PaidContent reports that the US’s second-largest bookstore chain, Books a Million, is following in the footsteps of Barnes & Noble and proclaiming it will not stock Amazon-published titles in its brick-and-mortar stores. It’s not clear whether, like Barnes & Noble, they will sell the titles online. Books a Million sells a version of the Nook as its own e-reader.

There’s a Books a Million store in Joplin, Missouri, and I stopped by it a few months ago. I wasn’t particularly impressed. Unlike Barnes & Noble, the store does not offer free wifi for its customers—you have to pay for it. (How last-decade.)

Meanwhile, Jason Calacanis reports hearing from “a very credible” (but anonymous) source that Amazon is going to launch its own brick and mortar retail stores. While the rumor has been around before, and on the face of it seems absolutely crazy, Jeff Bezos has done crazy things before and look at where he is today. And as the New York Times Bits blog points out, before 2001 the idea of Apple launching retail stores seemed far-fetched, but look at them now.

Jason throws out some ideas on what Amazon might do with the floor space—show you demonstration models then have you order the product from Amazon for shipping to your house, or perhaps provide a physical library for Amazon Prime subscribers in addition to the electronic ones. Whatever he does, it will probably have the same sort of unusual twist to it that has characterized a lot of Amazon’s new ventures.

The interesting thing to me is that, if this does happen, the big chain stores like Wal-Mart, Best Buy, and of course Barnes & Noble could find themselves hoist by their own petards. They have been campaigning to strip away Amazon’s tax-free advantage. Having physical property—their retail stores—in those states in addition to their on-line presence means chains like Best Buy or Barnes & Noble have to collect sales tax on physical items sold on-line. Amazon hasn’t had to do that until now except in states where it has distribution centers.

But if they succeed in making Amazon pay sales tax everywhere, suddenly the only reason for Amazon not to put physical stores everywhere vanishes—and so does the one big advantage that the brick and mortars have: instant gratification. I bought a Logitech K360 wireless keyboard at Best Buy today for $30, though I could have gotten it for $25 from Amazon. (Well, $24.99, so I would have had to add another item to qualify for free shipping.) But if I bought it from Amazon, I couldn’t use it right now.

If Amazon stocks even just its more popular items in physical inventory, and offers bennies to Prime subscribers and other Amazon regulars, it could start to draw more and more people away from those other stores for immediate purchases as well as the ones that can wait. And as a fringe benefit, it would provide a place for online-ordering customers to direct their packages to be sent to so they could pick them up instead of having to be home for delivery—as Wal-Mart and Best Buy already do. We already know Amazon has had package pickup on its mind, what with the locker kiosks it has been placing in convenience stores in various locations.

Oh, and it would also provide a place where people could go to buy those Amazon-published paper books in person—the ones that Barnes & Noble and Books a Million are declining to carry.

Of course, there’s still nothing to suggest that this is anything more than another unfounded anonymous rumor. But if it does come to pass, wow. Amazon could shake the brick and mortar landscape as thoroughly as it has shaken the e-commerce one.

(Found via GalleyCat.)


  1. I’d look for Amazon to do what WallMart does, although the geography will be the exact opposite. Historically, WallMart has placed its stores in small-to-medium-sized towns where its only competition has been locally owned retail stores with high overhead. It avoids big cities where it would have to compete with other big-box retailers. In Seattle where I live, for instance, the closest WallMart is in the far-distant suburb of Kent.

    If Amazon goes ‘bricks and mortar’ retail it will be in the upscale, boutique neighborhoods of major cities. It’ll offer bestsellers at heavy discounts, perhaps print its own books onsite, and sell non-book items that offer high profit margins. Amazon will focus on skimming the cream off the book market. It’ll get even with B&N for not selling its books. Corporative executives tend to have big egos.

    Amazon may also do what Apple has begun to do, allowing people to order online and pickup at an Amazon store. Items in stock could be picked up that day. Other items could be picked up when a truck delivers them. That’d eliminate their higher to-the-home shipping costs and get people into their stores for impulse buys.

    But the move has its downside and that’s not just sales tax. Attractive store space is expensive and courteous, knowledgable retail staff in big cities cost more than grab-and-stuff employees at a giant shipping center in a town with a depressed economy.

    Finally, keep in mind that Amazon will often explore an approach, testing it in one or two markets for profitability. For a time in Seattle I got free shipping even of items costing just a few dollars via Amazon’s Fresh food delivery trucks. Amazon even threw in a free shopping bag to hold the item. Like others, I shameless exploited the scheme, getting $9.95 books in a shopping bag worth perhaps $2.95 with no delivery charges. After about a year, Amazon dropped the idea, knowing not just that it wasn’t profitable but why it wasn’t. That’s information they can use and they may do the same with retail stores, counting their beans very carefully and looking for a scheme that makes money. What doesn’t work will get dropped.

  2. An Amazon store would be great if they did it right. Of course, what I think is right might not be right for other readers. I love the Elliot Bay Book Company in Seattle, but for me it’s just too far out of the away for a causal afternoon browse. There is depth and breadth to their stock and I can explore the book selections for hours. There is a Barnes & Noble in the suburbs, but, frankly, the stock is basically just series, bestsellers, vampires, more vampires, and other popular stuff. I could be there in less than 15 minutes if I ever had a reason to go.

    I would an least like for Amazon try opening a store there serves more than just the book and merchandise equivalent to fast food to the folks outside the city limits. They could still sell the urban teenage vampire romance, but stock 10 copies instead of 50 and let the selfs display more variety.

  3. So Amazon will get into yet another low margin business? And now they would have to cede their advantage in not paying sales tax on top of that? Whole idea sounds nuts to me.

    Anyway Amazon already have showrooms – they are just called Best Buy.

    What needs fixing is Amazon’s deteriorating margins and opening physical stores is not going to help with that.

  4. Some items do not lend themselves to online sales – the types of merchandise sold by Best Buy for example. If your new HDTV or computer dies, you can return it during the first 30 days and receive a replacement the same day. No boxing, shipping, or waiting. Books aren’t subject to such potential defects nor do they often require replacement.

    • And if something goes wrong with it during the warranty period (if it’s an Insignia or Dynex) you can take it back to the Geek Squad counter at the store to get it serviced instead of having to ship it off. (If it has to be sent off to a regional repair center, Best Buy takes care of that.) Yeah, that’s another advantage Best Buy has. Perhaps Amazon could do something similar.

  5. I just can’t see Amazon opening its own stores. It would be assuming the cost structure of its brick & mortar competitors, which means that it wouldn’t be able to maintain its price advantage, or like B&N and Best Buy, it would have to have different prices in-store and online. Also, Amazon could only stock a small subsection of the products that it sells online. It’s extremely unlikely to happen.

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