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Is Waterstones Getting Ready to Walk Away From Amazon?

Kindle_Paperwhite_35438287_35437744_35438313_35438312_02_620x433[1]Everyone was shocked when Waterstones partnered with Amazon in 2012 to sell the Kindle, but I don’t think we should be surprised if that relationship ends.

The Telegraph published an article yesterday which cites Waterstones director James Daunt as saying Kindle sales had disappeared. While that article is meaningless in and of itself, as I sit here reading it this morning I wonder if there’s a subtext to the quote.


Waterstones has admitted that sales of Amazon’s Kindle e-book reader had "disappeared" after seeing higher demand for physical books.

The UK’s largest book retailing chain, which teamed up with Amazon in 2012 to sell the Kindle in its stores, saw sales of physical books rise 5pc in December, at the expense of the popular e-reader.

Kindle sales had “disappeared to all intents and purposes”, Waterstones said.

James Daunt, chief executive, told the Financial Times that the resurgence in popularity of hardback and paperback books was due to Waterstones refurbishing some of its 290 shops.

Given that people give books as gifts, and that people  give gifts in December, it’s not a surprise that book sales were up 5%. But to suggest that the increase in sales of books caused the decline in in sales of the Kindle is simply ridiculous.

One could just as sensibly claim that an increase in sales of cereal caused a decline in sales of milk, or that an increase in sales of gasoline caused a decrease in the sales of electric vehicles. To put it simply, the products are not competitors in the same market.


One has to wonder why The Telegraph tried to make the connection, but more importantly we need to ask why Daunt gave the quote in the first place.

To be completely fair, he might not have intended to imply a connection. In fact, he may have innocently answered two unrelated questions, only to see his words twisted into making a claim he did not intend. (Honestly, I think this is the most likely possibility.)

But if he was cited accurately then we need to ask why.  His motive could be as simple as getting press attention for Waterstones with a juicy story, but he might also be creating a context for Waterstones to end its partnership with Amazon.

Waterstones announced its partnership with Amazon in May 2012, and if they have a three year contract then it could be coming up for renewal some time this summer.

The quote in yesterday’s article could have been intended to offer a context for Waterstones ending the relationship with Amazon.  After all, if Kindle sales have "disappeared" then why would Waterstones continue to carry them?

They wouldn’t.

I know what you’re thinking; yes, I could be reading too much into this article, but that doesn’t mean my speculation is over the top. I’m not sure I’m right, but if I turn out to be correct then I won’t be terribly surprised.

Should Waterstones break ties with Amazon, it will likely continue to sell Epub ebooks from its own bookstore (which is supported by OverDrive). The retailer might also sign with the Tolino consortium and sell Epub ebooks as well as the Tolino Shine ereader (also, tablets). Depending on the finances, that last option could be a sensible move.

It was a widely known secret in 2012 that Waterstones was going to sign with B&N to sell the Nook. That never happened (possibly because Amazon offered Waterstones a better deal), but if Waterstones wanted to make a deal in 2015 similar to the one hinted at in 2012 then I believe they would likely sign with Tolino.

What do you think?

image by HHA124L

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fjtorres January 7, 2015 um 8:45 am

No. You’re not alone in thinking this is spin.
Waterstones might easily be looking to dump Amazon…
…or they might be expecting to *be dumped* by Amazon.

Amazon going into Waterstones was a counter to Sony and Kobo.
Sony is gone, Kobo hasn’t made much of a dent and if Kindle sales are really low…

My question is more like: were they *ever* high?

Nate Hoffelder January 7, 2015 um 9:07 am

I hadn’t considered the possibility that Waterstones could be dumped, but you’re right. That is a possibility, too.

Paul January 7, 2015 um 9:36 am

Never underestimate the desperation UK newspapers have for news too. If this was in the Financial Times or the Guardian, I’d give it some credit, but I don’t recall the Telegraph breaking a decent business story in years. I think it was page filler.

Nate Hoffelder January 7, 2015 um 9:38 am

It was sourced from The Financial Times. The tone of the source article was pretty much identical.

Paul January 7, 2015 um 9:46 am

Reading the FT article you get more of an impression that its a continuation of their hyperlocal strategy.

Ben January 7, 2015 um 3:28 pm

As far as I could glean from people working there, the 2012 deal enabled Waterstones to sell Kindle books on, into the Kindle DRM ecosystem. And take a decent cut on each one. I think that would have been really successful for Waterstones. I could see many Brits preferring to discover books on instead of Amazon and its "Check out our range of dried noodles!" chic. And once they got traction, they could launch their own reader app and slowly divert people to that instead.

Sadly, I don’t think they ever came close to getting their IT together to make it happen.

carmen webster buxton January 7, 2015 um 5:20 pm

Well, since it sounds like they might break up, I think we should come up with a celebrity couple name, maybe Waterzon? Or Amastones? 🙂

Nate Hoffelder October 6, 2015 um 7:02 am

Amastones sounds best, I think.

Ebook Bargains UK January 8, 2015 um 2:43 am

Pretty clear Amazon stepped in with a deal to pre-empt B&N getting into Waterstone’s, and safe to assume that contract is near the end of its life.

Anyone who goes into Waterstone’s stores regularly will know you could walk past the Kindle plinth without even noticing it was there. Invariably there is a single Kindle table tucked away in some badly lit area with almost nothing to attract interest.

Whatever Daunt got from the deal (presumably a sign-up fee, a percentage of sales and perhaps most importantly compensation for the print-book space the Kindle display was occupying) was obviously more than B&N were offering, and a good move at the time, even if It meant removing the various e-readers Waterstone’s had been selling – Sony and iRiver mainly.

But it’s significant that they were sold in a well-lit fancy display that everyone had to pass by, and the staff were knowledgeable and helpful. Not least because Sony and iRiver devices were compatible with the ebooks in the Waterstone’s store.

You’d be hard-pressed to find any member of staff enthusiastic about selling a Kindle device. Assisted suicide, anybody?

Assuming the contract is coming to an end, we look forward to Daunt revamping the Waterstone’s ebook store and giving that some forward momentum.

Very few indies are in the Waterstone’s ebook store (mainly because very few indies are in the OverDrive retail catalogue, which was not part of the Smashwords deal with OverDrive) but those that are report brisk sales and the benefit of being a big fish in a small pond.

Nate, the Tolino partnership is one we would love to see happen, but not sure how viable that is. Tolino have great supply arrangements in Europe for local-language titles, but English-language ebooks are very much a secondary supply (and again almost indie-free).

More likely Waterstone’s will stick with OverDrive, who are doing a great job, will sell a handful of retailer-neutral devices, and try build the Waterstone’s ebook store as a viable supplement to the bookstore, rather than competing with itself as happened with B&N-Nook.

One last point – the 5% increase in sales at Waterstone’s was presumably a year-on-year increase. Clearly if the store only saw a 5% jump in the key Christmas season compared to the previous month they are dead in the water.

Andrew Girdwood January 9, 2015 um 1:41 pm

There’s a difference between ebook sales and Kindle sales. Who’s not got a Kindle who might want one?

I think it’s worth noting that if the Waterstones-Amazon deal is similar to the general bookshop deal Amazon published then Waterstones will get revenue on all ebooks bought by the Kindles they’ve sold. Even if they don’t sell a single Kindle in 2015 they’ll make money on ebook purchases. That might be harder to walk from.

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