If It’s Friday, Amazon Must Be Changing Its Business Plan

Written by Evan Schuman
February 14th, 2008

Amazon this week is undergoing two more strategic changes, one of its own doing and one being foisted upon it by a state government.

Amazon’s own change involves it selling access to its pages to direct rivals. The backstory involves the stunningly thin margins that an E-Commerce behemoth like Amazon enjoys and the realization that Amazon might be able to enjoy better profits by taking a cut of a rival’s revenue than by selling the item directly.

This business plan twist from an Associated Press story that explores these new text-link ads and a renewed push for "movie and music downloads, digital items that don’t take up shelf space or incur shipping costs when they’re purchased."

In the external forces category, New York state is pushing again to try and force Amazon to charge New York customers the Empire State’s sales tax.

This comes from a New York Times story that could have huge E-Commerce implications. If New York succeeds, only a handful of milliseconds will pass before just about every other state will line up to do the same.

Ironically, one of the key reasons for the Borders-Amazon breakup last year was that Amazon didn’t want to get involved in kiosk E-Commerce within Borders’ stores because they feared it would expose them to the costs and complexities of sales tax issues.


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