Target & Wal-Mart extinguish the Kindle

Wal-Mart and Target are joining together to stop selling Amazon Kindles after disputes with Amazon regarding pricing. Target was the first big box retailer to act by not renewing a new order for the Kindle. A Wal-Mart representative told CNN Money in an e-mailed statement this Thursday that the Bentonville based, retail giant would not be ordering any additional Kindles from Amazon.

Wal-Mart is adamant about passing savings onto its shoppers by offering everyday low prices. Therefore, the company needed to re-evaluate its merchandising decision because Amazon refused to offer a lower MSRP for the Kindle. Wal-Mart recorded revenues of $114B for its second quarter earnings. The loss of Wal-Mart as a buyer will definitely impact Amazon’s income statement.

Target made its decision to stop carrying Kindle products in May 2012 and became the first big-box retailer to reject Amazon. Target declined to comment on their reasoning for the decision, but from a strategic perspective, Amazon is a direct competitor and has lower overhead expenses by operating an e-commerce site.

Amazon revealed a new line of Kindle e-readers and four Kindle Fire tablets earlier this month, which are also available in HD. Although Wal-Mart and Target have denied future business with Amazon, the on-line shopping site has buyers, which include Best buy, Radio Shack, Office Depot and Staples. Amazon declined any comments or further decisions in response to this.

How will Amazon sell its Kindle products to a mass audience with the loss of two major discount retailers?