PLEASE do me a favor: DON'T pick out any gifts for your loved ones. Don't buy the book you know they'll love, DON'T get that one gadget you know they've been droping hints about for the last six months, DON'T even bother with gift cards.
You’re going to pick wrong.
I absolutely guarantee you’re going to pick wrong — just like you did last year, just like you’ve done for many, many years. Everyone has just been too polite to say anything.
And then I have to spend days of my life, after the holidays, doing nothing but processing returns. At least once an hour I’ll be asked, “Can’t I just get cash back?”
And sadly, the answer is no.
So let’s all agree: The Perfect Gift Is an Envelope Full of Cash.
I’d love to get cash. Anyone aged 14-28 would definitely prefer cash. Do a gut check: what do you want? Sure, that surprise gift, the exact right thing is great when it comes from the one person in your life (spouse, partner, boyfriend, girlfriend) but for everyone else?
I say: If you’re not sleeping with them, they just get cash.
[If you are sleeping with them, this seems appropriate]
Imagine the time you’ll save. Imagine the lack of stress. If you think cash is too impersonal, put the cash envelope inside of a tin of home-made cookies. That would be fantastic because, c’mon, *cookies* (AND cash!) That would be a holiday gift I’d be talking about for decades. The folks in the retirement home will be sick of hearing about it.
[cash is even traditional in some cultures]
So do yourself a favor. Do your loved ones a favor. Most Importantly, take the pressure and the hassle away from the poor retail clerks who have to process all those damn returns for clothes and other crap gifts: Just give cash this holiday.
Thank you for you time and polite consideration. And I’ll be back in 2014 to repeat this message in RocketBomber’s next Holiday Gift Guide!
“This is when Amazon drastically expanded the number of warehouses to more than 10 around year 2000 and started stocking most products that it sold. The focus shifted to a business model built around excellent delivery performance and efficient logistics. Customers were amazed at how quickly their orders arrived on the doorstep.
“Amazon did not stop reinventing its business model here. In 2006 it went further and unveiled a program called Fulfillment by Amazon, whereby independent sellers could use Amazon’s warehouse network to fill orders and delegate to Amazon their logistics-related decisions.
“Under this new model, Amazon essentially became a wholesaler of goods sold by many much smaller virtual storefronts. What the distributors and publishers, in the aggregate, were to Amazon in its early days, now Amazon was to the participants in its fulfillment-for-hire program. What used to be outsourced became the core proposition and strength.
“Amazon’s recent decision to further develop its fulfillment capabilities (by spending close to $14 billion to build about 50 new warehousing facilities) to bring a large fraction of the US population in the same day delivery catchment area reflects that, for Amazon, the Internet retail model has now come full circle.” [/blockquote]
“Why do some stores succeed while others fail? Retailers constantly struggle with this question, battling one another in ways that change with each generation. In the late 1800s, architects ruled. Successful merchants like Marshall Field created palaces of commerce that were so gorgeous shoppers rushed to come inside. In the early 1900s, mail order became the ‘killer app,’ with Sears Roebuck leading the way. Toward the end of the 20th century, ultra-efficient suburban discounters like Target and Walmart conquered all.
“Now the tussles are fiercest in online retailing, where it’s hard to tell if anyone is winning. Retailers as big as Walmart and as small as Tweezerman.com all maintain their own websites, catering to an explosion of customer demand. Retail e-commerce sales expanded 15 percent in the U.S in 2012—seven times as fast as traditional retail. But price competition is relentless, and profit margins are thin to nonexistent. It’s easy to regard this $186 billion market as a poisoned prize: too big to ignore, too treacherous to pursue.”
I like this article a lot — not just for the two paragraphs quoted above (which hit on severalpoints I’ve also made)
“The change in customer demand does not begin and end with a web site and is not limited to online sales. When someone wants a book, they will seek it out from any retailer, and their buying decision is affected not by the discovery process but rather the same mix of price and convenience that backs all of their sales decisions.” Bookselling: Not Dead Yet. : RocketBomber, 12 July 2013
“The company lacks three of conventional retailing’s most basic elements: a showroom where customers can touch the wares; on-the-spot salespeople who can woo shoppers; and the means for customers to take possession of their goods the instant a sale is complete. In one sense, everything that Amazon’s engineers create is meant to make these fundamental deficits vanish from sight.”
Anders, MIT Technology Review, op cit.
“To Amazon, retailing looks like a giant engineering problem. Algorithms define everything from the best way to arrange a digital storefront to the optimal way of shipping a package. Other big retailers spend heavily on advertising and hire a few hundred engineers to keep systems running. Amazon prefers a puny ad budget and a payroll packed with thousands of engineering graduates from the likes of MIT, Carnegie Mellon, and Caltech.”
Anders, MIT Technology Review, op cit.
Right now, Amazon is winning the fight because they actively seek out ways to minimize their weaknesses. When a customer considers the ‘mix of price and convenience’ many, many times Amazon wins there, too. The question for competitors is how to find a chink in Amazon’s apparently fool-proof business model and attack-proof walled garden.
Walmart is trying to think laterally — leveraging what they have that Amazon doesn’t: Thousands of physical stores already in close proximity to their customers. Walmart suffers from two serious handicaps, though. First, Amazon has a 15 year head start, and second, Walmart has a serious image problem. For many consumers, Walmart = cheap — and not in a good way.
conclusion of the article: “Facebook is in a classic position where, as a dominant provider of horizontal social services, it is in danger of being taken down piece by piece by several vertical players who provide specific, narrow experiences very well. Facebook has become a social media firehose. It won’t be replaced by another firehose, but by a bunch of different cocktails that users can customize as they please.”
Is Amazon also a “dominant provider” with a horizontally-expanded business? One can also easily make the argument (in books, especially) that Amazon is also simultaneously trying to be a vertically-integrated near-monopoly — and I don’t mean “monopoly” in anti-trust terms, per se, but rather that Amazon is seeking to develop a self-sustaining, wholly-owned ecosystem of books that operates independently of the ‘old’ book market, to the point that the competition becomes irrelevant.
Ignoring books for a moment, though: Amazon is vulnerable on other verticals. Zappos and Diapers.com were bought up by Amazon before they could really become a headache — and perhaps also to keep them from becoming business-magazine-cover ‘success stories’ that might inspire others.
Where would I attack Amazon? I think DVDs might be an option, though it would be hard to recreate imdb.com from scratch. (Amazon bought imdb, too, btw). A ‘Goodreads’ for movies might be successful, though — maybe Rotten Tomatoes should try their hand at online retail.
Music is always an opportunity — iTunes seems like a winner here (Amazon is in 2nd place) but many smaller players are working the fringes. Music has always seemed like an indy, garage type endeavor (at least in myth) and I could see a mix of Pitchfork-like-reviews combined with Soundcloud-like-easy-streaming-and-sharing working exceptionally well — you know, except for the selling things and making money part. (if you figure that out, let me know)
Newegg and Tiger Direct already compete with Amazon in the computers, peripherals, parts, and small electronics space — and I think manufacturers are doing themselves a disservice by not doing more to explore and exploit direct sales to their customers.
(The same goes for publishers, especially the genre publishers in Mystery, Romance, and Sci-fi.)
This is all just food for thought: if I had a killer solution, I’d be writing a business plan and shopping for VC funding.
The point I’d like to make (yes, I’m finally getting back around to it) is that the e-commerce revolution is a change in customer demand. The better one enables customers — with good information, guidance in the form of curated collections and impartial reviews, ease of ordering, and sufficient choices — the better one will do. Indeed, price is the only consideration for some customers — but not all. A good experience, a no-bullshit approach, and intuitive seach tools (combined with expertise and selection) might go even farther than ‘lowest price’ with most customers. We all know: you get what you pay for.
“You see, if I believed that humans shopped for no other reason than to acquire goods, I might be more aligned with Andreessen’s view but in fact, we don’t shop just to get stuff – any more than we go to restaurants purely for nutrition. In fact, we often shop to fulfill other deeper needs as well – the need to disconnect, to socialize and to commune – and at times to simply be out in public. Why else would celebrities brave the hoards of paparazzi to shop for things they could undoubtedly have delivered to them on a silver platter? The physical, human experience of shopping is in some ways of far greater value than the goods that come along for the ride.”
In the face of (what everyone tells me is) overwhelming competition from Amazon, or the internet generally, there’s no point in physical bookstores anymore.
The Bookstore has become a huge target, and one uniquely vulnerable, because everyone knows the bookstores are doomed — everyone agrees that either ebook downloads or internet retail (or the combination of the two) is qualitatively and quantitatively better than physically stocking books on shelves for eventual sale. Customer engagement, available titles, delivery logistics, price: on all these metrics the physical book — and that quaint anachronism, the ‘bookseller’ — have both been measured and found wanting.
In the new digital age, the dead-tree book is… superfluous? wasteful? The 21st century analogue of the 20th century buggy whip?
Most Books (at least in 2013) are physical objects that exist in physical space. (Yes, most books are physical objects because no matter how much one loves digital or how easy it is to write vampire fiction, or to make digital copies of vampire fiction: that’s 5 years of digitization and sales history stacked against five centuries of mechanical printing backed by fivemillennia of publishing history.) Plus, for every e-cheerleader advocating digital, there is a ten year old clutching his physical copy of Diary of a Wimpy Kid. (Not a senior citizen who hates computers and doesn’t cotton to your “new-fangled e-reeder” – a kid with a book. And in the United States, four million kids turn ten every year.) I feel there is plenty of life left in dead-tree-books.
