Are Amazon’s bookstores headed for the same future as struggling chains like Barnes & Noble? It’s possible, according to the company’s latest financials, which suggest the company’s physical bookstores aren’t doing so hot.
Amazon announced its third-quarter earnings on Thursday. For the first time, it also broke out performance for its physical stores, noting that these entities accounted for $1.276 billion during the quarter.
Physical stores — which Amazon helpfully describes as places where a customer “can physically select items in a store” — include both Amazon’s bookstores and its newly acquired Whole Foods grocery chain.
While $1.276 billion in sales is pretty impressive for a company just jumping into the physical retail world, Amazon notes that a majority of those sales are from Whole Foods.
In fact, the company estimates that net sales from Whole Foods — since it was acquired in August — totaled $1.3 billion, which likely includes online sales of the brand’s products.
Additionally, Amazon doesn’t note exactly how much the bookstores contributed in sales for the third quarter, which means the figure could be so minuscule it doesn’t make a dent in the $1.27 billion in sales. We’ve reached out to Amazon for more information.
So what’s that mean? Mainly, that Amazon physical bookstores don’t ring up much in the way of sales.
Business Insider surmises that there are a few reason for this: There are only 12 Amazon bookstores, and the locations often function as a benefit to Prime members, not everyday customers.
For instance, as we’ve previously reported, Amazon has been charging different prices for Prime and non-Prime customers visiting the store.
Under the company’s pricing structure, customers who pay $99/year (or $10.99/month) for Prime membership can buy books and other products at the store for the same price they are listed on Amazon.com.
Customers who aren’t Prime members will be charged the product’s “list price.” As a result, many non-Prime members are better off purchasing books online.
In the end, the stores often function as a place for customers to simply browse books and test out Amazon’s devices, like the Kindle or Echo speaker.
Still, the lack of sales doesn’t mean Amazon is ready to give up on its bookstore concept. In fact, the company is doing just the opposite with three more stores slated to open in the future.
Source: Consumer Reviews