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Print 43 comment(s) - last by bah12.. on Sep 24 at 11:26 AM

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 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.


"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser














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