Bookstores are physical spaces that, while originally designed to sell the damn books, have since been hijacked into being ersatz libraries and the default gathering space. I used to call this the “burden” of bookselling, especially of the corporate big-box-chain: we get used and abused by our customers daily. Folks camping out all day, reading magazines or browsing the $80 art books, buying nothing except maybe a coffee, generally making life difficult for other customers, and treating the place like home.
The video is not a parody, it’s the real deal. It’s also an hour long — If you don’t have time to watch the whole thing, skip ahead to 38:40 for some hints on why bookstores sell coffee, or to 50:00 to see SandwichBoardVader, followed by the book stalls of Central Park — and the final 8 minutes of the vid (as Whyte wraps up his points) will give you a few conclusions, as well as the flavour of the whole.
The Social Life of Small Urban Spaces was also (or perhaps I should say, was primarily) a book in 1980, ISBN 9780970632418, available used these days; though now also available in a new edition from PPS, The Project for Public Spaces.
The reason I linked to and embedded the Whole Damn Video is that while this 1980 flashback isn’t just the first-ever study on how people use social space: it is also exactly how people treat bookstores today. Not enough seats? Any windowsill or stack of books will do. Chairs? Mere props, to be moved at will and to satisfy whims. Quiet, secluded corners? Hell, the bookstore is full of them and our guests and customers will freely move both tables and chairs to whichever corner best suits them — or camp out there on the floor.
You need a place to meet your friends before the movie; you need a neutral, safe location for the first/blind date; you need an easily-described, easily-found landmark as the venue for job interviews; you’re a tutor but for multiple reasons you can’t meet your students in your own home; you’re a student, it’s the end of the semester, and you know all the lounges, meeting rooms, hell even the hallways on campus are going to be packed: where do you and your classmates go to finish the next group project?
If your local bookstore is still open, and selling coffee besides: Duh, the bookstore is exactly the social space you need. The Library closes too early, restaurants and bars expect you to order, and pay for something, and oddly the outdoor parks and other public spaces are unfit for this use.
The only “public” space available is actually a corporate, private space that is also attempting to engage in retail. (Wouldn’t Ikea be better? They have more tables and chairs…)
Why is this a unique burden of bookstores? To maintain a social lounge even to the detriment of our primary business? For whatever reason, it seems that only the bookstore will do. For many, many customer expectations and interactions, the ‘bookstore’ has nothing to do with books.
Last essay, I quoted an Inc. Magazine piece [Paul J. H. Schoemaker, 21 Nov 2012] on re-thinking your products. Let me quote it again:
“For example, consider the widely used product life-cycle concept in marketing. This biological metaphor suggests that products naturally arise, grow, mature and die, just as individuals do. So if managers wedded to this view see a product’s sales decline for several quarters in a row, they would naturally think that the product is in decline. And once the product strategy is adjusted to reflect this presumed stage of decline, resources may be withdrawn and decline will quickly follow (as a self-fulfilling hypothesis)…
“Procter and Gamble as well as many other companies, however, reject the product life-cycle metaphor as unduly self-limiting. Rather than viewing the product as a single organism proceeding through its life stages, they view the product as the species itself. So, the product must be adapted to changing circumstances to remain viable.”
— And so, the first big question for booksellers, even before we get around to what needs to change: What the hell is our product?
Is our main product what we think it is?
“Bookselling” isn’t the sale of books. “Bookselling” is the agreed-upon social construct: In exchange for retail sales (and coffee/cafe sales) sufficient to support the whole, the Bookstore agreed to be an open reading room, meeting place, learning resource, occasional event space, and yes: the only retailer where you can sit down in the middle of the floor, take off your shoes, and hang out. That was the deal. Booksellers didn’t change the deal: our customers did. You did.
It is not that “bookselling” was no longer sustainable, but rather that readers wanted all of the services, advantages, and atmosphere traditionally enjoyed at a bookstore, but not enough folks were willing to pay their freight. And when the deal collapsed, once again this was spun as a failure of bookstores:
In 2007, technological change was compounded by the the worst recesssion in 80 years. Borders, already weakened, collapsed so fast many were willing to write off the whole industry. Every tech blogger and business writer ignored both the services bookstores were already providing to communities [urban, suburban, exurban] and discounted entirely the crap we booksellers were willing to put up with from our “customers”, and boiled it down to price: if it’s cheaper online obviously it’s better online and so, bookstores suck. Many were (and are) already writing us off as fossils — as they sit in our cafe, drinking our coffee while flipping through magazines they weren’t going to buy. Some don’t even pretend to shop — they just park it in a chair with a laptop, hogging a whole table, and use our free wifi to go online to denigrate bookstores generally on whichever platform: “It’s way too crowded, I had to wait 10 minutes for a seat to free up, and there aren’t nearly enough power outlets. I don’t know how this bookstore plans to stay in business.”
If bookstores are getting more than their fair share (hell, their share plus Everyone Else’s share) of freeloading in-store foot traffic, the obvious follow-up question is:
[image source, flickr, Robert Scoble, tagged ‘Shenzhen China book store’]
Here’s one take:
(spoiler: I strongly disagree)
“What would I do if I were running B&N today? Good question. I probably would take a close look at what Indigo, the B&N of Canada, is trying to do. It is attempting to become a lifestyle shopping destination in categories in which books play a consequential part but extending far past books. Categories like house and home, cooking, kids, babies, paper and self-help are tied to big book categories. Indigo can have a legitimate hope of creating a shopping experience across the category that integrates books-and-beyond in a compelling enough way to get enough traction with customers to fill up the store.” Should Barnes & Noble Turn into a Mini-Mall? : Roger Martin, guest post on the Harvard Business Review blog network [blogs.hbr.org], 15 July 2013
If we can’t sell the books, how do we sell that other crap?
The primary “product” the bookstore is selling is atmosphere. A place to be, and to meet. To spend time with family and friends on a Saturday afternoon.
What product lines, what categories do you add to that? Jigsaw puzzles, stuffed animals, stationary? Really?
How about a couple of nice, sit-down restaurants, a decent pub, and a movie theater instead. We can get people into the bookstores — and then after an hour or four they go home, maybe with a book. It seems to me that selling books is a decent start (and an undeniable draw) but the customer experience and the shopping trip itself is our actual product. How about we offer our customers a decent lunch to go with that, or dinner-and-a-movie, or the book group that meets in the bookshop pub every Tuesday?
Bookstores are a destination. Bookstores are entertainment. [Why in the hell am I open until 11pm on a Friday for folks to hang out in else? Corporate has figured out only the very smallest part of this…] Don’t dilute the book store experience by turning it into Target (or worse, Walmart): The way out is not to add more retail lines, but to embrace the social and pleasurable aspects of hanging out in bookstores. Build the Bookstore version of an amusement park.
You know what everyone misses these days? Record Stores. An actual, sizable record store that had inventory, not just a couple of aisles, or a rack or bin of discount CDs by the register. “I used to be able to spend hours in a record store” – you don’t become a “lifestyle shopping destination” with more retail crap, what you should be selling is the browsing experience.
Call this the “critical mass of inventory” — and right now, no one is stocking CDs anywhere near critical mass. Yes, I know: it means a couple of million spent in sunk inventory costs. Write that check. Think of your whole sales floor as a factory: Spend 3 or 5 or 10 million dollars in “sales equipment” and watch as that machinery sucks in customers and churns out sales.
This idea of the sales-floor-as-factory is also why I strongly advocate for Even Bigger Bookstores. 25,000 square feet is not the ideal size for a bookstore, just the footprint that was widely available in the early 1990s. 25,000 square feet is either 4 times too big, or ten times too small. In order to reach a critical mass of books, large enough to compete with Amazon, we need more. Build out to 300,000 or even 500,000 square feet — too big, you say? Well, we’re going to need room for that movie theater, and the pub, and the fine dining, and enough tables and chairs for everyone (the comfy ones, like we used to have) and hell, maybe we can set aside 25,000 square feet for a decent record store.
Those CD sales are incidental, though. Like the massive stacks of books, they’re just The Draw. The idea is to get someone into the bookstore and have them stay all day.
The average cost of a roller coaster is $8 to $10 Million. […a single roller coaster; most parks have a half dozen marquee coasters and twice as many smaller rides.] The cost of inventory for one big box bookstore is just $2 Million — for the cost of a single roller coaster, I could buy 5 times the inventory, half a million individual books or more. Let’s splurge, let’s spend $20 Million on inventory, get things up to a Million Books Under One Roof. My advertising is practically writing itself at this point.
This isn’t about a lack of demand, or a lack of money either: An average-to-large size metropolitan area of about 3-4 Million already has 10 chain bookstores in it. Draw together these fragments into single, massive, Landmark locations. Each landmark is also a local order fulfillment center, either for internet orders or to pick up at (much smaller) satellite locations. Next day or even same day pick-up might be possible — the cost of a mini-van, a driver, and the insurance has got to be cheaper then 10 sets of duplicate inventory in duplicate big boxes.
What would *I* do if I were running B&N today? — I’d be closing stores, sure. The “right number” of stores might be 100 or so. The Big Box is not a natural fit for bookstores anyway, it was just the cheapest, easiest option at the time. Instead of leasing boxes and opening stores, a smart bookseller would be building their own malls. Instead of relying on vague efforts and projections and promises that complementary businesses will move into the shopping center or neighborhood, do it, become the developer. If being next to a movie theater is good for your bookstore — and they tell me it does make a big difference — then open and run the damn theater yourself.
