Waterstones to Sell Kindle, Kindle eBooks in the UK

The world woke up to a surprise bit of news this morning. Waterstones, the UK bookseller with nearly 300 stores, is now going to sell the Kindle. The partnership won't be final until this fall, but Waterstones has already put out a press release and posted the following video:

The story is rather simply. Waterstones will sell the Kindle and Kindle ebooks to customers both in store and on their website. And that's about all anyone knows about it until September.

In fact, given the long delay between today's announcement and September, I would bet that the deal is either still under negotiation or it was just finalized. At best, the ink is still drying.

On a side note, a few weeks back I wrote that the B&N-Waterstones deal was taking too long so it had likely fallen through. I wish I had taken myself more seriously, because it looks like that was right around the time that Watersones started seriously talking with Amazon.

According to James Daunt, the managing director for Waterstones, "We asked ourselves, 'what do our customers want?'; the answer was the Kindle. Once we'd done that this was self-evidently the best deal."While the B&N talks are rumored to have started back in November 2011, the negotiations with Amazon had started only "relatively recently".As he explains it, "Ultimately, when we thought about it, we had to give the customers what they wanted. And the best device on the market is the Kindle."

Daunt spoke to The Bookseller this morning, but he didn't offer any new details which weren't mentioned in the press release or video.

And yes, this does come as a shock. It was only days ago that Daunt described Amazon as "a ruthless money-making devil", and that's not something you expect to hear someone say about their future partner.  Not that I would call today's turnaround duplicitous; it would be more accurate to say that Waterstones decided that if you can't beat'em, join'em.

The shock also comes from the faact that everyone assumed that a partnership with B&N was a done deal Waterstones would sell the Nook and their own ebooks. That deal would have made sense – as a US only retailer B&N was no threat to Waterstones’ retail business. Amazon is a dire threat.

While I can see why Waterstones signed their name in blood, what's in it for Amazon is less obvious. They already have a dominant position in the UK ebook market and they're doing a brisk trade in Kindles.

While this deal will increase their sales, I think the real reason Amazon inked this deal was more to keep competitors out of Waterstones. The increase in ebook sales from customers buying in Waterstones bookshops was likely just icing on the cake.

A bookstore with a knowledgeable staff would have been a boost for any of the majors or even the minor ebook retailers, so denying that boost to competition might be a good idea.

Speaking of which, B&N wasn't Waterstones' first failed deal. Rumor has it that at one point Waterstones wanted to go it alone. They almost signed a deal with txtr to build their ebookstore on txtr's platform. Any ereader attached to it would have carried the Waterstones brand but they likely would have been developed by a third party.

It's probably a good thing that the txtr deal fell through; I'm not sure Waterstones would have the same success on their own as they are now going to have with Amazon.

About Nate Hoffelder (11582 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

13 Comments on Waterstones to Sell Kindle, Kindle eBooks in the UK

  1. Tim Waterstone must be spinning in his bed. 😀

  2. Great deal for Amazon, they don’t really need Waterstones but are showing their competitors that they will not leave them even an inch.

    As for Waterstones, take your pick – it’s giving away the store, straightforward surrender, unilateral disarmament, harakiri etc. Like other B&M retailers they’ve once before been burned by teeming up with Amazon, so I guess this is the triumph of hope over experience.

    It will also be very unpopular at store level, the picture of sullen booksellers morosely ‘handselling’ Kindles is not a pretty one.

    Here is some of the twitter comments I’ve seen so far:

    *scratches head* James Daunt: ‘Amazon are a ruthless, money-making devil, the consumer’s enemy’

    Waterstones: We are excited to partner with the fire that is engulfing our home and look forward to benefiting from the warmth it provides.

    Handing your future to a company that thinks you shouldn’t exist is a very risky move. Presuming it IS your future.

    Once upon a time a consumer wandered into Waterstones, browsed the books, checked Amazon price on in-store Wifi, bought eBook. The end.

    TOMORROW: Sainsbury’s announce they’ve invited Tesco to set up stores within their branches inc web terminals linked to Teco.com

    Colleague just compared Waterstones teaming up with Amazon as being like the RAF leasing the V2 rocket….

    Waterstones news gives new meaning to the phrase “no-brainer”.

    Shop doors will be bolted to prevent customers escaping. kindlestones gets a cut of sales made on Kindle within store.

    I dunno, think James Daunt’s body language tells an entirely different story from the words coming out of his mouth.

    • The deal kicks in by Sept. Might be B&N couldn’t get going in time.
      Could be Daunt hates Microsoft more than Amazon.
      Could be Daunt was swayed by all the exclusives.
      Most likely it was the money and his golden parachute.

