Amazon Views Its Competitors as a New Distribution Channel

Distribution of Tablet ComputersHere is a story that may seem to be a bit of a head scratcher.  Amazon has determined, that for its Kindle digital products, a worthwhile market to pursue in order to expand distribution of these products are brick-and-mortar bookstores.  That’s right.  Amazon is targeting its distribution to the same people who view the company as the 800 pound gorilla of bookselling.

On the surface, this certainly seems strange.  Yet upon closer inspection this plan offers potential value for both sides.  For Amazon, this move could lead to sales of their digital devices increasing for a couple of reasons.  First, more customers become aware that Amazon sells different types of digital products.  Many may know that Amazon sells an e-reader but may not be aware of its tablet products.  Second, those who see the products have an opportunity to physically experience these before making a purchase.  Obviously, that is something that cannot be effectively done if the products only are sold online.

For bookstores, one advantage is that customers who purchase an Amazon digital device may also purchase other products at the store, such books and magazines.  Also, a customer who buys the Amazon product may actually enjoy the atmosphere of the bookstore and may return to socialize.  Thus, the bookstore may benefit from their return by selling non-reading products, such as coffee and music.  Additionally, a sale of Amazon devices also helps the bookstore build a mailing list of customers.  Finally, and most obvious, the bookstore makes some money from the markup of the devices.

So while Amazon’s distribution targeting strategy may seem strange, there could be benefits for both the seller and the retailers.

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