Case Scenario:
One interesting aspect of distribution channels occurs when a retailer, in this case, Amazon, integrates backwards with the intent of attracting suppliers (authors with brand names) and the expectation of utilizing other outlets (traditional bookstores) for full distribution of its products. In this case, the largest traditional bookstore chain, which also has a significant online business, has decided not to stock Amazon's products in the hope of discouraging authors from signing publication contracts with Amazon. Effective distribution channels call for vertical cooperation, here among authors and their agents, publishers, and retail outlets. But vertical integration invites conflicts.
Answer the given Questions
Problem 1: Was Amazon wise to get into publishing in addition to its very strong position in retailing new and used books? Explain your answer.
Problem 2: If you were a popular author of children's fiction (with a successful past relationship with a traditional publisher) and your agent (another member of the book publishing channel) asked you whether to approach Amazon regarding the publication of your latest project, what would you say? Why?
Problem 3: Would it matter if you were working on your first book and had no previous relationship with an editor or publisher? If "yes." why would this make a difference?
Problem 4: In your judgment, do you think that either Amazon or Barnes & Noble are likely to change the strategic decisions reported in this article? Why?