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Target Abandoning Amazon's Kindle Line Over a 'Conflict'

By - Source: Bloomberg | B 17 comments

Target will no longer carry Amazon's Kindle devices starting this month reportedly due to a "conflict of interest."

To some degree, supporting Amazon by selling Kindle devices in retail stores is insane. Why? Because Amazon is an internet monster out to fatten itself by gobbling up everyone's business. Many times it's cheaper to subscribe to Amazon Prime, purchase a ton of items like soap and toilet paper at a discount, and have it all shipped 2nd-Day for free. Where does that leave Mom and Pop not to mention Target and Walmart? Sweeping the empty isles.

Perhaps Target has finally caught on to the fact that it's feeding the enemy. The company has reportedly made a statement saying that it's phasing out the Kindle line after a two-year run because... you guessed it: a conflict of interest. Even more, the second largest U.S. discount chain will continue to offer similar products from Apple (iPad, iPod Touch) and Barnes & Noble (Nook).

"Target continually evaluates its product assortment to deliver the best quality and prices for our guests. Target is phasing out Kindles and Amazon- and Kindle- branded products in the spring of 2012," Molly Snyder, a Target spokeswoman, told Bloomberg in an e-mail. "We will continue to offer our guests a full assortment of e-readers and supporting accessories, including the Nook."

As Bloomberg points out, back in December Amazon ran a promotion which offered discounts to shoppers who scanned in products with their smartphones at retail stores and compared prices on Amazon. With stunts like that, the online retail giant is seemingly becoming everyone's enemy as of late including Google, Apple, and even book publishers given that its main business is aggressive pricing and low margins to undercut retailers.

That said, it wouldn't be surprising if additional retail chains decided to give the Kindle line a boot out the front door, even Walmart. Local Target stores will likely carry the eReaders until stocks are depleted. But Amazon's Kindle line has already been removed from Target's website -- even its Kindle-branded "mini-store" comes up vacant.

News of Target's Kindle abandonment surfaced on Tuesday after an internal memo emerged, revealing the Kindle's fate. According to the memo, Target will remove Amazon hardware from its locations starting in May. Certain accessories will still remain in stock, but shipments of the Kindle hardware units themselves -- ranging from the original to the Kindle Fire -- will cease as of May 13th.

There's speculation that the move to remove Kindle may have something to do with the rivalry between Apple and Amazon. It's possible that Amazon withdrew all Kindles because Target kept increasing the shelf space for Apple's iOS products. That seems a little silly given that Amazon wants its tablets on every physical store shelf. What's likely is that Target is fed up with Amazon's undercutting ways and will rely on Apple and Barnes & Noble to produce eReader revenue.

Currently Amazon has not released an official statement regarding Target's move.

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  • 8 Hide
    welshmousepk , May 3, 2012 12:26 AM
    I find it hilarious that people don't expect this. If you are being undercut by a competitor, you need to find as way to become more competitive. having a hissy fit and refusing to sell their stock won't help.
    global commerce is a tough business, and if you can't keep up, you're doomed.
  • -4 Hide
    Middleman , May 3, 2012 12:40 AM
    BS. This whole thing has Apple strong-arm written all over it.
  • 7 Hide
    ta152h , May 3, 2012 12:43 AM
    welshmousepkI find it hilarious that people don't expect this. If you are being undercut by a competitor, you need to find as way to become more competitive. having a hissy fit and refusing to sell their stock won't help.global commerce is a tough business, and if you can't keep up, you're doomed.


    Well, it might be that so few were selling due to Amazon under pricing them, it was not economical to keep selling them. Amazon may have been using Target as a showroom, and getting more online purchases that way. Because it sells for only $200, there's no margin on the device, so I can't imagine Amazon would be letting Target have it inexpensively.

    The writing of the article is sensationalist and poor, but there is some truth in it. When a manufacturer is also a competitor, its very important to have a cooperative relationship with them. Amazon enticing customers to look somewhere else, and then buy at Amazon is not effectively balancing that sensitive role.

    They'll have to figure it out. They normally sell stuff other people make, and having others sell stuff they make is pretty new to them. They're going to learn the hard way, it would seem, by suffering reactions like this from retailers. But they will learn, or simple be unsuccessful. Arrogant companies that make one-sided deals learn that they aren't quite as important, and their position not quite as unassailable, as they thought. It happens all the time.
  • Display all 17 comments.
  • -3 Hide
    illfindu , May 3, 2012 1:01 AM
    Regardless of weather Apple has any thing to do with this i doubt amazon is to broken hearted there the number one selling android tablet , the amazon market makes more money then google play if any thing this could be worth more as bad press that people will assume its apple * I'am not commenting on Apples connection to this eathier way*
  • -1 Hide
    xerroz , May 3, 2012 1:41 AM
    MiddlemanBS. This whole thing has Apple strong-arm written all over it.

    Makes sense this is what's actually happening since Apple has said they'd open mini-Apple stores inside Targets
  • 3 Hide
    Anonymous , May 3, 2012 2:15 AM
    Where is this statistic that the Amazon app market makes more money than Google Play coming from? Did you just make that up or do you have a real source?
  • 1 Hide
    acadia11 , May 3, 2012 2:55 AM
    I just bought my kindle online, it was cheaper than at target ...
  • 1 Hide
    Darkk , May 3, 2012 4:25 AM
    acadia11I just bought my kindle online, it was cheaper than at target ...


