Beginning today, Amazon is starting a new program, called Amazon Source, through which bookstores and other retailers can sell Kindle devices and in return receive 10% of the revenue from every Kindle e-book sold for a two-year period. Under the program, which Amazon v-p for Kindle Russ Grandinetti said is an outgrowth of a successful partnership the company began with the U.K. bookstore chain Waterstones in 2012, retailers interested in selling Kindles have two options: order Kindles for a 9% discount off the list price and a 35% discount on accessories; or receive a 6% discount on devices and a 30% discount on accessories and earn 10% of the revenue from Kindle e-books sold for two years.
Asked why retailers, many of whom--especially independent booksellers--view Amazon as their archenemy, would sell devices that could potentially drain sales from their stores, Grandinetti said that in a market where digital sales have grown more important, the sale of digital devices will make stores more relevant to consumers. He said Amazon believes in the future of print books, but observed that it is clear many readers want to buy both print books and e-books. By offering Kindle devices, retailers would be expanding the type of merchandise they can offer consumers and give them another reason to shop at their stores.
Several hundred booksellers already sell e-reading devices in a deal with Kobo under which they too get discounts on devices and accessories and earn a slice of e-book sales for as long as the customer owns his or her device. Grandinetti said retailers could start the clock ticking on a new two-year period for earning revenue if they sell an upgrade to a device to a customer who already bought one and noted that since Amazon will continue to produce new machines retailers will have lots of opportunities to sell different devices.
Amazon tested Amazon Source with two stores near its Seattle headquarters--the University of Puget Sound Campus Bookstore and the trade indie JJ Books of Bothell, Wa. In Amazon's press release store co-owner Jason Bailey commented on the deal: “JJ Books is excited to expand our selection to now include Kindle devices for our customers. We are selling Kindle e-readers, tablets, and accessories in our store to expand our customer base and build toward the future bookstore model. We feel that Amazon is the leader for e-readers. Teaming up with Amazon to bridge the move to electronic books will help us find a means of long-term viability for our independent bookstore. Kindle will help us bridge the evolution of the bookstore into the Internet age.”
Although Amazon is aiming for the bookstore market, any retailer can join Amazon Source. A spokesperson noted that “as long as an offline retailer has a business license/tax certificate they’re welcome to sign up, though we’ll work closely with retailers to pick the best experience for them and their customers.”
Initial reaction from independent booksellers was cool toward Amazon Source. Roxanne Coady, owner of RJ Julia Booksellers in Madison, Ct., said she has no plans to participate. Joining Source, Coady said, is "basically handing over our customers. It's a seduction, but like any seduction the love will fade." Moreover, Coady said joining Source would give the wrong signal to customers. "You're giving your customers permission that it really doesn't matter where you buy your books."
The reaction from Chris Morrow, president of Norhtshire Bookstores in Manchester Center, Vt. and Saratoga Springs, N.Y. was much the same, equating the offer to the time Borders let Amazon run its Web site "and we know how that turned out." He said there would be only a "marginal benefit" to receiving two years of e-book sales and that in addition to business concerns "there is certainly no alignment of values that would make me want to partner with Amazon to sell e-books. I think most bookstores will react to this offer the way we reacted to Amazon Publishing--no thanks."
