Amazon in the Process of Launching a Retail Store
Feb
04

Amazon in the Process of Launching a Retail Store

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Amazon sources close to the situation have told us that the company is planning on rolling out a retail store in Seattle within the next few months. This project is a test to gauge the market and see if a chain of stores would be profitable. They intend on going with the small boutique route with the main emphasis on books from their growing line of Amazon Exclusives and selling their e-readers and tablets.

Seattle is where Amazon’s main headquarters is based and is known as a fairly tech savvy market. It is a perfect launch location to get some hands on experience in the retail sphere. A source has told us that they are not looking to launch a huge store with thousands of square feet. Instead they are going the boutique route and stocking the shelves with only high margin and high-end items. Their intention is to mainly hustle their entire line of Kindle e-Readers and the Kindle Fire. They also will be stocking a ton of accessories such as cases, screen protectors, and USB adapters.

The company has already contracted the design layout of the retail location through a shell company, which is not unusual for Amazon. When Amazon releases new products to the FCC it is always done through anonymous proxy companies to avoid disclosure to their competition on what they are working on. While we don’t know the actual name of the firm they are working with we have heard rumors that they are based in Germany.

The store itself is not just selling tangible items like e-readers and tablets, but also their books. Amazon recently started their own publishing division and has locked up many indie and prominent figures to write exclusively for the company. This has prompted their rivals such as Barnes and Noble, Indigo and Books-A-Million to publicly proclaim they won’t touch Amazon’s physical books with a ten-foot pole. Amazon launching their own store will give customers a way to physically buy books and also sample ebooks via WIFI when they are in a physical location.

This is exciting news and Amazon in a great position to make a strong go out of their retail endeavors. They are starting out local and small mainly to test the waters with the new store, but also to figure out how they’re going to avoid paying massive taxes. In the last few years, there has been a huge tax debate because Amazon sells things online and only pays State taxes if they have a distribution center within a particular location. Having a physical store means the company will have to start paying more taxes and they are currently working out the logistics and tax loopholes before they launch.

We have heard that the time-frame of their first location starting up will be before the end of the year to capitalize on the lucrative holiday season. The store may also roll out towards the Fall when their own publishing imprint will officially launch and the first few books will be released. I expect it to launch soon after the Kindle Fire 2 is announced to maximize the exposure they are going to get.

Michael Kozlowski (4527 Posts)

Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about electronic readers and technology for the last four years. His articles have been picked up by major and local news sources and websites such as the Huffington Post, CNET and more. Michael frequently travels to international events such as IFA, Computex, CES, Book Expo and a myriad of others. If you have any questions about any of his articles, please send an email to michael@goodereader.com


  • Tessa

    Cool. Amazon does a lot of interesting stuff in the Seattle area, like their grocery delivery service. It will also be interesting to see if they use their store as an extension of their pilot with 7-11 to deliver Amazon orders to lockers in store locations so you don’t have to deal with home package delivery.

    Who knows, maybe it’ll be common to swing by the Amazon store to pick up our orders rather than get them at home.

  • http://www.techremind.com/ TechRemind

    Good move…

  • http://mccgsam.blogspot.com/ Sam H

    While I’m not surprised they are going to make sure they can implement the best tax avoidance strategies before going into the realm of retail, I would think that Amazon has plenty of ordinary business expenses that they can use to deduct their taxable income. From what I heard, their profit margins are exactly spectacular despite their high sales revenue.

  • Shanghai Dan

    In the State of WA, you pay business taxes regardless of retail storefront or not.  Sales tax for WA residents must be collected and B&O taxes are paid.  So there aren’t any new taxes being borne when rolling out a retail store in Seattle.

  • John W Baxter

    Amazon already collects and remits sales tax on purchases for Washington state residents (it’s sort of hard to hide a headquarters which has suddenly taken all or most of the space is several newly-built large buildings). There are a few other states which have Amazon physical facilities and thus have Amazon collecting sales tax.

    It will be interesting to see where the store is placed (it could be in ground floor retail space in one of the headquarters buildings mentioned above, but there are plenty of locations that would be happy to lease to Amazon).

    [I tend to buy from Amazon *because* it collects sales tax on my purchases. That saves me from recording the non-taxed transactions from other sellers and filling out state forms to cover the tax, which is owed. (It’s owed in most states were they don’t collect–welcome tax evaders.)]

    [There are some pretty nice open-to-the-public restaurants in the new Amazon campus. Someday when my wallet is thicker…]

      –John

  • http://twitter.com/seriouslyepic Beau Romero

    They should of got that Apple guy that went redo JCP to launch them… would have been epic. I love Amazon.

  • http://twitter.com/elizabethbarone Liz

    I’m already trying to figure out how I, an independent author, can take advantage of this if their pilot store does well. Any ideas?

  • http://disqus.com/samirsshah समीर शाह

    Looks good. Make Kindle Fire 2 Open Market for apps. (again a bitter truth, remember thinking like a chess grandmaster).

  • http://profiles.google.com/rodhowarth257 Rod Howarth

    I made this suggestion on my blog last year: 
    http://cejest.com/2011/11/22/amazon-should-open-physical-stores/ 

  • Mikesellon

    Excuse my proventialism, but I couldn’t care less if Amazon opens a retail store in Seattle.  I don’t even care if they open stores in every major market around the country.  I don’t live there (in a major market).  I live in a small city, and until they open one here, it’s of absolutely no interest to me.

  • http://www.henrybaum.com/ Henry

    Of course! The most important thing is how this affects you personally.

  • http://twitter.com/mike_goefft Mike Goefft

    Here u go Amazon lovers.

  • Stu F.

    They can probably avoid the State sales tax trap by creating the store as a separate corp  the Amazon name and brick/mortar distribution rights to the separate business.

    I think that Amazon might do better opening stores in airports and heavy traffic points aimed at showing (rather than selling) many of their wares.  Have a small inventory targeting impulse purchases, but have this as a place to try out Amazon’s newest products. 

  • Sang Han

    I hope they open one inside Bellevue square and allow receiving of returned products purchased on line.  I’m not really into Kindle products right now.

  • Anonymous

    Why are you reading and commenting on this story if it’s of no interest to you? 

  • BeeDub

     Your comment is as useful as people who feel the need to reply “I don’t know” to questions on posting boards.

  • Anonymous

    Wow, so Amazon drives all of the brick-and-mortar bookstore chains out of business, in part by taking advantage of its special sales tax status, and as soon as the last competitor gives up the ghost, starts planning to move into their shoes?  I have been a very happy and frequent customer of Amazon, even a Prime member, but this move smells far too much of what should be illegal anti-competitive behavior.

  • http://twitter.com/elizabethbarone Liz

    For years everyone has been saying print is dead, and Amazon was one of the big players in bringing ebooks into the spotlight. Yet now they are moving into the very business they “killed.” (Print books are still about 70-80% of the industry; ebooks make up very little total sales.) I see this as a move that says print is not dead, especially when a company that big decides to open up a store that will primarily carry hot titles from their indie authors. I don’t really see it as a dirty move, but more of a “we’d better become part of that 80%” kind of move to keep their own business thriving.

    Which “last competitor” are you referring to? Barnes and Noble is still a prominent brick-and-mortar book store, and they have a hot ebook trade.

  • Eli_ruby

    Tax Loop Holes I don’t think so. Occupy Wall Street should camp out in front of all Amazon distribution centers and corporate offices.

  • stinker

     Yes, I have one.  Get a job there.

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