Tuesday, February 07, 2012

Amazon.com to open boutique-style brick-and-mortar 'test' store: source

One of Amazon.com's big advantages has been that the company doesn't collect sales tax in most states, because it has no physical presence in those states. Brick-and-mortar retailers have been crying foul over this for years. Be careful what you wish for, though: it's reported Amazon.com is about to open a brick-and-mortar store of its own.

The report says that sources have said that the huge Internet retailer is planning on opening a retail store in Seattle, Wa. within the next few months. The project is designed to see if Amazon.com could successfully --- profitably --- open a chain of such stores.

The company is not planning a store that encompasses everything it has to offer. Instead, the sources said, the store will be more along the lines of a boutique, with the emphasis on Kindles, Kindle Fires, and books from the company's growing line of Amazon Exclusives.

Amazon.com's recently launched publishing division has prompted rivals such as Barnes and Noble and Books-A-Million to publicly state that they won't be offering any of Amazon.com's books in their locations. Retail location's would enable Amazon.com customers a way to physically touch, browse, and buy books and also sample ebooks via the (it has to be there) free in-store wi-fi.

It will also be interesting to see --- if this proves to be a success --- if Amazon.com chooses to offer in-store service of their Kindle devices. Barnes and Noble has made no bones about the fact that with their Nook devices, you can simply drop into a store to get them fixed. That's not possible, obviously, with a Web-only retailer.

Such in-store repair or exchange could diminish B&N's advantage in that area.

As far as Amazon.com's tax advantage goes, that will disappear if they open a store in a state. However, as seen by the tactics that many states are using, classifying Amazon Affiliates that advertise on their sites as a physical presence, it's clear that eventually that sales tax "holiday" is going to disappear.

Thus, the launch of retail stores --- esp. in Washington state, where the company already has a "physical presence," would seem to be a natural response to what will be an eventual loss of its sales tax advantage, anyway. The report says the store will launch before the end of 2012.

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