Are Small Bookstores Committing Suicide If They Join Amazon’s New Kindle Program?

amazonsourceA common refrain among people in the book business — especially those in the independent bookselling market — is that Amazon is “out to kill small bookstores.” Depending on how one looks at it, the latest scheme from the online retail giant either bolsters or calls BS on that statement.

The program, dubbed Amazon Source, allows small bookstores to not only sell Kindle devices in-store, but to then get 10% of all sales tied to those devices for two years after the device is bought.

On the one hand, Source can provide these bookstores with a revenue stream they might not have had access to as customers increasingly turn to e-books.

It also gives them the opportunity to (presumably) make a bit of money from selling the actual devices, though how much stores make on Kindle device sales is unclear. There is a second version of the Source program that offers a deeper discount on Kindles but no percentage on later e-book sales, which would seem to imply that those in the rev-share version are making a thin margin on Kindle device sales.

Amazon does say that stores that join the program have six months to return any unsold Kindles from their first order of the devices, so that does take away some of the investment costs.

Now let’s look at things through a more skeptical lens.

One could argue that bookstores that join the Source program are only setting themselves up for a long-term bleed that could ultimately leave them dead.

Yes, there may be the short-term boost to sales from customers who come in, buy a Kindle then buy a bunch of e-books from Amazon. But how many of those customers have been forever lost to Amazon?

This may also discourage participating bookstores to beef up their own e-book offerings, figuring it is easier to make commission on the Kindle sales. But at some point, that rug may be pulled out from under them — either when the Source program ends or if Kindle sales dry up.

Additionally, what if the customers who buy those Kindles then spend most of their e-book money on deeply discounted titles? Even worse for the bookstores, some Kindle-buyers will then load up their devices with selections from the vast library of free books available to all Kindle users.

One final issue — and this really goes to whether or not small bookstores will even join the program — is a general distrust of Amazon and its CEO Jeff Bezos by the people in that community.

We talked to sources in the independent book business this morning, who expressed a large amount of skepticism about the program, largely tied to Amazon’s history of business decisions that have a negative impact on bricks-and-mortar bookstores.

The company is well-known to be a brass-knuckle negotiator, demanding bottom-dollar wholesale prices from publishers, who then can’t always afford to make friendly deals with small bookstores.

One source said she wouldn’t be surprised if this program wasn’t at least partly intended to cause some splintering among independent booksellers, as some jump on the bandwagon and others steer clear.

If anyone in the bookselling biz wants to share their viewpoint on this program, write to us at tips@consumerist.com

Meanwhile, the rest of you can give us your opinion on this program in this completely unscientific poll:

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  1. xvdgry57 says:

    Ultimately independent hard copy booksellers will have to forge a consumer model based on collectors and connoisseurs of physical tomes.
    My wife’s generation and older that are attached to the smell and tactile romance of the printed page are dying out. Even though I eschew paper copies for electronic I do have hardback leather bound editions of some of my favorite books; from a practical standpoint it is a wasteful indulgence but I have so few.

    Small booksellers need to learn from the vinyl record resurgence that electronic media is simply complementary to the “authenticity” of the old fashioned medis and often makes the old stuff sell better.

  2. OliverPickles says:

    I love my Kindle and use it almost exclusively. BUT…. I have a huge collection of hardcover books that I re-read, some signed copies of books that I will not part with and many cookbooks. I need a “real” book to cook for some reason :D I love going to book stores and perusing the shelves, but I’m not sure I can keep someone in business. I think embracing the new technology would be the way to stay afloat and still cater to people like me who enjoy the smell of a new book. They may even be able to sell me an e-book or two.

  3. C0Y0TY says:

    The main goal is to get customers through the doors. Kindles will do that, but then the bookseller needs to encourage the customer to buy more than just the Kindle. One way could be to have the physical books next to a Kindle showing the ebooks. There are probably a lot of people for whom the physical book is more attractive and substantial than the ebook. It’s something they would actually own, and won’t disappear if there’s a technical or licensing issue. Features the bookseller can emphasize in its selling materials.