Amazon Source Offers Kindle Discounts & E-book Commissions to Bookstores, Retailers

Amazon is looking to put its Kindle hardware in some interesting places; namely, in the stores of independent booksellers and in retail locations that the company has not already partnered with. To incentivize these stores to carry Kindle e-book readers and Kindle Fire tablets, Amazon is offering two plans that offer either discounted Kindle hardware with a 10% cut of e-book sales for two years, or a more steep hardware discount with no e-book sales commission.

The first plan, called the “Bookseller Program,” is Amazon’s attempt to get its hardware into your local bookstore. These stores can purchase Kindle devices at a 6% discount from MSRP (Manufacturer Suggested Retail Price) and then continue to profit each time a customer purchases an e-book through Amazon. So the price of a Kindle Paperwhite, for example, is $119. A bookstore could purchase these readers in bulk at close to $112 apiece and then sell them for around $7 more. Then, over the next two years, that store could make about $1 for each $10 Kindle e-book the customer purchased.

The second plan does away with the e-book commission, as it’s more tailored toward retailers who aren’t in the business of selling books. This program is called the “General Retailer Program” and it lets stores purchase Kindle devices in bulk at a 9% discount. So that $119 Kindle Paperwhite can be bought at wholesale for a bit more than $108.

Both programs offer a 35% discount on Kindle-related accessories, so products like cases and chargers can be bought at the same discount whether a store is enrolled in the “Bookseller Program” or the “General Retailer Program.”

For retailers that don’t devote a lot of energy to the business of selling books, the General Retailer Program looks like a win. These retailers can snap up Kindle hardware at a nice discount and resell them whether they’re a local electronics store or a Walmart. And there isn’t a lot of risk involved, either — should a retailer have second thoughts about carrying Kindle hardware, the store’s first order can be returned within six months — “no questions asked,” according to Amazon.

If I were the owner of a bookstore, I’d be a bit more leery about the Amazon Source Bookseller Program. Paperback and hardcover books are the reasons that bookstores exist, and while these stores can profit off of the sale of a Kindle device and receive a commission for Kindle book sales over two years, that money train will eventually grind to a halt. After two years, a Kindle buyer still has a Kindle and a bookstore no longer profits from the books that customer is buying.

It feels like a bookstore would be contributing to its own demise by taking part in the BookSeller Program. I’m no Business 101 professor, but selling someone a way to buy from the competition doesn’t seem wise.

You can learn more about the Amazon Source program on Amazon’s site. If you have some thoughts of your own on Amazon’s new initiative, I’d love to hear your thoughts on them.