Amazon (AMZN), the Internet retailer whose rise, along with other large chain bookstores, helped spell doom for thousands of independent bookstores, has an audacious proposition. The Seattle-based company wants booksellers and other brick-and-mortar retailers to sell its Kindle e-reader. In return, Amazon is offering bookstores a small profit on Kindle sales, as well as 10 percent of e-books purchased on the devices for the first two years.
Amazon, not surprisingly, is pitching the program as an opportunity. Media outlets have likened the program, which appears to offer a short-term incentive for booksellers to cannibalize their customer base, to a Trojan horse, or as PandoDaily put it, a “linen-wrapped time bomb.”
Those metaphors imply that independent bookstores are likely to be fooled. Amazon has been calling independents for months without much success, says Dennis Loy Johnson, publisher of Melville House. Amazon’s press release announcing the program noted participation of two bookstores in the company’s home state of Washington. That didn’t impress Johnson, who says he’s unaware of any leading U.S. independents that have joined.
That’s partially because the economics of the new Amazon program aren’t attractive to booksellers, which can make better margins selling e-books on their own websites, he says. It’s partially because Amazon isn’t particularly well-regarded in the book business. “They basically put out a release saying, now that we’ve killed most of you, we want the rest of you to join us,” says Johnson. “I don’t think you can overrate the animosity booksellers have for the company.” Many small shops already sell e-readers made by Kobo, which also shares the proceeds.
Amazon positions its program as giving book buyers greater choice. “We believe that retailers, online or offline, small or large, should be striving to offer customers what they want—and many customers want to read both digital and print books,” Russ Grandinetti, a vice president for Amazon Kindle, said in a statement. “With Amazon Source, customers don’t have to choose between e-books and their favorite neighborhood bookstore—they can have both.”
Back in May, a bookseller at Skylight Books in Los Angeles published a blog post recounting his conversation with an Amazon employee who was pitching the Kindle program. Before he would consider carrying Kindles, Amazon would have to “stop its predatory business practices such as undercutting the prices of an entire market of products (books) that they themselves do not depend on for revenue and/or creating sleazy apps that encourage people to buy from Amazon while they’re actually standing in a bookstore,” he wrote.
He added: The speech wasn’t as “clearly stated in real life partly due to my being flabbergasted at actually being given the opportunity to tell the monster what I think of it.”