Does Amazon Make Walmart and Target Nervous?

Let’s face it, folks: We live in an era of Internet commerce. Amazon has paved the way for people to buy and sell goods in massive quantities without leaving the comfort of their homes. If you’re reading this, there’s a good chance you’ve bought something off Amazon or bid for something on eBay.

It’s long been argued that online retailers pose a very real risk to local shopping outlets. Why would you pay retail for something at a store when you can pay less online (and possibly escape sales tax)? The fact is: Most people don’t.

The Kindle Fire is basically a Trojan horse.

Does Amazon Make Walmart and Target Nervous?This is one reason it came as no surprise to me when Walmart and Target announced that they would no longer carry Amazon’s Kindle line of products. It makes perfect sense that one major retailer (or two in this case) would see exactly how big of a threat the Kindle devices pose when you consider how many books, movies, and songs are sold through these little devices.

The Kindle Fire is basically a Trojan horse when you think about it. It’s a convenient portal to Amazon’s store that enables users to make purchases with a touch of the screen to avoid lines, unruly shoppers, and higher prices. It stands to reason that many stores would want to avoid promoting the device.

Another factor to consider here is the role that retail stores are playing in a modern consumer’s buying decisions. I personally spend a lot of money locally. In fact, I don’t buy big expensive things online unless I really have to. For all of the smaller things, these stores are basically a petting zoo that allow you to try an item out for yourself before heading to Amazon and making the purchase.

Some shoppers actually buy an item in a store, try it out, and return it for a refund before heading online to pick up one to keep. This might sound crazy, but it happens every single day.

What will replace the Kindle’s spot on the shelf?

A common theory currently making the rounds as to why these stores have decided to do away with the Kindle is simply because they are working on one of their very own. A Walmart or Target tablet would not be entirely out of the question, especially when you consider just how much business these stores are pushing to their respective sites where they can sell a larger variety of merchandise without having to fund local shelf stocking.

It might make total sense for these companies to do this. I’m not entirely convinced, though.

Walmart and Target are both big sellers of the iPad, NOOK, and various Android tablets. The choice to remove only the Amazon Kindle and leave other tablets on the shelf means that both Walmart and Target are unhappy with selling a device that essentially turns their shoppers into Amazon customers. The revenue made by selling the Kindle probably doesn’t hold a candle to the amount of money lost in subsequent purchases.

Just looking at the quarterly reports is a clear sign of how Amazon may very well pose a serious risk to even the world’s largest retail giant, Walmart.

Amazon boasted $17.43 billion in sales during Q4 of 2011. Meanwhile, Walmart brought in $110.23 billion in revenue. This comes from stores in virtually every city across the country and many areas around the world. Amazon operates through warehouses and a website. With these facts in mind, you’d think the gap between these two companies would be significantly larger.

Do you believe that Amazon is making these retail giants extremely nervous? Or do you think that an upcoming tablet branded by these retailers is the reason for Kindle being taken off the shelves?