Borders Group, the second largest book seller in the U.S., will take back its e-commerce site and consumer fulfillment operations at the start of 2008 from Amazon.com, which Borders has used as its outsource provider for both for a number of years.

In an interview in the Wall Street Journal, Borders CEO George Jones notes that when the company first began its e-commerce initiative, the options were limited.

At the time, “There weren’t the options for third-party fulfillment that there are today,” Jones said.

The volumes weren’t yet there to do it in-house either: “You had to build a massive overhead that didn’t make any sense in terms of the volume of the business.”

As fulfillment options and consumer volumes have changed, so has Borders' strategy. This is especially true given the uncertainty about who really “owns” the customer when a company outsources both its web site and fulfillment to a third party, especially one that is also a competitor.

“When someone goes to borders.com and winds up at Amazon, Amazon gets the customer and forms the relationship with the customer,” Jones added.