Wal-Mart Gives Amazon Kindle Products the Boot
September 20, 2012 11:55 PM
comment(s) - last by
Competition between the two has come to this
Wal-Mart reported that it will no longer sell Amazon's e-readers and tablets online or at its brick-and-mortar stores.
Amazon, which makes Kindle e-readers and Kindle Fire tablets, had its products booted from Wal-Mart due to the fact that Amazon is a strong competitive force against brick-and-mortar stores.
Physical retail stores like Wal-Mart and Target have faced tough competition against Amazon in recent years. The huge e-tailer has offered the same products at lower prices, (often) no sales tax and for fast, cheap delivery.
This obviously made it hard for the brick-and-mortars to compete. Stores like Best Buy, Wal-Mart and Target complained that Amazon's lack of
sales tax collection
in most U.S. states was unfair, leading to more and more states demanding that Amazon start collecting (mainly to cover the states' own budget crisis').
At long last, Wal-Mart and friends got their wish when Amazon agreed to start including sales tax in customer orders; however, the e-tailer did so in exchange for more distribution centers throughout the U.S. so that it could
launch a same-day shipping feature
-- a whole new competitive edge in favor of Amazon.
To top it all off, Amazon's e-readers and tablets have been a hit. In fact, Amazon's Kindle Fire tablet has been the only other tab to take a chunk out of the iPad's market share.
Amazon just announced a whole
new generation of Kindle Fire tablets
(Kindle Fire HD), including an updated $199 7-inch Fire; an 8.9-inch version for $299, and a 4G LTE model for $499. On top of that, Amazon is offering 250MB of bandwidth per month, 20GB of cloud storage space, and a $10 in Appstore credit for only $50 per year.
It's easy to see why Wal-Mart is a little upset. It's competition is growing and offering even better offers all the time, leaving the brick-and-mortars in the dust. But there is another side to this -- the Kindle Fire was the hottest holiday gift in Q4 2011, racking up tons of sales for not only Amazon, but the physical stores like Wal-Mart too. With the Kindle Fire HD line launching either September 14 or November 20, Wal-Mart could lose out on
the huge sales
that these tablets could potentially draw.
Target stopped selling the Amazon Kindle line this past Spring as well.
This article is over a month old, voting and posting comments is disabled
9/21/2012 12:33:32 AM
It's understandable.... I'm sure Walmart and others would be glad to carry the kindle at the reduced price if it was their shopping portal that was advertised on it so aggressively. If its digging into the sale of competing tablets with higher profit margines and not returning that revenue in other forms such as online shopping as it is doing for amazon it quickly becomes obvious why they wouldn't want to carry such a product which is then only good to bring in foot traffic.
Though I hate ads, Amazon should actually consider tayloring the advertising and product suggestions to also mirror each of the big retailers selling them like Walmart, target, maybe even Costco. Since they aren't trying to make their money on the sale of the kindle hardware it would stand to reason they would have no interest in that type of a setup especially since it would be aiding their etailor rivals. In the end amazon will probably be content with selling its kindles solely through their online portal if it came to that.
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