Amazon Offers Retailers A Trojan Horse

Derek Ouellette —  February 1, 2014 — 1 Comment

Online Sales TaxesIn the January 2014 edition of Christian Retailing I learned that Amazon has some pretty huge innovations on the horizon.

One such innovation involves Amazon’s plan to use flying drones to deliver customer orders to their doorsteps within 30 minutes. If you don’t believe just watch this clip from 60 Minutes:

But more to the present, Amazon has begun a program that, on the face of it, sounds like a partnership between them and brick and mortar retail stores. But it seems to me to be little more than a clever way of seductively crawling into bed with your competitors in order to slay them while they sleep. A Trojan Horse.

Its called the “Amazon Source: Bookseller Program” and it’s being offered to big chain stores as well as small family owned and operated outfits. According Christian Retailing, the Bestseller Program

“allows retailers to purchase Kindles for resale at a 6% discount, while also earning a 10% commission on every e-book purchased on the device for two years after the purchase.”

Why is this a bad idea for retailers? Because they are literally handing their customers over to Amazon. Amazon wants to acquire new customers, build an increasing loyalty base and boost e-book sales.

Don’t be fooled in thinking, well it’s only e-book sales or at least we can make a profit off the e-book market.  The last thing you want to do is facilitate a relationship between your clientèle and Amazon. It may be an e-book today. It’ll probably be a hardcover tomorrow. And why not? The Amazon brand is in front of them every time they read an e-book, why wouldn’t they think to order a hardback from them too? Will your company get the brand placement like a Kindle will?

And that relationship you have where you’ll be making 10% off every e-book sale from a Kindle sold from your store? After two years that “partnership” will be gone, and so will the customer.

Amazon is not going anywhere and I don’t fault them for innovating. The future is upon us and it will continue to steam-roll the present, and I think we should embrace that. But I think there remains a place for small and mid-sized book stores, and even if you disagree with that, I wonder about the ethical dimension of Amazon’s approach.

But that’s just me. What do you think?

Derek Ouellette

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a husband, new dad, speaker, writer, christian. see my profile here.
  • http://www.saskatoonnazarene.org Steve Grove

    Shouldn’t the agreement last for the life of the Kindle at least (or the life of the customer?), the same way an agent is paid for the life of the book sold? The book store becomes and agent for Amazon, nothing less in this arrangement.