In inflation adjusted dollars, Disney spent $144 Million to build the original Disneyland. For half that I could build an amazing bookstore, one that would be the envy of the world.
disclaimer: Yes, I work for Barnes and Noble. I also speak for myself, have better ideas on how to run a bookstore than the damnable corporate overlords, the information presented here is publicly available not derived from my position as ignorable field management mucking about in the trenches, and all opinions below are my own. Having satisfied the “code of conduct and business ethics” I now thumb my nose at the necessity for a disclaimer and wonder when we let the lawyers get in the way of a good drunken rant.
[note to self: copy that bit above as the new boilerplate disclaimer for business-related posts, and add it to my ‘about’ page for the blog.]
Amazon is getting credit for expanding it’s warehouse work force from 20,000 to 25,000.
Out of courtesy, I won’t steal and embed PW’s chart, but you can find it in the article linked, which I recommend you go ahead and read […or here, direct link].
So Amazon is looking to increase its warehouse work force by 25% (alongside the additional warehouses built, economic activity, etc etc) and gee that looks great. “Amazon is creating jobs! Let Me Go Make A Speech About It!”
I know Amazon sells other stuff, but the huge investment in customer fulfillment logistics has to be wedded to the expectation on Amazon’s part that these moves will increase their overall sales, including their share of all book sales: Big, and looking to get bigger. A proportional increase in market share to match the increase in staff would take them from a quarter of the retail book business to a third, 33%, one in three of every book sold.
You know, just by hiring 5,000 people to work for, what was the figure, $11-15 dollars in hour? — doing physical labor in a warehouse, which should be admired, not denigrated as it is hard work but honest — but c’mon, even with Amazon stock options: this isn’t a career path. It’s a job, a decent job, but with exceptionally few opportunities for promotion and no lateral opportunities for advancement.
B&N has a smaller share of the retail book business [it pains me to admit]. But B&N employs 34,000 full and part-time employees as of April 27, 2013, in 1300+ storefronts: the 675 superstores and the 686 college bookstores. [source: page 5 of B&N’s most recent annual report]
Damn. B&N now has more college bookstores than Big Boxes. This is… OK? That business decision is above my paygrade. It seems wrong, though. College bookstores are great, I have to admit: solid margins on textbooks, guaranteed customer base, extremely seasonal (the beginning of semester crush) but also regular and something that can be planned for, and around.
There are drawbacks though — and I’m going to take some space to say this even though it is taking me far away from my topic:
College Bookstore locations are, in almost all cases, owned by the college and only the operations of the bookstore are leased. This is even worse than having a landlord, as the College owns the location and also still technically owns the business. I’m sure B&N signs multi-decade deals, or at the very least, provides strong incentives and options for schools to renew whenever the operational agreements expire — but this is not the rock-solid business some assume
“B&N College may not be able to enter into new contracts and contracts for existing or additional college bookstores may not be profitable.
“An important part of B&N College’s business strategy is to expand sales for its college bookstore operations by being awarded additional contracts to manage bookstores for colleges and universities. B&N College’s ability to obtain those additional contracts is subject to a number of factors that it is not able to control. In addition, the anticipated strategic benefits of new and additional college and university bookstores may not be realized at all or may not be realized within the time frames contemplated by management. In particular, contracts for additional managed stores may involve a number of special risks, including adverse short-term effects on operating results, diversion of management’s attention and other resources, standardization of accounting systems, dependence on retaining, hiring and training key personnel, unanticipated problems or legal liabilities, and actions of its competitors and customers. Because the terms of any contract are generally fixed for the initial term of the contract and involve judgments and estimates which may not be accurate, including for reasons outside of its control, B&N College has contracts which are not profitable, and may have such contracts in the future. Even if B&N College has the right to terminate a contract, it may be reluctant to do so even when a contract is unprofitable due, among other factors, to the potential effect on B&N College’s reputation. Any unprofitable contracts may negatively impact the Company’s operating results.”
to that I would add:
College bookstore locations vary greatly in size, but most are smaller than 20,000 sq.ft. – while the big box superstores start at 20,000 sq.ft. and most are a good bit larger.
Operating a separate chain of college bookstores under the same trade name leads to brand dilution and customer confusion. Technically, if you bought it at a college B&N, I can’t even process the return at one of our trade stores. Yes, I know they’re only 6 miles away. Yes, I know they have a big B&N logo on the front, just like me. [Oh, of course I know a work-around. I’ve been working-around our computer systems for years]
Related: So the B&N at Georgia Tech sells textbooks, iPads, computer software, college-badged sweatshirts, some home goods (dorm goods?) — they both rent and buy back textbooks, and (most hurtful) they have a larger manga selection than I do at my store. This is all because they are on a College Campus, operate as a College Bookstore, and That Is A Different Business. I don’t and can’t do any of that. But there is this Big Fat B&N logo right above the front door… Since the GT store is listed in the phone book as “The Georgia Tech College Bookstore” *no one and I mean no one* can find that telephone number, but oh boy howdy can they find the listing for “Barnes and Noble, Atlanta” so at my very fine bookstore not only do I get my daily call volume, I also [joy, joy] get to inform and educate the general public about the idiosyncrasies of our byzantine corporate structure, the hedgerow that exists between the college and trade divisions of my company, and why *I* can’t buy, sell, rent, order, or process a return on their textbooks for them. It’s fun. On top of an already stressful job, why, it might drive one to drink.
The built-in divide extends to our website: use the store locator, and you’ll get the Trade locations but none of the college bookstores. Good luck even trying to find their address online. And yes, customers call my store every day looking for even this basic information on the two B&N College Bookstores in town.
None of this would matter were it not for the deliberate muddling of the B&N/B&N College brands. This isn’t just a customer service issue: how much of the stock valuation and potential spinoffs, sales, mergers, buyouts or buy-ins of the Nook/B&N brands are potentially spiked because of uncertainty about which operations (trade, college, online retail, and online digitial) are included in any potential purchase or investment? The four, or five, Barnes & Nobles each need a brand and identity — hell, make that six Barnes & Nobles if we include the (recently-abandoned?) nook hardware. By keeping it all much-too-close, and by being secretive and playing the spinoff game too close to the vest: the whole company suffers.
before I was sidetracked, I was talking about jobs.
Right now Amazon employs 20,000 warehouse serfs, and is looking to hire more. — 20,000 out of 88,400 full- and part-time employees [source, pg 3, 2012 Annual Report, pdf] — so order fulfillment is just a sideline for Amazon as they only dedicate a quarter of their staff to the task. One presumes the other 75% of Amazon is working on either web solutions, hardware, collectively hypnotizing Wall Street, or crushing my soul.
If one were lucky enough to get an Amazon warehouse job in Tennessee, what are the chances you could move up from that job, internally within Amazon, to Seattle and some sort of web, corporate, purchasing, accounting, or human resources position?
[I’ll leave that as an exercise for the student.]
Barnes and Noble, with even less book market share, employs more people: 34,000. Now of course that included the home office staff, our warehouse employees (yes, we have those too) but mostly it’s the booksellers in 675 Big Box Bookstores, doing the impossible and exceeding expectations daily*.
[* in 2008]
I am the first to acknowledge the bookstores have changed. In 2008, B&N had 718 Big Box Stores and the company employed 40,000 full- and part-timers. (not including seasonal hires: each December would add another 10,000 temp ‘booksellers’ to that total). The benefits, frankly, were awesome: even part-time, 20hr a week employees qualified for health benefits (in 2008) and (in 2008) the number of full time positions was roughly equal to the number of part-time. There was an employee development track, and a ladder: from part-time to full-time to “lead” to “dept. manager” and from there into a salary management staff position. In 2008. Or going back, from roughly 2000-2007 while the chain was still actively expanding, with multiple new store openings in each metropolitan area, annually and while the corp. still looked to develop talent from within.
Why, one could join the company in 2001 as a part-time, seasonal bookseller, but if one had aptitude, a willingness to work flexible hours, and kept showing up and doing the job – between training, on-the-job experience, and making the most of available opportunities: a bookseller could go from the back room to front of store and on to store management.
That door closed in 2008. While the chain was expanding, and promoting from within, opportunities abounded. Now, in 2013: we’re closing more stores than we open, and rather than look for talent in our own staff — sadly — there is a full-on corporate initiative to actively recruit managers from other retailers.
[If Len, Mitch, Dan, or Steve feel it is necessary to fire me for letting that slip, fine.]
In the 5 years past, B&N has gone from a culture that actively developed and promoted talent internally, even as far down as the individual store level, to… well, to what? To a caretaker organization merely overseeing their own long fall? Yet-another-retailer who hires only part-timers – because that’s what Wal-Mart is doing and we have to compete with the lowest common denominator? Paring back on customer service because payroll is the only variable the corporate office has control over, even when our own customers say the only reason they shop online is they no longer get the service in-store that they are accustomed to?
A fading bookseller chain can only manage 25,000 bookseller jobs (we’ll assume the rest are in a warehouse or at corporate) while Amazon boasts 20,000 warehouse jobs (since they have no bookstores we have to consider these as equivalent) and Amazon is looking at adding 5000 more.
I would love to devolve this down to a single equation, but I think the whole post above kind of negates that.
Bookstore jobs were good jobs, up until Amazon ruined it, and my corporate overlords went Full-On-Wal-Mart on our employees.
Amazon Warehouse jobs are really excellent warehouse jobs. That said: warehouse jobs suck.
