The program builds on the tech Amazon developed for their partnership with the UK bookseller Waterstones. That deal was announced in May of 2012, and effectively made Waterstones a sales agent for Amazon. The new program will do the same for indie booksellers.
Booksellers will be able to sell Kindles, Kindle Fires, and accessories in store (at a 6% to 35% markdown). They'll also earn a 10% commission on the ebooks purchased via the Kindles they sell (for up to 2 years). The retailers can also buy the hardware at a deeper discount (9%) but they'll have to forgo the 10% commission.
Curiously enough there's no mention of whether the booksellers will earn a commission on other digital content: apps, music, video. Update: And that is because this program doesn't include a commission on anything other than ebooks.
Kobo announced similar deals in 2012 with the ABA, the UK Bookseller Association, and others. Under Kobo's program booksellers earn a 5% commission on hardware and around 5% to 12% on content. Reports on the success of the program are mixed, with news surfacing recently that Kobo has yet to get the bugs out of their program. As Douglas Cootey pointed out a few weeks ago:
One day when I was supposed to be pumping out freelance assignments and doing the laundry, on a whim I called Kobo when I couldn’t link my Kobo Mini to my local bookstore. I was having trouble following the directions my local bookstore had given me. I had been told that I could go onto the Kobo website and manually link my Kobo Mini, but there was no link to do that. I also wondered if my Kobo Mini was automatically linked up already. The Kobo customer service agent told me that there was only one guaranteed way to link the Kobo ereader with the affiliate: Create a new Kobo account from the affiliate’s website by clicking on the official link.
I'm not too worried about Amazon making a similar mistake; their tech usually works better.
Amazon already has a couple bookstores signed up, including a college bookstore and an indie bookseller (both in the Seattle area). These 2 bookstores are the only ones mentioned in the press release and on the Amazon website, so I would bet Amazon doesn't have any other booksellers signed up just yet.
And I don't expect very many to sign up. I'm expecting most booksellers to have a reaction similar to that of the proprietor of Skylight Books, who was approached in June:
so i got a phone call today from a representative of Amazon! apparently, he was given the task of reaching out to independent bookstores in order to ‘build’ a ‘relationship’ with the indies in order to ‘partner’ with us in a program to sell Kindles in our store…yea, really. so, in my most incredulous voice i asked him if he was serious and stated flatly that we wouldn’t be interested.
he said he understood and that he knew Amazon was facing a number of ‘hurdles’ they would need to cross in order to implement this program. that being the case, would i be willing to clarify any specific problems that i might foresee as being a dealbreaker. i repeated his request back to him partly out of disbelief and partly to give him a chance to back out of the way of this oncoming rhetorical trainwreck, but he insisted he wanted to hear my concerns. so i said ok and let him have it:-the Kindle has to be open source.-Amazon has to stop its predatory business practices such as undercutting the prices of an entire market of products (books) that they themselves do not depend on for revenue and/or creating sleazy apps that encourage people to buy from Amazon while they’re actually standing in a bookstore.
-and three, Amazon needs to start paying sales tax in all 50 states of the union and stop sucking all the money out of every community they infiltrate.
I don't see that happening, do you?