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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.

Source: Reuters



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RE: Duh
By Old_Fogie_Late_Bloomer on 9/21/2012 12:42:45 PM , Rating: 3
The amount Walmart makes selling the Kindle is far less than the amount they'll lose when people start using those Kindles to buy things they used to get from Walmart.

They're not cutting off their nose to spite their face, they're going "$#!+$#!+$#!+! What were we thinking!?"


RE: Duh
By Motoman on 9/21/2012 12:59:58 PM , Rating: 1
As others have pointed out, ALL devices that facilitate connection to the internet do the same thing.

What good does a Dell laptop do Walmart after the sale? The user users it to go and order stuff from Amazon.

What good does any other Android tablet do Walmart after the sale? The user goes and buys stuff from various Android markets...maybe Amazon's.

What good does an iPad sale do Walmart after the sale? That dipsh1t just goes off and blows their yearly income at iTunes.

...and the flipside is what's stopping any of the above from buying a Kindle/laptop/phone/whatever and using it to go to Walmart.com and buy stuff there?

Nothing.

All of you people making claims like the moron I've just replied to are utterly bereft of any higher reasoning skills.


RE: Duh
By Old_Fogie_Late_Bloomer on 9/21/2012 1:55:51 PM , Rating: 2
quote:
All of you people making claims like the moron I've just replied to are utterly bereft of any higher reasoning skills.

Wow, somebody's having a bad day. :-(

When your Dell laptop hits the Windows desktop, there's no big button in the middle of the screen that loads right into Amazon's store, is there? You have to open a browser, do a Google search or type in a URL, and you have to choose which store you actually go to. Maybe you go to Amazon, maybe Newegg, maybe Walmart.

When you start up an Android tablet, sure, there's a link right there for Google Play. Likewise the iPad gives you access to iTunes. And Walmart doesn't care about Google Play or iTunes, because you're not buying diapers from Google. You buy music, movies, e-books, and apps. These things aren't threatening Walmart's core business.

When you fire up a Kindle, there's Amazon's store, right there. And it does sell diapers. It sells a lot of things that Walmart sells. And it's easier than going to Walmart. You can have a card saved, you can hit the one-click pay option or whatever, and your stuff is on your doorstep in a few days. That threatens Walmart's core business in a way that is fundamentally different from a laptop, iPad, or other Android tablet.

But hey, I know it can be hard to think straight when you're having a bad day, so I don't blame you for having trouble understanding the distinction.

Walmart understands it, though, which is why they're no longer selling devices that actively funnel their customers to their competitors.


RE: Duh
By TakinYourPoints on 9/21/2012 3:34:16 PM , Rating: 1
quote:
Wow, somebody's having a bad day. :-(


Standard motoman, angry and stupid. Don't mind him.

Your post has some good points. Another thing to note is that the Kindle by default has ads on the lock screen. A big reason Amazon is selling Kindles either at cost or at a loss is because the device is basically a portable billboard for the Amazon and all the goods it sells.

There is a big difference between a laptop or standard tablet, and something like the Fire that basically says "BUY THESE THINGS" when you look at the lock or home screen.


RE: Duh
By Kenenniah on 9/21/2012 3:43:13 PM , Rating: 3
People do understand the distinction. The problem is you don't see the other side of the coin. It could go either way. Anyone that wants a Kindle will buy one regardless of whether Walmart sells them, and will consume content through the device exactly the same no matter which store they buy it from. In this case the loss to Walmart's sales caused by consumption through the device is the same except they gain nothing from the sale of the device itself.

The flip side is the consumers that would not have bought a Kindle if they didn't happen by it at Walmart. In those cases Walmarts decision not to sell the Kindle helps them. Whether this happens enough to truly affect the overall sales of Kindles is anyone's guess at this point. The bottom line is this decision could either help or hurt Walmart, and both opinions have a shot at being correct


RE: Duh
By Old_Fogie_Late_Bloomer on 9/21/2012 4:48:48 PM , Rating: 2
quote:
People do understand the distinction.

I understand the distinction, you apparently understand the distinction; the guy I was replying to clearly did not understand the distinction.
quote:
The problem is you don't see the other side of the coin. It could go either way.

