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I'm very curious what Amazon is trying to do here. Can the business plan pencil out by selling enough additional goods to pay the store's operating expenses? Is

I'm very curious what Amazon is trying to do here. Can the business plan pencil out by selling enough additional goods to pay the store's operating expenses? Is the real goal to expose more people to the Kindle who wouldn't otherwise see one, i.e. it's a Trojan?

test001only 11y ago
This might be more a customer acquisition strategy rather than trying to run the store profitably. As another comment pointed out, Amazon must have data regarding literary interests of people around every geographic location. This can be put to use here.
- ljk 11y ago
  Also the location is right next to the University of Washington, maybe that's also a factor
JacobJans 11y ago
I don't see any reason not to take what they say at face value: > “Our goal is to do a great job selling lots of books,” Cast said. > “We’re completely focused on this bookstore,” Cast said. “We hope this is not our only one. But we’ll see." They could end up operating a very profitable chain of bookstores, and they have quite a few competitive advantages that might let them do just that.
7952 11y ago
Where I live book shops have tended to become more like gift shops. They sell something that is an expensive luxury that you buy because it is a nice thing. Amazon have a huge advantage in this by giving the buyer an assurance that the present will be well received. You can buy a book for a 5 year old relative without knowing what a typical 5 year old actually likes. This could easily extend to none-book purchases (probably the end goal). There are lots of products that are a little obscure that you don't find in physical shop but have high ratings.
- dragonwriter 11y ago
  > Amazon have a huge advantage in this by giving the buyer an assurance that the present will be well received. You can buy a book for a 5 year old relative without knowing what a typical 5 year old actually likes. Individual variation is significant enough that I don't think that Amazon's data-based understanding of (say) typical 5-year-olds does much to provide assurance that a gift is right for a particular 5-year-old. If the particular recipient actually is an active Amazon purchaser -- especially with a strong rating history -- you might get some assurance, but that's a different thing (and more applicable to online than in-store sales, probably, anyway.)
OrwellianChild 11y ago
Their use of floor space to show all the books cover-facing-out seems to suggest that they're looking to move dead-tree books too... Barnes & Noble definitely became a showroom for the Nook, but it was also selling books. This might imply that Amazon is re-deploying the same strategy but without the dead-weight of under-performing brick-and-mortar stores. (i.e. Amazon gets to use it's data to only put stores in places where it knows traffic, volume, and customer profiles will perform well.) I expect Barnes & Noble knew much less about its customers when it set up its network of stores...
- mgkimsal 11y ago
  > I expect Barnes & Noble knew much less about its customers when it set up its network of stores... There may have been less available data altogether, but what data was available indicated people shopped in and near malls, hence a lot of B&N in malls. But with malls seemingly slipping away, B&N will have to relocate or adjust more radically.
atarian 11y ago
Amazon.com started off with books, but now they sell everything. I can only imagine what an innocent-looking bookstore from Amazon will eventually become in a decade.
- alttab 11y ago
  Imagine, you roll up to the fulfillment center yourself. You laugh to yourself that its basically a Walmart.
devindotcom 11y ago
The tech is pretty central in the store, and there are lots of people talking about prime, showing off selection on TV, etc. Really it's actually fulfilling the duty of a book store in U Village though, the Barnes & Noble there died a few years back and it's a huuuge shopping center. I don't think Amazon is trying to make a lot of money off it, it's kind of a lark but if it floats, they can open a few more to have brand presence next to Apple and Microsoft.
vnorby 11y ago
In 2013, Amazon had 65% market share of online book sales [1]. It wouldn't surprise me if this was 20% higher now. When customers walk into a Barnes and Noble (or any bookstore) and browse books but don't buy (for example, because they found a cheaper price online), they are most likely to end up on Amazon to complete the purchase. B&N did the work but Amazon got the money. Amazon doesn't have that problem. They don't need to sell books in the store to "pay the store's operating expense" - they just need people to come in and browse. Currently, Amazon doesn't compete for a high percentage of books (50%) moved through physical stores [2]. They are in the enviable position of being able to create stores that don't leak sales to competitors. This is the final nail in B&N's coffin. [1] http://www.thewire.com/business/2014/05/amazon-has-basically-no-competition-among-online-booksellers/371917/ http://www.thewire.com/business/2014/05/amazon-has-basically... [2] http://www.dailydot.com/business/ebook-sales-2013-revenue/ http://www.dailydot.com/business/ebook-sales-2013-revenue/
- kenjackson 11y ago
  This is an interesting thesis... which is that brick and mortar can work if you also own the online alternative. I never bought books and B&N because I knew I could get the book cheaper at Amazon. The same with toys when I used to shop at ToysRUs. But those are both goods that I'd actually like to buy on the spot. If I know that the price in the store is the same as online, I'd probably do a lot of in store purchases. And since I'm a Prime customer, they save 2-day shipping cost to me (I'll continue to be a Prime customer).
  - teirce 11y ago
    I used to hold this viewpoint until I watched a video (I can't seem to find it now) that made a pretty good point. The point was something along the following: "I like book stores. I like going in and flipping through the books. Sure, I could buy the book on Amazon for $4 less, but if I keep doing that eventually book stores won't be around. And I like book stores." Ever since then, I usually try to buy the book in B&N or wherever, provided that's where I am at the time. (Something like a campus book store and textbooks, however, is an entirely different case...)
mentos 11y ago
The same way Amazon started by offering just books on its online store and then expanding, they are probably now doing the reverse with a physical book store..
deleted 11y ago
[deleted]
pmorici 11y ago
They could eventually use these as order pick-up points for customers or launching points for drone deliveries. The biggest pain when using Amazon is having to worry about the package getting stolen or going and tracing it down at the shipping office. I'd rather just drop by the Amazon store on my way home from work get the package and be on my way.
- rexerexer 11y ago
  I don't think you're the only to share sentiment. While it certainly conjures up negative associations for me - I would actually be in favor of a process with similarities to a drive-thru for pick up of online orders. It may be nice to go inside and browse, but the experience in entropy that is now making even a minor purchase at Apple stores has me in avoidance of them. Besides, Amazon is a logistics company.
  - vinceguidry 11y ago
    I'm sure they thought about it, then realized that shipping from the fulfillment center to the bookstore wouldn't be all that cheaper than just doing home delivery. They'd have to either use drones, or do constant runs from fulfillment centers to bookstores to make it significantly faster than the same-day / second-day delivery you already get with prime.
- thinkling 11y ago
  If they wanted to do this, they wouldn't start it in a location where parking is a pain (which it kinda is in UVillage) and where retail space is really expensive. Better to go somewhere with cheaper space and a more central location. So that's definitely not the plan. I'm not disagreeing that they need an alternative to delivery, and they know it. That's why they've been trying stuff like Amazon Lockers (in 7-11s and such) and why they're working on the drone delivery which could adapt to when you're home.
pcurve 11y ago
I think this is an attempt to offset their skyrocketing delivery costs. I don't think they're doing this because they have Apple retail store envy. They've done the math and figured out that additional cost would be more than paid off through this means.