      • What would I do? I’d shut Waterstones down and give the money back to the shareholders.

        • Obviously you’re not a corporate CEO.
          The way a CEO works is he checks his contract, sees when it ends, makes sure his exit bonus is nice and fat, and then he racks up as much short term revenue as possible regardless of how badly it leaves the company for his successor.
          A great CEO leaves behind a dozen time bombs for his successor so they’ll never forget him. As long as they all explode *after* he takes his incentive bonuses he’s cool.
          Shareholder value?
          Not on this planet.

      • The sudden timing of the switch does make this look like it was somehow precipitated by Microsoft.

        Perhaps they wanted Waterstone’s to pay them patent royalties as well?

  3. Didn’t everyone learn from Borders that giving Amazon control of the growing share of your B&M business is a really really bad idea?

  4. All joking and sarcasm aside, the deal–like all business deals–is about money.
    Unlike Borders outsourceing online sales to Amazon from day one, Waterstones has been selling ADEPT epub ebooks on their own for a while. Which means they know what it costs to run an ebook storefront, what it costs in Adobe taxes, and how many books they are selling. Or not-selling.
    More than a deal of ignorance or ideology, it looks like a deal of “real-politick”, giving up on a lost cause in return for something tangible.
    The way these deals run, they are guaranteed a certain minimum revenue from the commision they get for the use of their name. Which is presumably more than what they have been making selling ebooks on their own.
    If, like Indigo, Waterstones is going to increasingly rely on their general retail capabilities and diversify beyond books then that guaranteed revenue becomes pure profit.
    In other words, Waterstones wasn’t making much ebook money on their own so they chose to cash in their brand and customer base and focus on other businesses.
    Sounds like they are not going to bet the company on the future of books, either e- or p-. They’ll sell them as long as they can make a profit and when they can’t, they’ll move on.
    Not unheard of: IBM started out as a punch card vendor, became an office equipment supplier, evolved into a computer company, and is now well on its way to become an IT services company.
    That is the Borders lesson they are taking: don’t go down with a fading product line.

  5. All joking and sarcasm aside, the deal–like all business deals–is about money.
    Unlike Borders outsourceing online sales to Amazon from day one, Waterstones has been selling ADEPT epub ebooks on their own for a while. Which means they know what it costs to run an ebook storefront, what it costs in Adobe taxes, and how many books they are selling. Or not-selling.
    More than a deal of ignorance or ideology, it looks like a deal of “real-politick”, giving up on a lost cause in return for something tangible.
    The way these deals run, they are guaranteed a certain minimum revenue from the commision they get for the use of their name. Which is presumably more than what they have been making selling ebooks on their own.
    If, like Indigo, Waterstones is going to increasingly rely on their general retail capabilities and diversify beyond books then that guaranteed revenue becomes pure profit.
    In other words, Waterstones wasn’t making much ebook money on their own so they chose to cash in their brand and customer base and focus on other businesses.
    Sounds like they are not going to bet the company on the future of books, either e- or p-. They’ll sell them as long as they can make a profit and when they can’t, they’ll move on.
    Not unheard of: IBM started out as a punch card vendor, became an office equipment supplier, evolved into a computer company, and is now well on its way to become an IT services company.
    That is the Borders lesson they are taking: don’t go down with a fading product line.

  6. FJ-

    You have the right idea, diversifying out of books and into non-book products is the correct strategy for any bookstore right now. It’s also exactly what Borders tried and failed to do.

    The keys to successful transitioning products and servies is retaining your existing customers and retraining your employees. Outsourcing to Amazon is counter-productive on both fronts.

    Amazon – more than anything else- is targeting your customers. Any new category you wish to move into, Amazon is already there. Only now, they can directly market to your most loyal customers.

    Good luck.

6 Trackbacks & Pingbacks

  1. Easons to Launch eReader This Year - The Digital Reader
  2. eBook Community Anobii Sold for £1 - The Digital Reader
  3. Amazon Now Recruiting Indie Bookstores to Sell Kindle, Tells Them About the Awesome Cookies - The Digital Reader
  4. Business Insider: "Amazon Has A Plan To Get Indie Bookstores To Kill Themselves " - The Digital Reader
  5. Amazon Launches New Affiliate Deal with Italian Bookseller Giunti al Punto - The Digital Reader
  6. Waterstones CEO Says Deal to Sell Kindles Avoids ‘Bear Traps’ | The Digital Reader

Leave a comment

Your email address will not be published.


*