The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
Amazon will provide inventory, fulfillment, site content and customer service. The site will continue to provide Borders’ store location and in-store event information.
The struggling web site of bookstore chain Borders is throwing in the towel. Borders and Amazon.com announced today that Amazon will operate the Borders web site Borders.com. The site will become a co-branded Borders/Amazon site in August. The Borders site will offer the same inventory as Amazon. Amazon will provide inventory, fulfillment, site content and customer service. The site will continue to provide Borders’ store location and in-store event information.
The Borders site will offer Amazon’s editorial reviews, personalization features, product recommendations and 1-Click ordering.
Borders has long struggled as the number three bookselling web site, after Amazon and Barnes & Noble. The company announced earlier this year that it will no longer be investing in its web operation.
While some analysts believe that there’s little value in buying the customer lists or operations of faltering dot-com retailers, arguing that the customers will flow naturally to the remaining sellers, this arrangement makes sense because Barnes & Noble’s site could benefit as easily as could Amazon from a Borders’ demise. “This is a calculated gamble that they can capture a greater share of the lost customers by acquiring the operation rather than letting it go under,” says James Okamura, senior partner with retail consultants J.C. Williams Group. In fact, Okamura says the Borders deal could be a good move in Amazon’s quest for profitability. “Amazon is at a critical mass point as they approach profitability. Tipping the scales slightly can make a big difference. When you’re putting on a brave front, you do what you can to tip the scales.”
Amazon is in a similar arrangement with Toys R Us, which decided last year it was unable to compete with the online toy retailers and so outsourced fulfillment and operations to Amazon.