    This is exactly what Target is whining about. Amazon controls the kindle in terms of manufacturing and selling it at whatever price they want. Target made a bad deal with Amazon (devil) and now they are just throwing in the towel.

    I wonder if Target is going to have a "fire" sale to clear out all the kindles in stock?

  • 1 Hide
    alphaalphaalpha , May 3, 2012 6:20 AM
    Amazon doesn't seem to play well with other retailers, but they do seem to try to play well with their customers very much. If Amazon wanted Target to sell Amazon's products, then Target needed to get a cut of the profits or else Target would need to raise the prices of the products from Amazon that Target sells in order to get a profit, thus making them more expensive that buying directly from Amazon.

    However, Amazon does seem to be one of the best companies for consumers. They have good prices (if you buy their stuff directly from them) and in my experience with them, top-notch customer service. Their products are also generally good too, especially for their price, even if they aren't the absolute best. Those are fairly respectable things to consider, at least in my opinion.
  • 0 Hide
    sailfish , May 3, 2012 6:32 AM
    One would have to see the reseller arrangement between Target and Amazon to determine if this was over a pricing issue. Generally speaking, most of those types of arrangements give the reseller a significant discount over the manufacturer's list price, thus, allowing them to offer it at a lower price or add value (e.g., in-store support?).
  • -2 Hide
    neiroatopelcc , May 3, 2012 7:38 AM
    A discount chain selling rotten apples to iSheep ? Quite different from european discount chains
  • 2 Hide
    Anonymous , May 3, 2012 11:19 AM
    what i find hilarious is how people refer to amazon as a devil....yet retail chains like target, walmart, etcetera arent. just a few years ago such chains were considered pure evil due to the dramatic effect on small business. my oh my how people change their tune.

    agreed... resellers (retail chains) typically get a better deal than what we pay (msrp). epect at least 5-15% less than the lowest amazon.com sale (unless of course amazon is taking a profit loss on sales). if there is a profit loss involved on sales (such as was the case with ps3 units) then there isnt much a retailer can do to combat it. however giving the end customer is NOT looking out for the customer no matter how management tries to make it seem. if retail stores dont learn to adapt to e-business soon they will be in trouble.
  • 0 Hide
    hoofhearted , May 3, 2012 1:23 PM
    Wow, what does this day to me? Time to start pricing and shopping the other things (soap and toilet paper) at Google and Amazon rather than Target.
  • 0 Hide
    cknobman , May 3, 2012 1:36 PM
    This is not going to do anything but more harm to Target. Sure they may have been selling Kindles with little to no margin and sure it may have also deterred customers from buying physical movies and books.

    BUT

    At least they had the opportunity to sell "attachments" and "accessories".

    NOW

    Customers wont buy squat from Target and just go straight to Amazon for everything.

    I mean what does Target think is gonna happen? Customer goes to Target "Oh you dont sell the kindle anymore??? Guess I will just buy a ton of other crap from you then." LOL I dont think so.
  • 1 Hide
    blazorthon , May 3, 2012 5:04 PM
    cknobmanThis is not going to do anything but more harm to Target. Sure they may have been selling Kindles with little to no margin and sure it may have also deterred customers from buying physical movies and books.BUTAt least they had the opportunity to sell "attachments" and "accessories".NOWCustomers wont buy squat from Target and just go straight to Amazon for everything.I mean what does Target think is gonna happen? Customer goes to Target "Oh you dont sell the kindle anymore??? Guess I will just buy a ton of other crap from you then." LOL I dont think so.


    You're assuming that people actually went to stores like Target just because of Amazon products. I highly doubt that this happens much at all. Target probably won't suffer much at all form this unless Amazon takes action, which is unlikely.
  • 1 Hide
    f-14 , May 3, 2012 6:56 PM
    Quote:
    What's likely is that Target is fed up with Amazon's undercutting ways and will rely on Apple and Barnes & Noble to produce eReader revenue.

    unofficial word from high up the chain is that the conflict of interest is the bypass way of the non compete agreement target wanted amazon to sign that basically said they would not sell for lower than targets prices which target and apple have an agreement on a fixed higher price.
  • 1 Hide
    beardguy , May 3, 2012 8:24 PM
    cknobmanThis is not going to do anything but more harm to Target. Sure they may have been selling Kindles with little to no margin and sure it may have also deterred customers from buying physical movies and books.BUTAt least they had the opportunity to sell "attachments" and "accessories".NOWCustomers wont buy squat from Target and just go straight to Amazon for everything.I mean what does Target think is gonna happen? Customer goes to Target "Oh you dont sell the kindle anymore??? Guess I will just buy a ton of other crap from you then." LOL I dont think so.


    Your logic makes no sense ... you think that because Target stopped selling Kindles, that everyone is just going to buy everything from Amazon?

    I shop at Target regularly and this is going to have no effect on me whatsoever. I'll keep shopping at Target just as much as I used to. Why would you think them not selling Kindles would really matter to most people?

    I don't blame Target, after all, why would you continue to support a fierce competitor?
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