Tuesday, December 6, 2011

Would Nordstrom's sell the Macys catalog?

Can you imagine walking into Nordstrom's department store and find they sell a Macys catalog?  Wouldn't you be shocked to find a display featuring the benefits of Ford cars, in a Chevy dealer?

Yet, go into a Best Buy or Walmart and that is what you'll find--them actually selling a competitors catalog.

Both these companies are actively selling the Amazon Fire tablet this Christmas.  Haven't they used a Fire themselves?

The Fire is basically an Amazon catalog with tablet capability.  Amazon is selling it near cost; they are likely losing money on it.  The tablet is designed to show you products from Amazon, both electronic goods like streaming and downloadable music, movies, tv shows, and books, and real goods, that ship to you for free via 2 day Fedex the first month.  That is because the Fire comes with a month free of Amazon Prime.  Normally $79 a year, Prime gives you a year of 2 day shipping with no more cost on tens of thousands of the products Amazon sells.  

Search for an item in the Amazon app, on not only the Fire, but also on your Android or IOS device, and you can choose to see only Prime eligible products.

So, get in a car and rive to a store, or just pick up your Fire that Best Buy and Walmart so helpfully sold you and buy a product, probably for equal or even lesser amount then from the brick and mortar stores.

The Fire is not going to put Best Buy or Walmart out of business by itself, but as Amazon hopes the Fire has a razor blades approach of making money for them going forward, Best Buy and Walmart and any other store selling the Fire will make money now, and have the Fire take small amounts away from them forever after.

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