And it all comes down to ‘efficiency’
We’re losing jobs because the old jobs were ‘inefficient’ and for some reason that is bad.
Inefficiencies are Great. Bookstores should, honestly, be as inefficient as possible, as that is the singular bookstore characteristic that spawns discovery.
[What is it with me and the food analogies? I’m fairly certain I’m eating enough…]
When you go to college…
OK, so it’s more about when *I* went to college; I feel my experience is typical but may not be universal – but as in so many of my posts, I utilize the second-person while writing because I want to make it seem more immediate to my readers. Anyway, moving on:
When you go to college and for the first time are away from home and have to grub for yourself (no more parental guidance and/or mandates on that front), even when you have a (parentally supplied) meal plan via the college dining halls (hey, you’re a freshman, and Mom didn’t want you to starve) :
1st. You tend to go a little nuts with fast food.
2nd. You also explore the world of microwavable convenience foods.
3rd. You run out of money. You do the ramen thing.
4th. You finally give in and actually use your meal plan for a week.
5th. You figure out the worst, least healthful, most-fast-food-like options at the dining hall.
6th. You try cooking for yourself in the dorm kitchen. Once.
7th. You consider living on Mountain Dew and vending machine food.
and then finally someone clues you in on the cheap-fast-mostly-good pizza place (or multiple places) that will deliver right to your dorm.
Given your age at the time (late teens, still growing) and your finances: anything hot and covered with cheese is delicious* and the cheaper the better. College kids and pizza are kind of a stereotype, actually, and I’m sure while it’s not true of everyone: I know you recognize the type.
Maybe not pizza… But food delivery to dorms? I’m pretty sure that is universal. (in 1993 at Ga. Tech there was a pizza delivery place that also did chicken fingers — no, not wings — and would pair them with thick cut steak fries and a homemade honey mustard. For like $5! Those were amazing; I still miss those. The place that made them was bulldozed in 1995.)
Soon after you are able to make your own food decisions, you discover pizza delivery and it is literally the best thing ever — for a time — but then you grow up.
After a few semesters (or years) of fairly continuous pizza, punctuated only by late-night trips to greasy-spoon diners (if you were lucky; Krystal or Taco Bell if you weren’t) eventually you realize that this sort of diet is non-sustainable. That or you turn 30. Or you get married, and your wife has other ideas about what you should be feeding your kids.
Your tastes change, you discover a wider world of options, you find new cuisines and new restaurants, you discover the joys of sharing food with friends, you discover a conscience and think about where your food is coming from.
Even if you don’t become a full-on foodie, I think most of us would agree that supporting our great, local, small restaurants is better than shopping at nationwide franchises and chains. When we can find a great, local, small pizza place – that delivers! – then our conscience is salved and we can fall back on the old bad habits anyway. (In *my* neighborhood, I found one with a bar – best/worst thing ever!)
I think the main point I’d like to make, though, is that when we are young and everything is kind of new to us, we can go overboard on something that is tasty and convenient.
And after we grow a bit, while we’ll still do the easy thing that we know is bad for us — we just do it less. We order pizza every other week, or once a month, rather than 3 nights a week and every Saturday night.
Internet retail (yes, which 20 years old already) is still in that young-college-age phase where we do what seems easiest even when we know (or eventually learn) that it’s kinda bad for us and unsustainable in the long run.
“W00T! Amazon! I ♥ those guys! Anything I want, delivered fast, cheap, and I mean anything I want! W00T!”
As someone who worked as an RA in college: this is exactly how freshman reacted when they discovered the local pizzerias that delivered.
The market will continue to mature. Options that seem vague and mostly useless now will grow on you in time, and you’ll find yourself exploring more, trying more things. Options that seem stupid now, while your are still enjoying Amazon/CollegeDormPizzaDelivery, will slowly make more and more sense to you later as you consider the other costs (outside of just dollars) built into the ticket.
I know guys well into their 30s who never really grew out of that. (even after marriage, kids, etc. – it can take a diagnosis & prescription for cholesterol and high-blood-pressure meds to scare them out of it).
I guess what I’m saying is Amazon is fine, in moderation. But look around, be adventurous, explore, graze, and maybe incorporate some local options in your overall consumption diet.
* anything hot and covered with cheese is still delicious. I’m one of those guys in their 30s who never really grew out of that phase. I cook at home quite a bit *more* these days, though.
note from MB: this extended aside was written as part of a longer post on the Business of Bookselling – the idea was compelling (to me) but not a good fit for the larger argument I was trying to make. Not one to be wasteful, I decided to pull it out for its own post. There isn’t an argument here (at least not a complete argument) (or a firm conclusion), but I feel the analogy might give some folks a new perspective on just how tough it is to sell books these days.
The Pie’s the Thing.
Let’s say I save my nickles and pennies and decide to open up a restaurant. I notice folks like pizza, so I decide to make it a pizza restaurant.
To keep things easy (on me and my staff) even before I open, I also decide it’s going to be a pizza buffet – one of those all-you-can-eat types — we pick the top 20 favorite pizza-topping-combinations, we arrange to have at least 10 of those 20 coming out hot and ready to eat multiple times throughout the lunch and dinner service, on a easily-browsed buffet line where you can see what we have and grab it. Cashier is to your left.
We’ll cycle through recipes to keep things interesting, so the next time you come in, you might not see an old favorite, but it’ll be back soon. With the recipes, a small staff, and a plan: we’re good to go. We advertise the pizza buffet, we open for business…
And our customers aren’t having any of it.
Instead of grabbing a plate and taking pizza off the buffet service line, everyone who comes in just grabs a table and waits. They demand someone comes to the table to take their order, even though (from the sign outside, to the service line inside, right down to how the tables are arranged and the whole restaurant is set up) it should be obvious this is a take-what-you-want buffet-style dinner service.
“You sell pizza here, don’t you? As soon as you send a waitress to my table, I’ll order.”
“What kind of restaurant are you running here? No one has been by to take my order and it’s been 5 minutes!”
…but sir, this is a buffet, you can just help yourself…
“NONSENSE. If you sell pizza, you have to be a full-service restaurant. That’s obvious. That’s the only way to sell pizza. Are you sure you know what you’re doing? … I’m Still Waiting…”
This is the Booksellers Conundrum — we do everything we can, to make the books easy to find, and all day long the customers ignore signs, refuse to walk more than 20 feet, and generally flop around the main aisle,
“Oh your store is *So Big*! How does one find anything?”
On top of that, no one can run a bookstore unless we also provide the equivalent of a research librarian with a graduate degree. “I need a book comparing the economic impacts of solar and other ‘green’ alternative energy sources vs the so-called cost savings we enjoy because fossil fuels are an established industry where historic investments and other sunk costs have already been repaid.”
come again? Of course that wasn’t a real question: the customer asked “Where are the books on solar energy?” — I didn’t get to what the customer *really* needed (the chunka-text above) until we’d been looking through the bookstore for a good 15 minutes. Pro-tip: if you’re writing a graduate paper on it, there likely isn’t a book about that specific topic yet.
“Yeah, I don’t have a title or author, but I need anything you might have on the import-export business, logistics, and agile business management.” “Yeah, I just heard an interview on the radio but I didn’t catch the author’s name but the book sounded really interesting, do you have it?” “This is great, but do you have any books on organic ostrich farming?”
[bored]hi my name is matt i am your waiter how can i serve you today.[/bored]
“Great! So it turns out everyone at the table wants something different but we’re not sure exactly what; say, instead of this menu can we see the pizzas? and you do sell by the slice, right?”
So. um. We’ve set up a beautiful buffet, and instead of looking at it [browsing the bookshelves] you want someone to tell you what’s on there, then bring the options to you so you can then critique our selections and tell us how bad we are at our jobs?
Oh, I’m not done with the pizza metaphor yet. Two weeks into running our buffet/sudden-full-service-pizzaria, the phone starts ringing.
“Hello, yes, I need 2 lbs. of buffalo mozzarella”
“yes 2 lbs. of buffalo mozzarella, can I pick it up this afternoon?”
“Surely this can’t be the first time you’ve been asked; you do sell pizza, right? I just need 2 lbs of buffalo mozzarella and I’d like to pick it up today.”
We do sell pizza, but, um, you want us to just sell you the ingredients?
“YES. Man you’re slow.”
But sir, we’re not really set up for…
“AHEM. So. You sell Pizza, yes?”
“And you use mozzarella, yes?”
“And so you have mozzarella for sale, yes? …yes?”
…um, when you put it that way…
“So I’ll be by in 2 hours – ah no wait, I’ll be busy – I’ll send someone by in 2 hours, just have my cheese ready for them to pick up.”
What? Ah, sir we sell pizzas…
“Well you certainly won’t be selling them very long if this is your attitude toward customer service. Hmf!”
The bookstore is set up for discovery. You come in, you browse, you read the jacket copy, maybe a chapter or two, and eventually: you buy. The bookstore is an all-you-can-eat buffet.
Our customers no longer treat us as such. Customers come in, cruise right up to the information desk, and they demand books (and get pissy when we’re sold out of, say, The Cuckoo’s Calling) or they get on the phone and treat us like a pizza place: “I need 12 copies of Maxwell’s Failing Forward and Bob the unpaid intern will be there by 2pm to pick them up. Oh, even better: can I give you my credit card over the phone? You don’t deliver, by the way, do you?”
Oddly enough: we weren’t set up for that.
