s a low ball offer of epic proportions. Amazon wants and needs to get its Kindle into stores, but I don’t believe this offer will get them much traction.
I find it silly that Amazon is bothering with this offer. Surely, they can find more high-volume partners than indie booksellers for Kindle sales. And (as we are seeing in the media), it only serves churn up ill feelings that many book lovers feel for Amazon.
And the other choice is? Hang on to a business model that is basically at “end of life”?
10%? Now that’s ugly.
I agree with Pando Daily’s warning that Amazon Source is a “linen-wrapped time bomb.” What independent bookseller in their right mind would sell this? Why?
Independent book sellers are niche players now anyway… and that’s fine. At least own that.
One of the booksellers I read about said it felt like inviting the fox into the hen house.
The first question that must be answered is will all current and future books are available in ebook format? If the answer is yes, the retail book stores will go the way of Blockbuster. There will always be a market for limited editions and old books for which there is no economic value in converting to e-book. In this case, a specialty bookstore will survive, serving a small market. Note, Amazon does provide this service.
If the customer is using the bookstore to evaluate books and then buy them in e-format, the book store is just a showroom. There will always be people, mostly older, who want paper books, but Amazon built its business serving this group, again leaving little for the corner book store. Understanding this, accepting the Amazon offer will just delay the retail book stores’ demise.
I could see a possible case for used bookstores (yes, all four survivors of the Amazon/ABE-led onslaught) to use Kindle as a way to sell new titles too.
Equally, if bookstores were permitted to run promotions on specific Kindle titles or groups of titles to *complement* rather than substitute for those they have in-store, there could be a little mileage in it – at least Kindle-owning customers who couldn’t find the printed book they were looking for would buy *something*. Maybe.
But there’s a lot of potential downside in both scenarios, for sure.