Amazon.com Inc. (NASDAQ:AMZN) has developed a successful marketplace with its Kindle e-readers and tablets over the last couple of years, and has done so not only through its own Amazon.com Web site and by working with some brick-and-mortar retailers like Target Corporation (NYSE:TGT), Wal-Mart Stores Inc. (NYSE:WMT) and Best Buy Co. Inc. (NYSE:BBY).
But now, apparently Amazon.com Inc. (NASDAQ:AMZN) is having its sales channels diminished, as a couple of retailers have recently announced that they will no longer sell the Kindle. In May, Target Corporation (NYSE:TGT) announced that it was not going to offer any of the Kindle fleet in its stores, and this week Wal-Mart Stores Inc. (NYSE:WMT) decided to follow suit, announcing that it would sell off its remaining inventory and all existing orders but will not order or sell any more Kindles. This latest announcement comes just days after Amazon.com Inc. (NASDAQ:AMZN) released their new Kindle HD Fire devices.
The word is that the reasoning behind this decision – the Kindle is a popular item at these retailers – could be due to the increasing online presence of Amazon.com Inc. (NASDAQ:AMZN) and its products, and these retailers may no longer want to be showrooms for Amazon.com products any longer. On one hand, this may limit the presence of the Amazon.com brand (since the company does not have its own retail store), and these retailers seem willing to compromise profits from Kindle sales in exchange for selling tablets by Apple Inc. (NASDAQ:AAPL), Google (NASDAQ:GOOG), Samsung and Acer, among others.
However, the risk for these retailers is that Amazon.com Inc. (NASDAQ:AMZN) hasn’t secured an amount of loyalty. If there are customers who are hooked on the Kindle and can’t buy it at Target Corporation (NYSE:TGT) or Wal-Mart Stores Inc. (NYSE:WMT), they may likely wind up on the Amazon.com Inc. (NASDAQ:AMZN) web site – where they may also buy other things rather than going to the retailers’ sites.
By the way, Best Buy Co. Inc. (NYSE:BBY) is still the primary seller of Kindle products . While this is a risky proposition for the retailers, it’s possible that this could work out well for Amazon.com Inc. (NASDAQ:AMZN) investors, like hedge-fund manager Jim Chanos of Kynikos, as it’s likely that fans of the Kindle may end up driving up more traffic – and thus more sales – at the Web site.