Borders to take on Amazon, Amazon is unimpressed.

4 comments

Borders announced last week that it will be cease using Amazon.com to sell its books and start its own competing site in early 2008. Borders accounted for 80 to 160 million dollars of Amazons revenue last year. Amazons total revenue was over 10 billion though so the impact of its loss doesn't seem to be that great. I think there's more to this story than meets the eye though..

Most of the news seems to focus on them competing with books online but margins are razor thin in that arena and Borders has to pay taxes. I think we are going to see an expansion of their product types when they finally get on line.

My spidey sense is tingling that this is going to be very important and earth shaking. They are going to have to be aggressive if they don't want to be #3 or #4 behind Walmart and Borders.

They have a lot of money and I can't help but wondering, how its going to be spent on advertising next year ?
How we can take advantage of it?

Comments

They're going to have to

They're going to have to come up with something unique - very unique - on the web side in order to compete.

This Bloomberg article talks about Borders introducing some changes in its brick and mortar business:

Borders will form partnerships with other companies and introduce computer and kiosks within stores that will offer discounts and coupons, Jones said. For example, travel or cooking departments may have special offers

Now, that doesn't sound very imaginative to me, and doesn't sound like they'll be able to come up with a unique proposition for the web shop. And it's going to be very expensive for them to convince folks to switch over from either Amazon or B&N.

Unless WPs spidey sense is ultra sensitive I give 'em 3 years from the day they open shop.

Thats exactly why I am so

Thats exactly why I am so keyed up on this.. I just can't imagine them just being content as an "also ran" online business. They are going to have to do some heavy spending and do something unique. Those two things should make some good oppurtunities for marketers and publishers to make money when they act.

maybe I am too optimistic

The only unique thing I can

The only unique thing I can come up with for books is same day delivery in major markets, similar to what B&N offers in Manhattan. But that's very expensive. The only reason B&N can offer it is that they bought a major distributor with a warehouse close by in New Jersey. Oh, and Manhattan also had a glut of messenger delivery services at the time that were starved for work.

If Borders can do something about that last mile that would be unique. But so many folks have tried and so far failed.

If it's taken 2008 until

If it's taken 2008 until before Borders will even sell their books online, it doesn't suggest much future hope for the company.

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