I do see the other side of the coin; I just think it's much more likely that Walmart will be better off not selling the Kindle. In fact, I'm sure they hope everyone will follow suit, and the Kindle won't be widely available in B&M stores.
quote:
Anyone that wants a Kindle will buy one regardless of whether Walmart sells them, and will consume content through the device exactly the same no matter which store they buy it from...The flip side is the consumers that would not have bought a Kindle if they didn't happen by it at Walmart.

I imagine there's a large segment of the population that didn't/wouldn't have any awareness of the Kindle Fire if it wasn't in B&M stores for them to see and interact with. There aren't any Amazon.com stores like there are Barnes & Noble stores and Apple stores. That's why they were being sold at WalMart.

If you shop at Amazon.com, you know about the Kindle Fire; if you have a Kindle Fire, you're probably going to shop at Amazon.com. If you don't have the former or do the latter, how does Amazon reach you? It's the classic Catch-22.

And if someone doesn't know enough about the Kindle Fire to go to Amazon.com, but they've sort of heard about it, and they go to Walmart looking for it, I'm sure an employee will be happy to redirect them to an iPad.

Believe me, I'm not sympathetic to Walmart. I go there for headlights, motor oil, and antacids. But I'm certain they did their math before making this decision. They didn't get to be the cancerous growth on the face of American retail that they are today by making unconsidered, impulsive, petulant decisions.


RE: Duh
By Motoman on 9/21/2012 5:39:14 PM , Rating: 3
quote:
When your Dell laptop hits the Windows desktop, there's no big button in the middle of the screen that loads right into Amazon's store, is there?


As a matter of fact, there just might be. The last few off-the-shelf PCs I've seen have had Amazon shortcuts right on the desktop.

But that's beside the point. Someone who wants to buy from Amazon isn't going to be dissuaded because there's not a giant Amazon button in the middle of their screen. Your assertion that somehow that person won't be able to figure out how to get to Amazon is laughable.

Also...are you sure that movies and music aren't part of Walmart's core business? Pretty sure they dedicate quite a bit of space to movies and music in their stores. And in their online store.

Speaking of their online store, you can access that from any device...like a Kindle. If you want to buy something from Walmart.com, not having a giant Walmart button in the middle of your screen isn't going to dissuade you from doing so.

Your "argument" is pathetic.


RE: Duh
By Old_Fogie_Late_Bloomer on 9/21/2012 8:09:22 PM , Rating: 2
quote:
As a matter of fact, there just might be. The last few off-the-shelf PCs I've seen have had Amazon shortcuts right on the desktop.

Screenshots or it didn't happen.
quote:
But that's beside the point. Someone who wants to buy from Amazon isn't going to be dissuaded because there's not a giant Amazon button in the middle of their screen. Your assertion that somehow that person won't be able to figure out how to get to Amazon is laughable.

Someone who isn't aware of Amazon isn't going to go to Amazon to buy things. Someone who hasn't historically made purchases online who gets slipped in by the back door 'cause now they're like, "Well, I want this e-book" are more likely to make more purchases after they make the first one.
quote:
Also...are you sure that movies and music aren't part of Walmart's core business? Pretty sure they dedicate quite a bit of space to movies and music in their stores. And in their online store.

They do not take up a significant portion of the floor space in the Walmarts in my area, but I can't speak for the whole of the US.
quote:
Speaking of their online store, you can access that from any device...like a Kindle. If you want to buy something from Walmart.com, not having a giant Walmart button in the middle of your screen isn't going to dissuade you from doing so.

I just figured out where the disconnect is. You're thinking like someone who is at least a little computer-savvy. Computer-savvy people already shop at Amazon. The whole point of selling tablets at Walmart isn't to reach you, or me. It's to reach your mom, or your grandmother, people who don't habitually make online purchases.
quote:
Your "argument" is pathetic.

The fact that you have to continue to resort to slinging personal insults really emphasizes how weak your position is.


RE: Duh
By TakinYourPoints on 9/22/2012 12:13:41 AM , Rating: 2
And now you've been introduced to two of the village retards, reclaimer and motoman. Cheesew1z would have made for the trifecta, but oh well.

Enjoy your stay!


RE: Duh
By Reclaimer77 on 9/21/2012 8:08:12 PM , Rating: 2
????

