Amazon saves brick-and-mortars? AmazonSource

Amazon saves brick-and-mortars? AmazonSource

Bookstores selling Amazon selling.

That’s basically what’s happening with a new, innovative…even mind-boggling program from Amazon announced in this

press release

Here is the key concept:  your local bookstore can sign up for a program with Amazon. They then sell Kindles in the store, and the store gets ten percent of the purchase price of the Kindle store books you buy on it for the next two years.

It’s an extraordinary idea, and certainly, some bookstores may jump on it.

After all, it may feel like they are going to get ten percent of e-book sales for two years without doing anything…free money, right?

I’m a former brick-and-mortar bookstore manager, and a big fan of Amazon…but like the Golden Ticket in Charlie and the Chocolate Factory, entering the magical world of a genius may not always have positive results. 😉

At the site for the program

https://source.amazon.com/

Amazon calls it “completely worry-free”.  They say:

“If you decide that e-readers and tablets aren’t the right fit for your store, we’ll buy back any tablet, e-reader or accessory that was on your first order, no questions asked.”

This is short-term thinking for the store. If you can get into it with no risk on the hardware, and you simply sit back while the money rolls in from e-book purchases, why not do it?

I’m not telling people not to do it.

It certainly could be a benefit.

It also feels a bit to me like Amazon may have just started a two-year death clock on the independent bookstore, though.

When you sell one of your customers a Kindle, you may be selling them on the idea that they don’t need to come into your store any more.

You get some money from their Kindle store purchases for two years. When those two years are up, you don’t…and will your customer then stop buying e-books from Amazon? Seems unlikely.

For this to work for stores, people have to continue to buy both e-books from Amazon and p-books (paperbooks) from the stores. Yes, many people buy both. One of the questions is going to be whether or not the customers will continue to buy their p-books from your store, when you’ve sold them a Kindle Fire HDX 7″ that lets them buy the same p-book online from Amazon.

I would think that p-book discounts may start showing up in our Special Offers when this deal gets rolling (maybe early next year).

There are a lot of subtleties and complexities to this, and when books are written about Amazon fifty years from now, this may be seen as one of their most brilliant moves.

• It’s great PR (Public Relations): “Amazon saves Mom & Pop bookstores”
• Customers feel like they are “donating” to their local stores
• Every bookstore that joins becomes a salesperson for Amazon
• Every bookstore that doesn’t join loses a competitive advantage with their customers
• People who buy Kindle Fires, in particular, will buy other profitable items, partially because they may become Amazon Prime members. That may make sense in terms of what it will cost Amazon. Buy $200 a year in e-books from Amazon, it only costs them $20 (plus administrative costs). Will they earn more than that $20 on your other purchases (“diapers and windshield wipers”)?
• Veteran booksellers are incentivized to get people to buy Kindle books. Those booksellers may then start writing reviews and blogs, and become Amazon Associates, and make much more of a transition to online (and specifically Amazon)

Amazon has a cost for this for about two years: how many of those bookstores will still be around in two years doing what they are doing now?

If Amazon launches real digital storefronts for bookstores (perhaps something like I wrote about here: Hey, Amazon, buy this: BookAnd), I think many of them may go that way.

It gets even more interesting.

There are actually two programs as part of this announcement. One is for bookstores, and includes the e-book component. The other is for other stores, and gives them a deeper hardware discount, but no e-book cut.

That part about non-bookstores is fascinating. This certainly may mean that your local convenience store, hardware store, grocery store, and so on, start carrying Kindles.

They also risk opening their doors to the wolf, but in a very different way. Depending on weekly (perhaps daily) content sales is different from “Somebody kicked in my door and I need a replacement right now”.

Here is something else: it isn’t available in every US state, just these:

Alaska, Arizona, California, Connecticut, Delaware, Georgia, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Montana, Nevada, New Hampshire, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Texas, Virginia, Washington, West Virginia, Wisconsin

Why is that?

I suspect it has to do with how friendly the state is to Amazon, especially tax-wise. I know California and Amazon (after a messy situation) worked out a deal and are now effectively partnering (Amazon now has fulfillment centers there). I also understand that Maine and Amazon are in dispute right now…and Maine isn’t on the approved list.

Another thing: Amazon is not requiring exclusivity. A store can continue to sell Kobo devices, for example. There may be legal strategy behind that, but there will also be the idea for people that they support the bookstore if they buy the Kindle (in a different way than the other devices). Additionally, space is at a premium in stores (you are always fighting the rent), so will people really allot space to several different brands of devices? You know who used to do that? Borders…and they aren’t around any more.

Do I think this is an evil move by Amazon? Not at all. If I was managing a bookstore still, I’d probably do it.

It feels more like…Amazon is giving stores two years to get their things together as the world of bookselling transitions. Some people may see that as an eviction notice, but maybe it is more like a reverse mortgage: “We’ll pay you now for ownership later.”

I should be clear: I don’t think this wipes out independent bookstores, because many of them don’t need to make a profit. They are there because people love to be in a bookstore, both from the selling and buying sides. They love the community feel and the expertise of the sellers. They like being in the company of other booklovers and, yes, thousands of books all around you. Those stores, and that experience, will be around for a long time.

However, strictly in terms of business, I think the clock is now ticking…

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them