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Walmart to Stop Carrying the Kindle, Kindle Fire

September 20th, 2012 by · 8 Comments · Amazon, hardware news

What do you have when the largest US retailer, a company is willing to sell almost anything, decides to not carry a product anymore? I don’t know, but I think Amazon is about to find out.

Reuters is reporting today that Walmart has circulated an internal memo which mentions plan to discontinue stocking Amazon’s ereaders and Android tablets. No specific reason is given, but that’s a far less important detail than the fact it happened at all.

“We have recently made the business decision to not carry Amazon tablets and eReaders beyond our existing inventory and purchase commitments,” Wal-Mart said in a memo sent to store managers dated Wednesday. “This includes all Amazon Kindle models current and recently announced.”

A Walmart rep has confirmed this story, and said that the decision was consistent with its overall business strategy but did not provide any more details as to why. But the spokesman did remind us that Walmart carries an extensive selection of ereaders and tablets on their website, which is true. Walmart’s website has a selection that is second only to Amazon, and may even surpass it. But none of those ereaders and tablets are carried in store due to limited display space.

Walmart is in fact the second major US retailer to stop carrying Amazon’s hardware. Target made a similar decision to drop the Kindle back in May of this year, and Target also stopped carrying the Kobo Touch a couple months later (in July).

Neither chain has explained their motivations but in the case of Target their later decisions to carry ebook and magazine gift cards provided some context. And even without an explanation, it is easy to guess their motivation.

Walmart, Target, and all of Amazon’s brick-and-mortar partners are allowed to sell the Kindle in store but not on their websites. They are in effect giving a major competitor free advertising space on their store shelves. It may have taken a while but eventually they did realize that this was counter-productive.

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8 Comments so far ↓

  • Chad

    “They are in effect giving a major competitor free advertising space on their store shelves. It may have taken a while but eventually they did realize that this was counter-productive.”

    I would include the fact that not only are they giving some exposure to a competitor, they are doing it at what is likely a razor thin profit margin in a way that doesn’t justify the margin.

    From a retailer’s perspective, it’s not necessarily a deal killer to stock a product that has low profit margins because that can often lead to sales of other product, either related or unrelated. But in the case of the Kindle, not only do you have a low margin, you are also selling a product where the follow-up purchase is going to occur somewhere other than your store and you will not receive a benefit. You also risk that followup purchases of unrelated items may be at that competitor rather than your store. So your only real benefit in stocking the product is that single time it brings the customer in the store.

    • Nate Hoffelder

      That does add insult to injury, doesn’t it?

      • fjtorres

        Worse; the Kindle Fire is a link to Amazon videos (which competes with WalMart’s Vudu and DVD sales, ebooks and mp3s which compete against WalMart’s books and CDs) and are hardwired to Amazon’s general storefront which competes with everything else WalMart does.
        It’s not shocking that WalMart is dropping Kindles–what is shocking is that they ever did carry them.

  • Tom Semple

    I bought the Kindle Touch 3G I’m currently using at WalMart (I rarely shop there, but we were on vacation, it was right next to the hotel and we needed a few things…). They were selling it for $109, a $40 markdown, and it was too good a deal to pass up even though I had a perfectly good KT wifi. As it happens, this purchase DID bring me back to WalMart, a couple of times: when I attempted to register it, I was informed that it had been ‘reported lost or stolen’ (it was factory sealed: mystery and intrigue persist about this). Kindle CS could say and do nothing but suggest I return it for exchange or refund. By then we were hundreds of miles from the WalMart in question, so we started with the one closest. They didn’t have any in stock, but called around to other stores and found one that did. After waiting in a couple of lines the exchange was finally complete and I had a device that would register. In the end, given angst and hassle, probably not worth the $40 savings, which after all was not the price WalMart normally would charge. I’ll be buying direct in the future…

    But I understand some people still have time to visit stores and enjoy being able to see what they are buying (my mom got a KT3G at Best Buy after learning of my bargain, for the same $109 price, since BB ‘will meet any price’). I just think bricks and mortar shopping is in irreversible decline. Increasingly, our society cannot exist without the convenience and efficiency of ‘one click shopping’ and the time it claws back into our lives.

    I would imagine WalMart is getting nervous about Amazon moving apace on free next day (or in some cases, same day) shipping, now that they’re opening warehouses in CA and other states, following sales tax settlements. They are battening down the hatches. As well they should. In the above scenario, I would not have had to chase around for hours to exchange a broken Kindle; a 2 minute phone call (on Amazon’s dime) would have sufficed.

    • fjtorres

      You know, Walmart was a prime mover in the “make Amazon collect sales tax” astro-turf campaign. If it now turns around and bites them in the rear it would only be their just deserts…

  • Syn

    Walmart will always be my one stop shop for toilet paper.

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