ACQUISITIONS: Amazon gets into print

Dec 01, 1999 10:30 PM  By

When it decided to expand its e-commerce dominance into the home-improvement market, what did cyber superstore do? Why, it bought a relatively low-profile print cataloger, of course.

On Nov. 9, Seattle-based online bookseller-cum-general merchant Amazon announced that it acquired the catalog operations of Tool Crib of the North, a Grand Forks, ND-based cataloger/retailer of tools and other home-improvement supplies, for an undisclosed sum. Tool Crib will continue to operate its stores.

“Over time we asked our customers what kind of product areas we should get into, and home improvement was tops on their list,” explains Richard Chin, Amazon’s director of product development. While Amazon will continue to publish Tool Crib’s catalog, Chin says, it will shut the Tool Crib Website and sell its products solely on the site.

The desire to please its customers likely isn’t the only reason Amazon is entering the home-improvement market. “The tools category is a $145 billion industry, and Amazon wants a stake in it,” says Mark Rowan, senior analyst of Internet retail for New York-based Prudential Securities. That, rather than the desire to enter the print catalog fray, motivated the Tool Crib deal, he says. “The acquisition will give Amazon access to an established supplier relationship and a wide selection of merchandise, and it will also get Amazon into the business-to-business arena.”

Chin doesn’t dispute Rowan’s assessment. “One of the reasons we acquired Tool Crib of the North is its fantastic selection of tools, which we’ll supplement with supplies from other vendors,” he says.

By co-opting Tool Crib’s merchandise line into its existing Website, Amazon beats home-improvement retail giant Home Depot to the e-commerce punch. Although the $30 billion Home Depot already has an informational Website, it won’t be selling its complete line of 50,000 SKUs online until mid-year 2000.