France plans to make it illegal for Amazon (NASDAQ:AMZN) to offer both discounts and free shipping at the same time, Reuters reported on Friday (June 21).
Culture minister Aurelie Filippetti said the French government was looking for the right time to ban Amazon's "bundling" of discounts and shipping, which bookstores say threatens their business model by letting Amazon to undercut their prices. Amazon already conforms to the 1981 French law that limits discounts to 5 percent of a book's price as set by the publisher. Most French bookstores require a loyalty card for customers to get even that discount.
A spokesman for the Union of French Bookstores, Guillaume Husson, claimed Amazon's bundling of a discount with free delivery amounted to selling books at a loss. "Today, the competition is unfair," Husson said. "No other book retailer, whether a small or large bookstore or even a chain, can allow itself to lose that much money," meaning the amount Amazon spends on free delivery.
For anyone who has ever competed against Amazon, it's easy to feel a little sympathy for the French booksellers—but only a little. Just a 5 percent discount, tops? (That turns out to be common across much of Europe.) And free shipping that basically makes Amazon's price the same as any other bookseller's, except the Amazon book gets there sometime later than a book bought in a bricks-and-mortar store?
Amazon aside, that 5 percent discount limit would outlaw the pricing policies of Barnes & Noble (NYSE:BKS) and even many U.S. independent bookstores.
Whether a law blocking discount-plus-free-shipping will help French bookstores is still unknown, but it seems unlikely. Amazon has shrugged off shipping costs and sales taxes (on July 1, New Jersey becomes the tenth U.S. state where Amazon collects sales tax) and keeps growing. The difference between e-commerce and bricks-and-mortar really does seem to be more than just pricing, and Gallic booksellers would do well to pay attention to that. What's French for "omnichannel"?
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