Under the extension of the two companies' e-commerce contract, Amazon will provide co-branded areas of the Borders.com and Waldenbooks.com sites with technology services, content, product selection and customer service. Sales made through the sites will be recorded by Amazon, with Borders receiving a percentage of revenue. Terms of the deal were not released.
The contract extension underscores Amazon's continued clout among Web retailers, as the company expands operational control of Borders' online storefronts. The companies first partnered in April 2001, after Borders' own e-commerce efforts failed to mirror Amazon's early growth. Amazon subsequently re-launched Borders.com as a co-branded Web site, taking over customer service, fulfillment and inventory operations.
Over the past few years, Amazon has tightened its relationship with offline retailers such as Borders, which were once expected to become victims of the Web retailer's success. Amazon has similar deals to power e-commerce functions for retailers such as Office Depot, Circuit City and Toys "R" Us. Last year, Amazon and Borders announced a so-called clicks-to-bricks agreement whereby Amazon shoppers can pick up and return items at one of Borders' 400 stores around the United States.
Amazon estimates that sales completed through the co-branded Web sites over the last year are 50 percent greater than Borders' e-commerce sales were for the fiscal year ended January 2001.