test001only 11y ago

This might be more a customer acquisition strategy rather than trying to run the store profitably. As another comment pointed out, Amazon must have data regarding literary interests of people around every geographic location. This can be put to use here.

ljk 11y ago
Also the location is right next to the University of Washington, maybe that's also a factor

JacobJans 11y ago

I don't see any reason not to take what they say at face value: > “Our goal is to do a great job selling lots of books,” Cast said. > “We’re completely focused on this bookstore,” Cast said. “We hope this is not our only one. But we’ll see." They could end up operating a very profitable chain of bookstores, and they have quite a few competitive advantages that might let them do just that.

7952 11y ago

Where I live book shops have tended to become more like gift shops. They sell something that is an expensive luxury that you buy because it is a nice thing. Amazon have a huge advantage in this by giving the buyer an assurance that the present will be well received. You can buy a book for a 5 year old relative without knowing what a typical 5 year old actually likes. This could easily extend to none-book purchases (probably the end goal). There are lots of products that are a little obscure that you don't find in physical shop but have high ratings.

dragonwriter 11y ago
> Amazon have a huge advantage in this by giving the buyer an assurance that the present will be well received. You can buy a book for a 5 year old relative without knowing what a typical 5 year old actually likes. Individual variation is significant enough that I don't think that Amazon's data-based understanding of (say) typical 5-year-olds does much to provide assurance that a gift is right for a particular 5-year-old. If the particular recipient actually is an active Amazon purchaser -- especially with a strong rating history -- you might get some assurance, but that's a different thing (and more applicable to online than in-store sales, probably, anyway.)