Before you say, “Well that’s your job, isn’t it?” — How many retailers have 4 separate phone lines to handle the daily customer call volume? And please tell me which other retailers have an information desk? No, not a customer service desk, but an honest-to-god information desk where a part-timer making minimum wage is expected to routinely make recommendations based on their personal comprehensive knowledge of Literature, History, Philosophy, Religion, Sociology, Psychology, Technology, Foreign Languages, Pop Culture, what the kids are reading, what Oprah is reading — oh, and of course, at least some familiarity with the sentimental poetry of Alphonse de Lamartine.
The question at a retailer is, “which aisle has Peanut Butter?”
I don’t know what bookselling is anymore, but it ain’t retail. Retail is the income producing activity that funds the rest, but our job is not retail.
We will try to accommodate you as much as we can, but you’re treating an all-you-can-eat, $4.99 pizza lunch buffet like a personal caterer and specialty grocery store. Instead of enjoying the local neighborhood bookstore for what it is, and relishing that, *reveling* in it: everyone wants their local bookstore to also be the internet.
Yes, your local bookstore can and does do special orders. Why is this the obligation of bookstores, though? Say you heard of a trendy lipstick, one not carried locally — do you demand your local CVS special order it for you, have a clerk call you when it gets in, hold it for 2 weeks so you have plenty of time to pick it up — and not charge you anything if you change your mind, or forget and never pick it up, or find it cheaper online somewhere so there’s no need to buy it?
[back to food analogies]
Sizzle vs. Steak
One can order certain cuts of beef online, frozen, [I hate to advertise for a specific company; a search will pull up multiple vendors, or at least the one very large vendor] and for as little as $4 a meal, you can get steaks and burgers delivered to your home (packed in dry ice) ready for skillet or grill. Going to a warehouse-style store (CostCo or similar) you can likely get the same cuts at a discount, as little as $2 a pound, if you are willing to do a little work yourself in re-portioning and re-packaging and freezing.
Even at the local supermarket, by watching sales, I can manage $6-a-steak for a large hunk-of-entree (boneless rib-eyes are a personal fav) that can be cooked at home with minimal fuss.
And of course: That same hunk of meat will cost you $16 minimum, and maybe $20 or $25 at a fine dining establishment.
Same cow. Same meat. Same cut. $25. “But it costs me $6 at the grocery store! and hell, I bet I could go on the internet and mail-order that same steak for $2!”
One could argue that at the steak house, you’re paying for the sizzle, not the steak. The presentation, the expert preparation, the ideal sides, the experience. One certainly can order a steak online, sitting at home, and with some work, yes, indeed, it’s the same steak. But that $25 buys you more, a lot more (subjectively), when you get the same steak at a steak house.
What does this have to do with books?
[besides an obvious parallel price point, he asked, knowingly]
When you buy a hardcover book, in its first week of release, even discounted [as they inevitably are these days] you’re still paying $20 for what-is-eventually-going-to-be-a-$7-book for what, exactly?
Well, obviously, it’s a physical book and you get to read it. As a physical book, others see you reading it. You can lend it out when you’re done, or leave it on the coffee table so your guests can see what you’re reading. When you put it on your shelf at home, visitors to your home can see that you didn’t wait for the paperback: you like this author enough to buy it in hardcover.
You spent $20 for the sizzle, not the steak.
In an age where the ebook releases simultaneously with the hardcover and immediately undercuts it on price (whether we’re talking $16 or $14 or $9.99) — the portion of the market that buys New-York-Times-Bestselling-Author hardcovers on the day of release is still the same. By analogy: the market for $25 steaks is not the same as the market for raw meat. There will always be a opening in whatever market for the “sizzle”.
And all other things being equal, why would someone buy a book at a bookstore when there is an e-book version available for less? That’s a philosophical question.
Why would someone buy a CD for $12.99 when the same music is available from iTunes for $8.99? Do they not use iTunes? Do they not like iTunes? Do they just want a physical copy that they own without the digital nonsense?
Maybe they like the flexibility of a book, not tied to a device. Maybe they’re my grandma, and they don’t have the requisite device.
Maybe they come to the bookstore because we stock books — a great big beautiful book buffet — and the fact that such a place exists in their neighborhood is reason enough to go there, and shop there, and yes, buy the so-called “overpriced” version.
There are a whole lot of folks (up to and including all of Wall Street) willing to conflate mail-order with retail – to the detriment of both. Analysts and journalists who aren’t really readers themselves (I can tell) are more than willing to dump all over book retail, present their own opinions as market realities, and declare the bookstore dead before they themselves even bother to walk into one.
That would be a U.S., 2012 number; and even after we exclude the massive K-12 & Collegiate text book business, BookStats calculates the entire U.S. trade book industry (i.e. what you’re buying) is still $15 Billion, up 6.9 percent from 2011. [BookStats estimate for 2012 quoted here]
In parallel, the US Census Bureau reported that Bookstore Retail for 2012 was $13.4B of that total. Obviously there are differences between the two numbers — total Book Retail ≠ Publisher Revenue, not least because there are multiple sales channels, all the annoying non-book product lines invading most bookstores, and of course the fact that publishers sell to retailers wholesale at a discount. These are the numbers, though — and I’ll remind you the Census retail number is for *stores* and does not include online sales.
2012 U.S./Canada Box Office was $10.8 Billion, up 6% compared to $10.2 billion in 2011 [Source: MPAA, pdf]
2012 Consumer Spending on Home Entertainment (DVDs, Blu-rays, and Video On Demand) was $18 Billion [Source: Digital Entertainment Group, pdf]
2012 Television Production (television programming only, excluding broadcast and cable networks, and Movie production) was a $36B business [source: IBISWorld]
And lastly: In 2012, the “traditional video game market” (excluding mobile) was $58 Billion [Source: Reuters]
(also, HA! ‘traditional’ video games! next we’ll be hearing about “artisanal locally-sourced small-batch” video games)
Of course, it is easy to conflate the manufacturing, distribution, and ‘retail’ segments in any content business — the dollars spent in aggregate are no guarantee for anyone of future business, or proof of any particular business model. As much as some people may miss the old Tower Records storefronts (“Tower Records” still exists as a bad website, and as a licensed brand outside the US) the old record store model was not sustainable in a new world of MP3s and streaming digital.
[I might argue that point… but that’d be a different essay]
Anyway, the point we’re starting with is that Billions are made in the manufacture and sales of books — and while $10 Billion can be tucked into Amazon’s revenues and all but disappear, Books Are Not Amazon. Or Dead… Yet… or ever… I hope.
Mail order got a big boost in the 1880s when Sears, Roebuck, & Co. leveraged the network [a rail network] to speed up both ordering and fulfillment by an order of magnitude. Amazon is a big damn company, books are a minor sideline these days — but that fraction of Amazon that sells stuff is the heir of Sears & Roebuck, an obvious evolution and not something that is new or revolutionary.
Books by mail became a thing (a massive, popular thing) 70 years before Amazon with the Book of the Month Club: After a couple of false starts, the now-iconic Book of the Month Club was founded in 1926 and by the 40s was (arguably) the nation’s largest bookseller. [I don’t have 1940s book retail numbers in front of me at the moment, hence the qualifier, but in 1949 after a little over 20 years in business, the BotMC shipped it’s 100 Millionth book.]
“Although BOMC’s membership continued to grow in the first half of the 1960s, the company’s sales began to stagnate as the impact of increased numbers of retail book stores — many of which sold bestsellers at discount prices — was felt. Another important factor was the rise of paperback books. The proliferation of book clubs and the resulting competition was yet another cause for the slump. Between 1962 and 1963, BOMC saw its sales slip from $19.8 million to $17.6 million. To compensate for the shrinking number of books purchased by members, the company spent more money on promotion to beef up membership.”
Widespread discounting of bestsellers, the popularity of a new format, and newly expanded competing sales channels led to flat growth of an established book seller? You don’t say.
“In the early 1980s the company determined that there was money to be made by publishing books on its own or in cooperation with publishers, rather than only buying the rights from publishers to sell BOMC editions of their books. In 1982 BOMC established its own original publishing division. Its first publishing projects were reprints of such classics as All the King’s Men by Robert Penn Warren (published by BOMC in 1982), William Shirer’s Berlin Diary (published in 1987), and the Revised English Bible (published in 1989). The publishing division then moved on to anthologies and multivolume sets.”
The New York Times reporting in 2001:
“Since the 1980’s, however, the club system has been under duress. National bookstore chains made books more widely available, alleviating the need for mail-order services. Then online retailers began competing to sell books even to the truly isolated or lazy. As a handful of perennial blockbuster authors came to dominate best-seller lists, the club’s management began paying multimillion-dollar contracts for the rights to several of an author’s future books at once.
“Even the idea of a single ‘book of the month’ was becoming obsolete. Computerized databases enabled the club’s managers to tailor the ‘main selection’ each month to the previous buying habits of individual members. A member who responded well to nonfiction would see a steady diet of it as the club’s main selection, while a neighbor might receive only novels.”[/blockquote]
Goodness, using computerized inventory and sales history data to individually tailor recommendations.
“There is one kind of book club which could have a bright future: specialist clubs that harness the internet. Two successful new clubs in recent years have been Bertelsmann’s Black Expressions in America, aimed at black women, and Mosaico, a Spanish-language club. For specialist titles, bookstores cannot compete for range with a book club, and the internet lacks the personal touch of a trusted team of editors.” “Book clubs: The final chapter? The future looks bleak for an archaic corner of old media” : The Economist, 15 May 2008
If someone at The Book of the Month Club had thought to engage their readers/customers on a Goodreads level, the past two decades in book retail would have unfolded very differently. If Goodreads had bought the BotMC in 2008, instead of being acquired themselves by Amazon… well, what-if games are hardly productive and do little to change conditions on the ground.
