mazon.com, the internet bookstore giant, has been expanding its inventory to include a wide variety of products over the last few years, especially in electronics. In the past, Amazon have sold products made by other manufacturers, but they have recently launched their own branded products, which consist primarily of blank CD/DVD media and accessory cables for electronic goods.
One of their most recent additions to the marketplace, though, is a gadget called the Amazon Kindle, an e-book reader that can download e-books, newspapers, magazines and blogs from Amazon’s library of over 350,000 titles (G3DU25X). This is Amazon’s first foray into manufacturing and so far it has been a success, sales-wise. The introduction of the Kindle 2 saw sales grow exponentially. The latest version, the Kindle DX, was released in June 2009.
A Surprising Move?
Amazon’s move into this marketplace was surprising because traditionally they have been a retail outlet rather than a manufacturer, and their infrastructure would have had to be modified to a great degree in order to facilitate this change.
Amazon’s largest strength as it begins to adopt this additional focus is its brand name recognition and brand trust. Everyone has heard of Amazon.com, and most people are familiar with the user-friendly and innovative ways they present themselves online. This can only mean good things for prospective sales.
So What are the Implications for You?
The implications for small and medium-sized retail businesses attempting to replicate such success are a little bleak.
The Kindle is currently exclusively manufactured and sold by Amazon, meaning more competitive pricing due to a smaller accumulation of mark-ups.
If this trend continues as Amazon broadens it’s product base, they will attract more and more customers away from other, smaller retailers who cannot match Amazon’s prices or supporting infrastructure.