In the same week at the Kindle Fire HDX 8.9" became available to US customers, Amazon introduced Amazon Source, a new program that enables independent bookstores and other retailers to sell Kindle devices and in return receive 10% of the revenue from every Kindle e-book sold for a two-year period.
The terms of the scheme, which Amazon VP for Kindle Russ Grandinetti explained is an outgrowth of a successful partnership the company began with the UK bookstore chain Waterstones in 2012 offers retailers interested in selling Kindles two options:
- General Retail - 9% discount off the list price of Kindles and a 35% discount on accessories
- Bookseller - 6% discount on devices and a 30% discount on accessories and earn 10% of the revenue from Kindle e-books sold for two years
After a pilot with book stores local to Amazon's headquarters the scheme is being opened up to book stores in 25 US states. But what do booksellers think? Despite the favourable quotes from two stores in the pilot program included in Amazon's press release, the reactions of other independent booksellers suggest they are far from convinced by the idea.
On its blog, New York-based publisher Melville House has posted responses from bookshop owners that range in the degree of outrage expressed, describing the scheme as:
"a dagger disguised as an olive branch",
"a Trojan Horse style attempt to gain access to our customers"
"like the bully at school who steals my lunch money and then invites me to sit down and share a chocolate milk (and only gives me, like, half a sip)"
"Some booksellers will certainly be tempted by this notion, as it has the appearance of keeping up with the Jones’. But those who do will be inviting hungry foxes into the henhouse.”
"This is no kind benevolence on their part, but, rather, a calculated move to squeeze every last hand-wringed cent they can out of all sectors of the book business. This is a small revenue token to take what they can not touch on their own: our loyal and dedicated indie bookstore customers.”
The booksellers position to be neatly summed up in this quote:
“We sell Kindles for essentially no profit, the new Kindle customer is in our store where they can browse and discover books, the new Kindle customer can then check the price on Amazon and order the ebook. We make a little on their ebook purchases, but then lose them as a customer completely after two years. Doesn’t sound like such a great partnership to me."
Even so the scheme presents a dilemma for independent bookstores. Many customers do want the opportunity to buy Kindle devices - as gifts, if not for themselves - and being able to buy them at local bookstore will appeal to them as an attractive option. In addition those who do own Kindles may see the 10% commission that bookstores will earn as a dispensation that allows them to buy e-books while still feeling they are supporting their local book store.
No wonder the bookstores are worried. This appears to be a very clever sting on Amazon's part.