Amazon is Making Its Bookstores a Priority, and is Now the Fifth Largest Bookstore Chain in the US

The pandemic has many questioning whether brick-and-mortar retail will ever return to normal. Some might wait for an answer before investing in new physical retail locations, but not Amazon. The retailer continues to launch new Amazon Books locations at, compared to its competitors, a breakneck speed.

Amazon opened its first bookstore in November 2015 in Seattle, and since then they have announced, launched, or started developing 24 additional locations, including launching a store in Phoenix, AZ just over 2 weeks after the first Amazon Books location’s 4th anniversary, and filing for permits for a store in Kansas City, MO, in May 2020 (in the middle of a raging pandemic, yes). The stores carry a selection of several thousand books as well as toys, games, electronics, and Amazon hardware such as the Kindle ereader and the Echo smart speaker.

For a while there it looked like Amazon was cooling to the idea of physical bookstores; in 2018 they canceled two bookstores and converted a third location into a 4-Star store. That period of uncertainty lasted only a few months, however, with Amazon opening  its next bookstore in Denver in March 2019.

Amazon has continued to open bookstores since then, and they have also started renovating older stores. In late 2019 Amazon temporarily shut down the Georgetown, Bethesda, and three other Amazon Books locations so they could refit the stores with electronic shelf labels, shift the books so they were shelved spine out, and reorganize the store layouts.

In spite of Amazon’s continued expansion, the retailer has faced less and less criticism as time passed. For the first year or so the announcement of each new Amazon Books location drew complaints from local booksellers, and after the first location opened in Seattle, the ABA started muttering about violations of antitrust law, although this ultimately proved unfounded.

Very little has been written about Amazon’s bookstores in the past few years, and yet at the same time Amazon has managed to become the fifth largest bookstore chain in the US after B&N, BAM!, Half-Price Books, and Deseret Books. (This list does not include Hudson News, which operates airport bookstores, or Follett or B&N Edu, which operate college bookstores.)

To be honest, this achievement isn’t as impressive as it would have been three or four years ago. A number of chains have failed in the past few years, including Lifeway, Book World, Hastings, and Family Christian Stores. Each of these chains had more stores than Amazon Books, but they did not have the sales to keep the stores open.

Amazon does, or so we assume. The retailer has not revealed revenue figures for their stores, leaving us no option other than to speculate.

At the very least we can conclude that Amazon is getting something of value out of their bookstore chain. Is it sales data? Tax write offs?

Your guess is as good as mine.

image by Rob Young via Flickr

 

Nate Hoffelder

View posts by Nate Hoffelder
Nate Hoffelder is the founder and editor of The Digital Reader. He has been blogging about indie authors since 2010 while learning new tech skills weekly. He fixes author sites, and shares what he learns on The Digital Reader's blog. In his spare time, he fosters dogs for A Forever Home, a local rescue group.

13 Comments

  1. Disgusting Dude25 June, 2020

    They’re probably expanding the chain in the expectation that the lockdows will kill hundreds of independent stores and quite possibly B&N. They’ll be expanding into a vacuum.

    Plus, their stores are the only B&M outlets that will stock APub books so even if the store profit margin is low they also make money via the publishing arm. Probably more. So as long as the stores run in the black they make sense.

    Reply
  2. Steve H.26 June, 2020

    While I sort of like their stores, it is hard for me to imagine they move enough books at discounted prices to surpass overhead.

    Reply
    1. Nate Hoffelder26 June, 2020

      me, too

      Reply
    2. DaveMich26 June, 2020

      I think it’s a branding thing. There are Apple stores. They sell Apple stuff. There are Microsoft stores. They sell Microsoft stuff. AND…. there are Amazon stores. And they sell Amazon stuff, and since it’s sort of difficult to stock the shelves with AWS instances, they have kindles and echos and books, to round it out. They get their name on the outside of a store, and I think that’s worth something to them.

      Reply
      1. Disgusting Dude26 June, 2020

        Microsoft is closing their stores, ostensibly because of the pandemic.
        The branding value wasn’t enough for them.
        Amazon, however, knows how to live off low single digit margins. And, as I said above, they earn both retailer and publisher profit on tbe APub books which are by default Amazon exclusive.

        So even if the stores run in the red, technically, Amazon as a whole can be comfortably in the black as long as the bulk of their sales are APub books and Amazon gadgets. They already have more than enough stores to show the flag, including several cities with more than one store, so if they’re still expanding it is because there is money in it.

        Reply
  3. tired26 June, 2020

    It sounds like the 9th largest chain and there are only a couple dozen locations. Talk about a Goodereader level deception. Poor reporting.

    Reply
    1. Nate Hoffelder26 June, 2020

      If you are going to heckle, you need to work on your math.

      Reply
    2. Disgusting Dude26 June, 2020

      A couple dozen makes them the fourth largest *general purpose* bookstore chain.

      Education and religious, like Deseret, aren’t, and neither is Hudson, which is a chain of newstands limited to a couple dozen new releases at a time in airports only. If you count those you have to count art supply stores, pharmacies, Costco, Sam’s, Target, Walmart, and every random store with a rack of paperbacks.

      That is the world the big box bookstores and volume discounting policies created over their two decades of domination. And now by time the lockdown has had its say, they might dasily be the last chain standing.

      Reply
      1. Nate Hoffelder26 June, 2020

        One reason that Deseret is on my list is that past lists included competitors such as Lifeway and Family Christian.

        Reply
        1. Disgusting Dude27 June, 2020

          Simple test: are you likely to find the Harry Potter books?

          Reply
          1. Nate Hoffelder27 June, 2020

            hehehehe

            Reply
  4. davemich28 June, 2020
    Reply
    1. Nate Hoffelder28 June, 2020

      I think that’s worth a revisit, don’t you?

      it’s a shame the nearest one is so far away.

      Reply

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