However: History (in retail or otherwise) is hardly as inevitable as it seems, and the future is more fluid than most realize.
The past 20 years of Books is not the story of The Big Box Bookstore, nor was it all about The Rise of Online Empires.
The success of both the nationwide chains and of Amazon are both aspects of a single phenomenon: The past 20 years of bookselling are best seen as a change in customer demand for books.
Before the web — and web browsers, the now-invisible but indispensable invention — There was no “online”. At least not in the ways we casually assume today…
The conversation began with pulps in the 30s and Zines in the 60s. As in so many other aspects of our modern life, technology took these modest print efforts and dialed it up to 11: more reviews, more posted reading lists, more fan-to-fan conversation, discussion, flame wars, and FAQs: more fan nexus — hell, being able to even find other fans who like what you do — this “book discovery” that was about Individual Enthusiasm and Consistent Effort and Engagement — that had nothing to do with Amazon and everything to do with dial-up BBS, CompuServe forums, Usenet groups, Listserv mailing lists, and all the other proto-Reddits that your Grandma used a long long time before you, youngling, fired up your first Game Boy for the pokemons.
In 20 years, discovery hasn’t changed: There is nothing Amazon’s user reviews add to the process that wasn’t already there in the letters column of a fan zine. It is all about the dialog, even when (these days) the dialog is with a machine. “What’s Hot, What’s New?”
The discovery process is the same today as it might have been in 1989. What has changed is the volume of information available to readers. Once, you had the NYT Book Review, the New York Review of Books, a handful of others… now a world of reviews are a Google search away.
The increase in information about books led to a subsequent demand for books: You have no idea how much you want something if haven’t heard of it yet. There has also been an explosion of “broadcast channels” discussing and recommending books; the biggest of these was Oprah (is Oprah? How’s her book club v2.0 working out) but what other individual sites lack in stature, they more than make up for in numbers: 1000s of people with blogs (or tumblrs, or pinterest boards) (or even maybe facebook – I’m not on facebook so I don’t know about book culture there) — tens of thousands of mini-channels, and at least a dozen ‘major’ sites, all discussing books.
The change in customer demand is often referred to today as “The Long Tail”, a term coined (and/or repurposed to describe this phenomenon) by Chris Anderson — don’t get too bogged down in the Wikipedia entry on this one: that was hijacked by some math nerds a few years back — the basics of the long tail is that when customers can find obscure books they are also more likely to buy them. The immediate corollary is that someone, somewhere will buy even the most obscure book but only if they know about it — undiscovered is the same, functionally, as out of print.
Many commentators describe The Long Tail as uniquely an internet phenomenon, something that only came about with the rise of internet retailers. I politely disagree, and if you would care to know why: I invite you to get a job at a big box bookstore. Come work for me for a month. Answer the phones. Deal with the shopping public.
The change in customer demand does not begin and end with a web site and is not limited to online sales. When someone wants a book, they will seek it out from any retailer, and their buying decision is affected not by the discovery process but rather the same mix of price and convenience that backs all of their sales decisions. Say you just heard about the Cotton Malone thriller series from author Steve Berry – you may not have heard of Steve before (he’s a NYT bestselling author now, but also a bit of a b-lister) (sorry, Steve) — but via some mechanism on the internet, like a by-the-way-comment in a tangentially related blog post you suddenly are aware of The Templar Legacy (isbn 9780345476159) and you think, “Hey, maybe I should read that.”
So you pick up the phone, call your local bookstore – they have it, and you buy it over the weekend. You’re out running errands anyway on Saturday, stopping by the bookstore is easy. Convenience is a matter of personal perspective: maybe ordering online is easier, But There Is At Least One Bookstore Chain With 700+ Stores (still out there in July of 2013, even, not dead yet) and for many people it’s easier to buy in stores.
…Nobody is going to a book store anymore, obviously.
When we talk about bookselling, we throw around figures in the billions – in the arena of business news, this isn’t enough to register with observers.
We can talk about monthly sales in the hundreds of millions. I can point out that with reported annual book store sales of $13 Billion, that means bookstores bank more than one billion dollars every month — on average, anyway ;) — and I’ll remind you a third time that the US Census reporting on book stores explicitly excludes online sales channels.
An industry that is dying, obviously.
For those who might argue otherwise: That bookselling is in decline, that retail storefronts can in no way compete with the efficiencies of online retailers, or even that no one wants a bookstore any more. Well, that is another topic.
[update 14 July 2013, 5:00pm EST : some sentences were added to clarify my thoughts on how the explosion of information on the internet is what expanded customer demand.]
“Number one: Amazon is, by far, the most book-industry-focused company that is actually active in endeavors much larger than the book business. Barnes & Noble and Ingram are just as focused, but they really don’t go beyond the book business. Google and Apple are, like Amazon, leveraging their book activities into other areas and vice-versa, but they have nowhere near the presence in the book business that Amazon does. (Kobo, which is focused on the book business but has just been bought by a much larger Internet retailer, is still a bit of a wild card in this regard.)”
“Amazon’s acquisition of Goodreads is a textbook example of how modern Internet monopolies can be built,” said Scott Turow, Authors Guild president. “The key is to eliminate or absorb competitors before they pose a serious threat. With its 16 million subscribers, Goodreads could easily have become a competing on-line bookseller, or played a role in directing buyers to a site other than Amazon. Instead, Amazon has scuttled that potential and also squelched what was fast becoming the go-to venue for on-line reviews, attracting far more attention than Amazon for those seeking independent assessment and discussion of books. As those in advertising have long known, the key to driving sales is controlling information.”
The situation wasn’t always this bleak though – in fact it crept up on us slowly. Fair warning: those of you who love bookstores may get a little depressed reading this.
“In 1994 Americans bought $19 billion worth of books. Barnes & Noble and the Borders Group had by then captured a quarter of the market, with independent stores struggling to make up just over another fifth and a skein of book clubs, supermarkets and other outlets accounting for the rest. That same year, 513 million individual books were sold, and seventeen bestsellers each sold more than 1 million copies. Bezos knew that two national distributors, Ingram Book Group and Baker & Taylor, had warehouses holding about 400,000 titles and in the late 1980s had begun converting their inventory list from microfiche to a digital format accessible by computer.”
The Wasserman piece linked above is a long read, but a good one. Please note that in 1994, if the figures/fractions quoted above are correct, then in the year Amazon launched 55% of the total book market was selling outside of bookstores! – we have short memories, it seems, and a long list of assumptions to work through when it comes to book retail. If Amazon were merely displacing book-of-the-month clubs and hoovering up the book retail that (in the 1980s) was happening in grocery stores and newsstands (newsstands! remember those?) then their stratospheric growth has a ready explanation that doesn’t involve the death of book stores.
In 1994 the big-box-bookstores were just getting started: Borders & Waldenbooks were still owned by K-Mart (yes) and hadn’t been spun-off yet, that division consisted of 1,102 mall stores and just 75 Big Boxes; B&N had 268 stores alongside 698 (B. Dalton) mall locations.
(Remember mall bookstores? I used to buy books there every weekend. The local mall had two bookstores in it. Good times, good times.)
“Back in 1994, Jeff Bezos was a young senior vice president on the rise at a thriving Wall Street hedge fund. But when the explosive growth of the World Wide Web caught his eye, he saw an even bigger opportunity: online commerce. Two years later Bezos, CEO of the Internet bookstore Amazon.com, is one of a crew of young entrepreneurs using cyberspace technology to steal real-world customers from traditional businesses with strong consumer and industrial franchises.”
“There are successful people who are just lucky in their investments and successful people who would have done well no matter what. How do you distinguish the lucky investors from the Warren Buffetts and the David Shaws? It’s mathematically impossible to tell the two apart. You have to do it by understanding the people and their strategies and blah, blah, blah. But the longer the period of time they are successful, the easier it is to differentiate: The number of people who can be lucky for a year is large; the number of people who can be lucky for five years is smaller, but it’s still pretty big. The number of people who can be lucky for 30 years, like Warren Buffett, is really small.”
How much of a role has luck played in Amazon’s trajectory?
“Huge. Huge. I believe that all startup companies need a huge amount of luck.”
What did the bookstore ecosystem look like by 1998?
Borders, 1998 [source]
“At March 21, 1999, the Company operated 256 superstores under the Borders name, including one in Singapore, one in Australia, and three in the United Kingdom, 885 mall-based and other bookstores primarily under the Waldenbooks name and 26 bookstores under the Books etc. name in the United Kingdom. The Company also operates an Internet commerce site under the name Borders.com. Borders is one of the nation’s largest specialty coffee retailers with cafe operations in nearly all of its superstores. The Company had consolidated net sales of approximately $2.6 billion in 1998 and $2.3 billion in 1997.”
