How Amazon can be a friend to small businesses

I’ve been testing out the Kindle Fire tablet for the last several weeks. At $199, it’s a tremendous value. It’s no iPad — I just upgraded to the new iPad as well — but it provides a solid base-level tablet and reader. I can think of a lot of uses for it: an e-book reader, a video consumption device, and a dedicated Sonos controller. But the most exciting use I can see for it would be for Amazon to turn into a device that helps small, local retailers.

Amazon could leverage its massive scale in searches for online commerce to help drive business to local businesses, while simultaneously generating revenue and cementing itself as the place to go to shop online.

Here’s how I see it working:

• Merchants would use the Kindle Fire to load their inventory on to Amazon.
• In addition to the standard options consumers have for standard delivery, second-day shipping with Prime, or overnight shipping, Amazon would offer the option to buy locally.
• When an item is selected to buy locally, the merchant would be alerted via the Kindle Fire and could confirm the order.
• Once the order is confirmed, Amazon collects payment from the buyer and the merchant sets the product aside. (Larger merchants with sufficient inventory could configure it to auto-confirm orders.)
• The consumer stops by to pick up the item and shows ID.
• Amazon keeps a percentage of the revenue.

Amazon already does this for some merchants who sell through the mail; I frequently buy items from third-party sellers through Amazon’s site.

The key is that the Kindle Fire is a simple, inexpensive device that integrates well with Amazon services. Add in the option to generate revenue with it, and it can be an important step in increasing the connectedness of small businesses.

The Buy Local service could be augmented with local delivery from a company like Postmates. [Editor’s note: This futuristic, cool, visionary stuff is exactly what we’re talking about at the VentureBeat Mobile Summit on April 2-3, where one of the main themes focuses on mobile commerce.]

Amazon has been working to expand its reach into the local market. Its daily deals product, AmazonLocal, is launching a subscriber-acquisition promotion tomorrow, selling $10 Amazon gift cards for $5. Although it has lagged well behind industry leaders Groupon and LivingSocial, this is a sign that it may be getting serious about the deals space. (Amazon sources many of its deals from LivingSocial.)

Beyond local retail there are a number of other compelling services Amazon could offer to make Kindle Fire a must-have for small businesses:

• Deal redemption tracking for AmazonLocal.
• Social media management tools for Twitter and Facebook accounts.
• Scheduling tools similar to Groupon Scheduler.

Amazon and local businesses have had a tumultuous relationship, with some blaming Amazon for the demise of local independent bookstores. But these days, even prestigious independent bookstores such as Portland behemoth Powell’s Books are selling through Amazon. Same-day fulfillment plays to the strengths of local retailers and provides consumers a service that Amazon can’t offer today.