http://www.thepassivevoice.com/05/20...e-chicken-run/
PG does not know any details of the Waterstones deal with Amazon, but here’s something he would have advised, had Waterstones asked for his help.
In addition to the discount from Amazon’s list price for Kindles that PG assumes any retailer would receive, PG would ask for a percentage of the sales price of ebooks sold through each Kindle account Waterstones originates.
Through its Amazon Associates program, Amazon is already willing to do this for any product it sells , paying between 4% and 8.5% of the sales price for items sold via Associates links (here’s more information). PG would just say, “Give Waterstones the same advertising fee you would give anyone else on sales Waterstones originates when it sells one of your Kindles.”
That way, whenever a Waterstones customer buys an ebook, Waterstones makes money. Instead of a lost sale, it’s new income.
Perhaps this has already been done.
The underlying strategy is to quit spending psychic energy and executive time trying to stop the Amazon tide and begin to figure out how to make money from Amazon.
Smart strategy actually.
The more Kindle Waterstones sell, the more $$$ Waterstones will get
1) from the Kindle device itself (profit margin)
2) a % of each ebook bought from the Kindle device that was sold at Waterstones
Waterstones has 4 choices
1) build its own ereader (this will cost hundreds of millions of USD, see Nook R&D expense for example. In addition, Waterstones will be competing against the Kindle in selling ebooks, which mean razor thin margin under wholesale It would makes sense under "no price competition" agency model with the guaranteed 30% cut but how long will agency last?)
2) partner with Nook
3) partner with Kindle
4) partner with KOBO
If it rules out #1, then which of the 3 partners will earn Waterstones the most $$$$? Look like, Amazon made the best sales pitch and won.
It is not in Waterstones interest to partner with Nook when Nook offer a worst deal.