Borders had yet to cede its website operations to Amazon (tragic, that, in hindsight) and was busy expanding internationally. Note that the mall locations are already starting to close (885, down from 1,102 above)
B&N, 1998 [source, pdf]
“Barnes & Noble, Inc. (Barnes & Noble or the Company), the world’s largest bookseller(*), as of January 30, 1999 operated 1,009 bookstores. Of these 1,009 stores, 520 operate under the Barnes & Noble Booksellers, Bookstop and Bookstar trade names, (50 of which were opened in fiscal 1998), and 489 operate under the B. Dalton Booksellers, Doubleday Book Shops and Scribner’s Bookstore trade names. Through its fifty percent interest in barnesandnoble.com llc (barnesandnoble.com), the Company is also the world’s largest bookseller on the World Wide Web (http://www.barnesandnoble.com) and the exclusive bookseller on America Online (keyword: bn). Barnes & Noble publishes books under its own imprint for exclusive sale through its retail stores, mail-order catalogs and barnesandnoble.com. During fiscal 1998, the Company’s share of the consumer book market was approximately 15%. … The Company’s sales increased 7.5% during fiscal 1998 to $3.006 billion from $2.797 billion during fiscal 1997. The Company’s retail business reported an operating profit of $188.6 million, up 16.0% from last year’s operating profit of $162.7 million.”
that asterisk is “* Based upon information reported in trade publications and public filings.” The claim to the title was a “thing” at the time. We can also see a different mix than Borders: More big boxes and a lot more brands (Bookstop, Bookstar, Doubleday, Scribner’s) showing how B&N was growing via acquisitions, not just new store openings.
Amazon, 1998 [source, pdf]
$609 Million in sales in 1998.
$609 Million, Compared to the $2.6 Billion for Borders and $3 Billion scored by B&N. Oh, and that was up from $147 Million in 1997 (and just $15 million in 1996).
“I have seen the future of Amazon.com, and it looks like Wal-Mart. This may come as a surprise to those who are accustomed to thinking of Amazon.com as a bookstore. After all, books are what the company is known for, and Amazon.com promotes itself as ‘Earth’s biggest bookstore.’ But books are just the tip of the iceberg. It’s widely known that founder and CEO Jeff Bezos, when he was starting out, made a list of products that would be well-suited to Web sales. Books topped that list — but they’re clearly not the only things on it. In fact, Amazon.com’s recent acquisition of Junglee Corp. (announced as this column went to press) confirms the bookseller’s intention of getting into a broader retail market: Junglee makes software agents that facilitate online shopping. Why do you think Bezos chose a generic name like ‘Amazon’ anyhow? It’s sheer size that Bezos cares about, not just books.”
Also in 1998: Apple’s big product was the iMac (the iPod didn’t follow until 2001). Google got started as a company in September of 1998, following the domain name registration of google.com in 1997, and its origins as a research project of a couple of grad students in 1996.
Lawsuits and acquisitions aren’t new:
“In what one legal expert characterized as a victory for Amazon.com and Drugstore.com, the online retailers have settled their legal dispute with Wal-Mart without having to abide by any court injunctions. The retail giant had sued the two online ventures, accusing them of recruiting Wal-Mart execs in order to steal trade secrets.”
“The move also suggests that Amazon.com has decided against acquiring Baker & Taylor of Charlotte, N.C., the No. 2 book distributor. Interest in Baker & Taylor rose after Amazon’s main competitor in on-line book sales, Barnes & Noble, said in November that it would buy the biggest book distributor, Ingram Book Group of Nashville, for $600 million.” Amazon.com Is Adding A Warehouse : David Cay Johnston, 8 January 1999, The New York Times
note: the B&N buyout of Ingram in 1999 obviously didn’t go through. This is a reminder, though, of what-might-have-been. more background:
“For the past ten years, Baker & Taylor in relation to Ingram has looked remarkably similar to Borders in relation to Barnes & Noble. Ingram and B&N are family-owned companies (although B&N has the very significant complication of being publicly traded which, with Ron Burkle as a publicly disaffected shareholder, has been well-reported lately) while B&T and Borders are highly leveraged and controlled by private equity. Ingram and B&N with their long-view management styles have made significant infrastructure investments that the always-looking-for-an-exit B&T and Borders ownerships haven’t matched”
“Ingram, the book distributor that Barnes & Noble acquired last week, supplies Amazon.com, a competing online bookseller, with nearly 60 percent of its books, a regulatory filing disclosed today.
“Barnes & Noble and Ingram have said that the merger will not affect Ingram’s relationships with its customers, including Amazon. But in Amazon’s quarterly 10-Q filing with the Securities and Exchange Commission, the company notes that it ‘does not have long-term contracts or arrangements with most of its vendors guaranteeing the availability of merchandise,’ and that ‘there can be no assurance that the company’s current vendors will continue to sell merchandise to the company on current terms, or that the company will be able to establish new or extend current vendor relationships.’”
[/blockquote] Ingram dominates Amazon supply : Jeff Pelline, 13 November 1998, c|net News
Let’s go through that again: In November of 1998, B&N had their own website, 15% of the book market, was looking to buy Ingram — the company supplying Amazon with more than half of their inventory at that point — and was being run by a driven, ruthless bastard whose modus operandi was buying up companies to either consolidate operations or just get bigger. Can I remind you that at that point (1999) Riggio had also bought Babbages, Software Etc., and GameStop and had built up this sideline into a chain of 500+ stores?
This raised all-kinds of antitrust flags, apparently, so it’s no wonder the B&N/Ingram merger didn’t go through. I think when the deal went sour, Riggio took a step back to reappraise strategy. GameStop was spun-off into its own company. B&N built a massive warehouse of their own, and took up in-house distribution and logistics like a new religion. This quiet and behind-the-scenes stuff isn’t as flashy as mergers or new store openings, but the efficiences B&N built over the 2000s are part of the reason they’re still open today, after 4 years of recession and shrinking consumer demand.
Amazon borrowed a billion dollars (no exaggeration: they were carrying $1.4 Billion in debt by 1999) to build up the infrastructure they needed following this close call — 15 years ago the market changed, more distribution and warehousing was brought in-house and verticals were built. You might also be forgiven if you pointed to 1999 as the year Amazon changed strategic focus: from building a website and sales portal to building a business.
I find it amazing that in 1999, the owner of a physical, brick-and-mortar bookstore chain was precluded from purchasing a book distributor (even when neither was the only player in their individual markets, and on the cusp of market changes already in motion and being trumpeted by both online-sales advocates and voices in the business press) — and the same sort of monopoly-building in 2012 is not just condoned by the state, but is being actively supported so long as some Justice Department lawyer can buy his ebooks for $9.99 instead of $14.
It is said Amazon has 30% of physical book sales and 60-70% of all e-book sales. 15 years ago, Barnes & Noble was blocked on anti-trust grounds when they had only 15% of the book market. I find this fascinating.
Ingram hasn’t been standing still:
“Ingram has long been thought of as the book industry’s quintessential middleman, distributing publishers’ books and other products to thousands of accounts. But over the past five to 10 years, the company has invested tens of millions of dollars to become what Skip Prichard, president and CEO of the Ingram Content Group, called the ‘centerspoke’ of an industry in transition. To meet its mission statement of ‘helping content reach its destination,’ Ingram’s strategy is to offer publishers whatever services they need to operate more efficiently.”
[I still can’t help but daydream a little bit about the B&N-Ingram-hookup, what might have been. Damn.]
Ingram is probably the only major player who really could give Amazon a run for its money in the CreateSpace/Kindle Direct/alternative-and-self-publishing market — but Ingram isn’t pushing its luck or its advantage yet. In fact, it seems that Ingram is willing to work with established market players, quietly becoming everyone’s back end: “print shop to the world”, a corporate-scale Kinko’s.
“I wish we could keep bookstores for cultural reasons, but they are businesses after all. Even if Barnes & Noble (NYSE: BKS) stays in business, there is no guarantee that the physical stores will remain.”
“This value—this unique something, that physical bookstores provide—may not be sufficient in itself to support a viable business model for more than a handful of a bricks-and-mortar business (as many people believe). But it may provide the key to a online retail experience–one that doesn’t compete with Amazon but provides a real alternative.”
“That’s because Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way.”
Dear Motley Fool bloggers, other tech press, pundits, (and the occasional customer in my store),
Please stop throwing Borders in my face as “proof” that physical bookstores are already dead, and are just staggering around a bit (fatally wounded) before the Final Fall.
Do your research:
Borders Group was formed when K-Mart (yes, let me stress that again: K-Mart) bought the family-owned Borders chain and forcibly merged it with Waldenbooks, instituting an instant culture-clash between the two divisions that in many ways persisted right up until the end. The company most of us were familiar with as “Borders” was spun off in an IPO in 1995; the IPO netted $567 Million but K-Mart still booked a loss of $185 Million, “the difference between what it paid for and invested in the Borders chains and what it was getting for them” [NYT, 26 May 1995]. After a wobbly start, BGP went through 6 CEOs in 10 years, over-extended (including internationally) by taking on debt, and basically surfed the big-box wave instead of innovating or making smart decisions: Things were going fine as long as the retail business was growing, but Borders wasn’t in a position to survive the great recession, let alone compete after. Borders’ last-ditch “digital initiative” was an investment in an ongoing (Canadian) operation, Kobo: not an organically developed add-on for their business, and not ready to go head-to-head in an e-reader (let alone tablet) war.
Borders went down. It was a sort of close thing, there at the end, but without a deep-pocketed buyer or a concession from the publishers (who would’ve hardly been able to absorb it) Borders was doomed.
Borders is hardly proof that the bookstore business is doomed, though. Every business segment has businesses that are either run poorly, or (being generous) at least being run sub-optimally. And books are different: you can’t just hire a “retail” guy with experience in grocery stores and expect him to know anything about books. (I think it’s telling that the best qualified CEO Borders ever hired, Philip M. Pfeffer, former CEO of Random House and a former executive at Ingram, resigned after only 5 months. That was back in 1999.)
