NewsFactor reported today on Amazon.com "moving into yet another retailing realm" with its new wireless store, completely neglecting the fact that Amazon has had a wireless store for at least six years if not more.

I haven't had time to try to track down a press release from when they first opened their wireless store, but all I had to do was check my list of reviews on the Amazon site to find wireless phone/plan reviews from February 2003 and June 2007. I can't link to the 2003 one because the item has been removed from the site and there's no product page to link to. It's just in my review history which is part of my account (and I'm not giving out the password for that). But the 2007 review is still on the site.

As you can see by the 2007 review, their pricing was terrible and it really seemed they'd been neglecting their wireless store. It's nice to see that they're giving it a revamp and clearing out the cobwebs, but it's not a new retailing area for them.

Another quibble of mine is where the analyst quoted at the end of the article says that you probably won't get better pricing or selection than you'd get directly from the cellular provider. That may or may not be true, at least on pricing. The resellers can make $200-300 or more when they sell the phone and plan at the same price the cellular provider is selling the phone and plan. Often they'll put part of that commission into undercutting the cellular provider's price. If you shop around for cell phones, you'll regularly find resellers offering lower prices (either directly or by rebate) than you'll find at the cellular provider's direct sales site. It's one of the few times when the middle man actually gets you a better deal.

Will Amazon follow the example of their competitors and use part of their commission to provide consumers with better pricing than they can get directly from the cellular providers? That remains to be seen. Where they seem to be touting their advantage is in the ease of their selection and purchasing processes. If there's any company that has invested in and perfected those processes, it's Amazon, so that claim may have some weight to it.

All in all, though, if Amazon's history is any indicator, the cell phone store will have to get some serious traction or they'll let it wither on the vine, becoming more and more unattractive in its pricing and selection until they have to drop it... or reinvent it yet again.

This entry was posted on Friday, July 10th, 2009 at 3:30 pm and is filed under Techno Thoughts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.