That argument actually makes sense to you?

That's like saying Best Buy is losing money by selling the iPad. Because the iPad is a "gateway" device into locking people into Apple's iTunes service and NOT buying Best Buy's CD's and Blu Rays.

Seriously what the fuc$?

If Wal-Mart is going to be a serious retailer of electronics, it cannot view potential commerce those devices might generate AFTER the sale as "lost profits" if it doesn't go their way. That's frankly insanity.

You realize people buy cell phones from Wal-Mart, then turn around and buy things from Amazon and other online vendors via those phones too. I guess Wal-Mart will make MORE money if they choose to stop selling those phones? Wrong.

Basically you're weighing the guaranteed profit of a sale, against theoretical potential profits after the sale that may or may not be lost/earned. Potential profits that may or may not even exist! Do you realize how crazy your position is?


RE: Duh
By Old_Fogie_Late_Bloomer on 9/21/2012 8:15:23 PM , Rating: 2
quote:
Do you realize how crazy your position is?

Yes. It sounds completely rational...but I'm done arguing with people who think personal insults are a substitute for logic.


RE: Duh
By Motoman on 9/22/2012 10:10:38 AM , Rating: 2
Nice cop-out. Your "argument" has been proven to be utterly ridiculous, so you just go away and declare victory.

As far as "personal insults" - your argument is pathetic. That's not an insult...it's a statement of fact. If you want to take that personally, you probably have more insight into that matter than I do.


RE: Duh
By EricMartello on 9/22/2012 3:35:09 AM , Rating: 2
The problem is not that Walmart considers "back end" amazon sales via the kindle a "loss", rather that what is sold via the kindle is one less thing that the person may be inclined to purchase at walmart - in other words they believe they are giving up market share to Amazon (who directly competes with Walmart across many of the same retail product categories) with each kindle sale.

It's not viable for walmart to release yet another tablet to compete with the kindle so the best play, as they see it, is to not help the proliferation of the kindle by removing it from their store shelves.

It's not a crazy position and it's not entirely unreasonable...although if I were Walmart I'd want to sell a product like that where I would also benefit on the back end sales. They may be doing this as part of a negotiation strategy with amazon in order to work out just such a deal.


RE: Duh
By Reclaimer77 on 9/22/2012 1:21:11 PM , Rating: 2
Wal-Mart is a brick n mortar retailer with nearly no online presence outside of a website which directs sales to their own stores. Since when is "back end" sales some big consideration here?

This whole thing is silly. People are going to shop at Amazon whether or not they sell Kindles there. All they're doing is losing sales revenue here.

I don't mind that Wal-Mart is deciding not to sell a product. I guess what I take issue with is how asinine the reasoning behind it is.


RE: Duh
By EricMartello on 9/22/2012 9:36:33 PM , Rating: 2
quote:
Wal-Mart is a brick n mortar retailer with nearly no online presence outside of a website which directs sales to their own stores. Since when is "back end" sales some big consideration here?

This whole thing is silly. People are going to shop at Amazon whether or not they sell Kindles there. All they're doing is losing sales revenue here.


It's not about Walmart's website vs Amazon - it's the fact that kindles do generate high profits for Amazon, who is a direct competitor of Walmart in many of the same retail categories as I said before.

Even if walmart doesn't sell ebooks and the majority of purchases made with the kindle are likely to be ebooks - that still translates to more profits for one of walmart's major competitors - Amazon.

If you compare this to walmart selling ipads it's not the same thing, because Apple does not compete with Walmart directly for retail sales including basic stuff like groceries...so it's no skin off of Walmart's nose if the ipad drives more back end sales for Apple via itunes.

quote:
I guess what I take issue with is how asinine the reasoning behind it is.


Walmart didn't get to where they are today by making bad business decisions. If you were running a store and your major competitor asked you to sell a product of theirs on your shelves, would you take the one-time profits from each sale of said product knowing that for every one you sell, you are adding a potential high profit revenue stream to your competitor?

Keep in mind that the profits Amazon generates from the sales of digital goods like ebooks have virtually zero costs attached to them (nearly 100% profit), so the profits they make can be used to undercut Walmart on popular items as well as offset shipping costs making it more difficult for Walmart to compete.


"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller














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