Failure pattern · United States · 2001–2011
Borders: outsourcing its online store to Amazon
Borders let Amazon run its website for seven years, over-invested in CDs and DVDs, and was late to e-readers. It went bankrupt in 2011 and liquidated about 400 stores.
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
by the numbers
- Amazon-run website
- 2001–2008
- Bankruptcy
- February 2011
- Stores closed
- about 400
- Jobs lost
- about 10,000
What happened
Borders, founded in 1971 in Ann Arbor, Michigan, became one of the biggest US bookstore chains. In 2001 it handed its online store to Amazon, reasoning that e-commerce wasn't profitable. The deal lasted until 2008, by which time Amazon had built a huge lead.
Borders expanded its music and DVD sections just as downloads and streaming took off, and invested in large stores with expensive leases. Barnes & Noble launched its Nook e-reader in 2009 and Amazon its Kindle in 2007, while Borders lagged.
Borders filed for bankruptcy in February 2011 and liquidated later that year, closing about 400 stores and cutting about 10,000 jobs.
Timeline
- 2001
Online store outsourced to Amazon.
- 2007
Amazon launches Kindle.
- 2008
Borders relaunches its own website.
- 2011
Bankruptcy and liquidation.
what went wrong
- Treated e-commerce as non-core.
- Invested in declining formats.
- Late to digital reading.
the lesson
Outsourcing a channel that will define your industry's future hands the future to someone else.
Apply it to your business
- 1Identify which channels will matter most in five years.
- 2Don't outsource capabilities your customers will rely on.
- 3Watch for declining product formats.
Laws at work in this story
Figures are rounded and drawn from public reports, company filings and widely cited coverage at the time. Check the company's latest filings before relying on any number.