This story was updated on November 7, 2013, at 11:13am.
E-commerce giant Amazon.com Inc. (NASDAQ:AMZN) is attempting to team up with independent bookshops by tempting them with discounted Kindle e-readers that they can sell, and earn revenue from with a 10 percent cut of subsequent e-book sales.
The move comes despite longstanding tensions between Amazon and small bookshops, as traditional bookstores have seen customers turn to Amazon for cheaper books and broader selections. Shoppers often use brick-and-mortar shops as “showrooms” for items they inspect and later buy online, for less.
Amazon doesn’t specify the amount of discount offered to book retailers for the Kindle, which is priced at $69 on Amazon.com.
One key feature is that Amazon will also let retailers earn a 10 percent cut on every Kindle e-book bought on the devices sold from their stores, for two years after purchase. That’s a strange twist, but may amount to little added revenue, given that e-books typically cost $12 to $15. Still, it could be seen by some as a way for booksellers to monetize e-books, which they don’t profit off at present.
Acting oddly generous, Amazon has even offered to buy back unsold Kindles for up to six months after their first order, an offer with no apparent strings attached.
Despite the popular narrative that Amazon has killed off independent booksellers, membership in the trade group the American Booksellers Association has risen from 2009 to 2012, reported Quartz.
In its most recent quarter, Amazon launched the slim third incarnation of Kindle Fire (aka Kindle Fire HDX), which allows Amazon Prime instant video downloads and 24-hour one-button tech support. It also announced the Kindle MatchBook, a program which lets customers buy the Kindle edition of print books they’ve bought on Amazon for $3 or less.
Amazon’s U.S. sales of Kindles outpace its international sales, according to the company’s most recent earnings call. The company doesn’t break out Kindle unit sales specifically, but Morgan Stanley analysts said in August that Amazon should earn $4.5 billion from Kindles in 2013, up 26 percent from 2012, reported AllThingsD.
Amazon has been sued several times over Kindle-related patents, according to regulatory filings, but it’s unclear what merit those lawsuits have.
Interestingly, bookshops can’t both earn a steep discount and hang onto a 10 percent cut. They must choose one offer or another, with eligibility dependent on which states their stores are in. They will be “allowed” to sell other e-book devices like the Barnes & Noble Inc. (NYSE:BKS) Nook in their stores, according to an Amazon FAQ, in case that was ever in question.
Amazon’s publishing arm has also received criticism from independent booksellers, reports the New York Times.
UPDATE: The American Booksellers Association emailed IBTimes with a comment after publication.
""It appears that Amazon.com has again fashioned a program that benefits the retailer it cares about most -- that is, Amazon. Based on available information, independent bookstores in more than half the country -- 26 states -- are ineligible to receive commissions for e-book sales."
"Given Amazon’s aggressive corporate tactics and their long-standing strategy to avoid the collection of sales tax, we don’t see this new program as being at all credible," read the statement.
The ABA already has a partnership with the Kobo e-reader, through which it says hundreds of independent booksellers already offer e-readers and e-books.