OrwellianChild 11y ago

Their use of floor space to show all the books cover-facing-out seems to suggest that they're looking to move dead-tree books too... Barnes & Noble definitely became a showroom for the Nook, but it was also selling books. This might imply that Amazon is re-deploying the same strategy but without the dead-weight of under-performing brick-and-mortar stores. (i.e. Amazon gets to use it's data to only put stores in places where it knows traffic, volume, and customer profiles will perform well.) I expect Barnes & Noble knew much less about its customers when it set up its network of stores...

mgkimsal 11y ago
> I expect Barnes & Noble knew much less about its customers when it set up its network of stores... There may have been less available data altogether, but what data was available indicated people shopped in and near malls, hence a lot of B&N in malls. But with malls seemingly slipping away, B&N will have to relocate or adjust more radically.

atarian 11y ago

Amazon.com started off with books, but now they sell everything. I can only imagine what an innocent-looking bookstore from Amazon will eventually become in a decade.

alttab 11y ago
Imagine, you roll up to the fulfillment center yourself. You laugh to yourself that its basically a Walmart.

devindotcom 11y ago

The tech is pretty central in the store, and there are lots of people talking about prime, showing off selection on TV, etc. Really it's actually fulfilling the duty of a book store in U Village though, the Barnes & Noble there died a few years back and it's a huuuge shopping center. I don't think Amazon is trying to make a lot of money off it, it's kind of a lark but if it floats, they can open a few more to have brand presence next to Apple and Microsoft.

vnorby 11y ago

In 2013, Amazon had 65% market share of online book sales [1]. It wouldn't surprise me if this was 20% higher now. When customers walk into a Barnes and Noble (or any bookstore) and browse books but don't buy (for example, because they found a cheaper price online), they are most likely to end up on Amazon to complete the purchase. B&N did the work but Amazon got the money. Amazon doesn't have that problem. They don't need to sell books in the store to "pay the store's operating expense" - they just need people to come in and browse. Currently, Amazon doesn't compete for a high percentage of books (50%) moved through physical stores [2]. They are in the enviable position of being able to create stores that don't leak sales to competitors. This is the final nail in B&N's coffin. [1] http://www.thewire.com/business/2014/05/amazon-has-basically-no-competition-among-online-booksellers/371917/ http://www.thewire.com/business/2014/05/amazon-has-basically... [2] http://www.dailydot.com/business/ebook-sales-2013-revenue/ http://www.dailydot.com/business/ebook-sales-2013-revenue/

kenjackson 11y ago
This is an interesting thesis... which is that brick and mortar can work if you also own the online alternative. I never bought books and B&N because I knew I could get the book cheaper at Amazon. The same with toys when I used to shop at ToysRUs. But those are both goods that I'd actually like to buy on the spot. If I know that the price in the store is the same as online, I'd probably do a lot of in store purchases. And since I'm a Prime customer, they save 2-day shipping cost to me (I'll continue to be a Prime customer).
- teirce 11y ago
  I used to hold this viewpoint until I watched a video (I can't seem to find it now) that made a pretty good point. The point was something along the following: "I like book stores. I like going in and flipping through the books. Sure, I could buy the book on Amazon for $4 less, but if I keep doing that eventually book stores won't be around. And I like book stores." Ever since then, I usually try to buy the book in B&N or wherever, provided that's where I am at the time. (Something like a campus book store and textbooks, however, is an entirely different case...)

mentos 11y ago

The same way Amazon started by offering just books on its online store and then expanding, they are probably now doing the reverse with a physical book store..

deleted 11y ago

[deleted]

pmorici 11y ago

They could eventually use these as order pick-up points for customers or launching points for drone deliveries. The biggest pain when using Amazon is having to worry about the package getting stolen or going and tracing it down at the shipping office. I'd rather just drop by the Amazon store on my way home from work get the package and be on my way.

rexerexer 11y ago
I don't think you're the only to share sentiment. While it certainly conjures up negative associations for me - I would actually be in favor of a process with similarities to a drive-thru for pick up of online orders. It may be nice to go inside and browse, but the experience in entropy that is now making even a minor purchase at Apple stores has me in avoidance of them. Besides, Amazon is a logistics company.
- vinceguidry 11y ago
  I'm sure they thought about it, then realized that shipping from the fulfillment center to the bookstore wouldn't be all that cheaper than just doing home delivery. They'd have to either use drones, or do constant runs from fulfillment centers to bookstores to make it significantly faster than the same-day / second-day delivery you already get with prime.
thinkling 11y ago
If they wanted to do this, they wouldn't start it in a location where parking is a pain (which it kinda is in UVillage) and where retail space is really expensive. Better to go somewhere with cheaper space and a more central location. So that's definitely not the plan. I'm not disagreeing that they need an alternative to delivery, and they know it. That's why they've been trying stuff like Amazon Lockers (in 7-11s and such) and why they're working on the drone delivery which could adapt to when you're home.

pcurve 11y ago

I think this is an attempt to offset their skyrocketing delivery costs. I don't think they're doing this because they have Apple retail store envy. They've done the math and figured out that additional cost would be more than paid off through this means.