There is a long history of delivering books – specific titles requested and delivered on demand right to the customer. There was The Book of the Month Club , B&N’s mail-order catalog [acquired in 1979 along with Marboro Books], and even Benjamin Franklin’s book catalog in 1744 – nothing new about ordering or delivering books.
Amazon had three things going for it in the early days (four, if you count the drive and ambition of Bezos): Books already had a computerized database (since 1986 in fact), Books already had a nation-wide distribution network built to service bookstores (Ingram et al., op. cit.), and one of those book warehouses (one of the largest) was just six hours away in Oregon.
Amazon’s twist on book delivery is the cash conversion cycle: they sell you a book, then they buy it and ship it, then they charge your card, and only at some later date do they lazily get around to paying their source for the book.
[standard payment terms on books used to be 90 days – plenty of time to deliver book, claim payment, and then sit on that cash or park it in a short-term CD.]
Amazon didn’t even need a lot of inventory to launch (they used a garage) because of this neat trick — and of course I know they do things differently now, with distribution centers all over the place and same-day delivery in some markets (integrated verticals are more efficient, and cost effective) — but this is how they built an empire on nothing. Well, not nothing nothing, I mean: Bezos was a former investment banker (presumably not worrying about rent or groceries) and was able to tap his Dad for a quarter million. (well, that’s not quite true: $100,000 came from his dad, the other $145,000 came from his father’s trust fund — the more I dig into this the more it spikes my blood pressure)
So Amazon was a truly Great idea (though not 100% original) and had some really great implementation — but the ‘great idea’ wasn’t the website or the back-end software or servers, or even the product.
Amazon succeeded because of timing, luck, starting with “a” (a big deal in the pre-Google Yahoo Directory days), and most importantly: because of creative accounting. Amazon was not launched by a genius and engineeer who invented something amazing — Amazon was not a new iteration of an old service, computer-aided and internet-enabled, to add value to an older sales model — Amazon was not the obvious and organic outreach of a bookseller determined to reach all readers, no matter how isolated —
Amazon was the brainchild of a banker, and exists to make money. (Extra points go to Bezos for figuring out how to make money without returning any to his shareholders.)
3. Physical Bookstores.
Many point to the expense of maintaining a nation-wide chain of actual bookstores as the albatros hanging around Barnes & Noble’s neck — and to a lesser extent, also a handicap of all bookstores, but B&N as the market leader and biggest target gets most of the flack for this.
My personal experience is only as one physical location — a fair-sized bookstore at the center of a top 30 market — but only the one store: On a random Tuesday, we’ll have at least 20 customers in the store at all times, starting at 10am, averaging about 30 and peaking at 50-60 during the lunch and 5-6pm rushes. On a Tuesday. We’ll take between 20 and 60 phone calls an hour — these interactions are typically short, but there are times when all 4 phone lines are ringing at once. Oh, you might not have realized: we have 4 phone lines, and a daily call volume that averages around 500. Some of those calls are, “So where exactly are you located?” or “How late are you open?” but even those calls support eventual sales, and most phone calls are a customer looking for a particular book. They may even have found the book online – but they take the time to find our phone number and call us anyway. At any given time, we’ll have two to three hundred books on hold, waiting for customer pickup: some of these are special orders but about half are books that we already had on the shelf and pulled the same day.
In fact: If I told you I had a startup that engaged at least 1000 users every day, that provided a free product but had a built in solution for add-on sales, that was easily scalable past my current single-site implementation, and that I was making $1,000,000 a year off of $5,000,000 in gross receipts, that might sound like decent business. If I told you the costs (physical plant, payroll, inventory) were both fixed and known, and out primary struggle was figuring out how to monetize all the traffic using our site for free, you might be forgiven for thinking I was talking about a web site.
20% is a decent margin, and close to retail average (Wal-Mart is at 22%, if I recall correctly). I can’t divulge acutal numbers; I might mention that I know at least one bookstore that does more than $5 Million a year, even in a recession. And I’m dead serious: we need to figure out how to “monetize our traffic” past selling them some coffee.
I have to employ multiple booksellers to work a collective 20 hours every night just to reshelve books, clean up after our beloved, much-valued patrons and reset the whole store to ‘normal’ — or at least normal enough to do business. That doesn’t include the amount I pay for janitorial services (horror stories about publicly accessable bathrooms is its own post) or the payroll we use to sort and shelve new product: it takes an-average-of-five booksellers working 4-hours-apiece every night just to *recover* the store.
Call this the “social cost” of running a bookstore. The social cost would also include – damaged product (the victims of both spilled coffee and free-range toddlers) – shop wear (books are physical objects subject to the Second Law of Thermodynamics) – outright theft (the bane of all physical retailers), and – being vulnerable to actual social interactions with customers, and having to become the de facto referee or cop for all the unanticipated interactions between customers
Payroll costs aside (I’d estimate this social cost at $90,000 per year, per store) there is also the question of customer experience: If you left early because a smelly homeless person was camped out in the sci-fi corner of your favorite bookstore, how will that affect your decision to return? Do you return?
First assertion – If digital-is-all, and cheaper besides, and kills all physical formats: why do people still go to concerts? Why do they buy vinyl?
so does the ‘physical’ version offer something not found in digital transcriptions? Please at least acknowledge the persistance of both concerts and vinyl in what is, in 2013, a completely digital music market in any argument you’re about to throw at me about e- vs. physical books.
Second assertion: ebooks are merely, merely, the New Pulp.
…and that’s fantastic — I’ll explain — but ebooks are not the death-knell of physical books nor the publishers who print them, nor of the bookstores who sell them.
“Paperbacks were and weren’t radical:
“Yes, they were cheaper. While initially introduced as value editions of the classics and bestsellers, soon the lower costs of manufacture induced some publishers to create new works (and whole genres) to take advantage of the format. Stories which might never have seen print due to either ‘lurid’ content or lack of a ‘literary’ appeal suddenly found a new home, and mountains of books were printed to feed the pulp market. Some of these were reprints of material previously available in fiction anthology magazines — a format that is, sadly, mostly extinct — the magazines fed a fan base that later bought the books, and the magazines were a crucible that forged not just the fans of the works but also their creators. Mystery, Romance, and Sci-fi all exist today as genres — popular genres that support their own hardcover releases — because of the decades of pulps… but that would be another essay.
“A paperback book has a floppy cover, but was still recognizable as a book. If one weren’t hung up on the literary ‘value’ and ‘merit’ of a Book-as-object, then the opportunity to buy one at a cheaper price because you want to, you know, enjoy it is a no-brainer. Here was the first movement toward books as popular entertainment, and also provided a way ‘in’, to merge centuries of Pop Culture Trash back into the literary tradition.
“And that was a good thing.
“Shakespeare was once pop entertainment for the masses — not a printed story but one meant to be performed before a crowd, with ribald (read: sexy & suggestive) jokes and bloodshed and body counts and important commentaries on class, authority, race, religion, and — if one can adjust slightly to the Elizabethan world view — also insightful looks into gender equity and relations.
“Nowadays it’s literature; back then it was equivalent to sweeps-week TV sensationalism.
“Later generations will cherry-pick the best of romance, mystery, and sci-fi and hold them up as Fine Literature — while either ignoring their base roots as pulp genres printed by the bushel to feed a near-insatiable market, or romanticizing their ‘common’ roots and attempting to make hay out of the fact that previous critics ignored or dismissed them.”
I wrote that in 2009, two years before 50 Shades of Grey — can I call them, or what? Also from 2009:
“The new digital methods and methodologies mean that anyone with a computer, printer, and appropriate software (the cost of core equipment and a nominal set-up fee) is now a ‘printer’ and publisher; in fact, one can publish direct to the web without dirtying a single thin slab of pressed wood pulp. The equivalent of the whole of Gutenberg’s shop will fit on my desk, and I can print copies of the bible faster.
“Where will the new ‘press’ take us?
“Ask me in 400 years.”
Let me describe one of the favorite volumes on my bookshelves: it’s a leather-bound, gilt-edge printing of all 5 Douglas Adams Hitchhiker’s Guide novels in a slightly oversize, all-in-one edition. It’s gorgeous and superfluous, and didn’t even exist until 1997. (a similar edition with only 4 novels was published in 1986.) Is this how I first encountered Douglas Adams? Hell, no: I read the first couple of books from the library, and eventually bought the set in paperback. After reading Hitchhiker’s Guide, I happened upon the Radio Scripts (in a bookstore, isbn 9780330419574) and bought and gobbled those up too. Only later did I find out about the TV show, and eventual movie, and after many years I was also able to listen to the original BBC broadcasts. Amazing, all of it. Do I need to own (or even read) the all-in-one edition, considering my exposure and familiarity with the original? Of course not.
In fact, the very existance of a leather-bound gilt-edged Hitchhiker’s ‘bible’ is part of the joke, and still makes me smile.
Fritz Leiber, Doc Smith, Philip José Farmer, Le Guin, Butler, Campbell, Wolfe, Delany, Asimov — for every author that gets a paperback reprint there are three hundred or more that were almost as good and their books will disappear sooner rather than later.
As an author you’ll get maybe two years after you publish (hardcover or paperback, doesn’t matter) and then you’re consigned to back shelves, dusty corners, and used book stores. If you aren’t putting out a new book every 9 months, you just go there faster — if you can’t keep up (or if you died for some inexcusable reason) then baring a lottery-winning-type “discovery” of your books: your whole back catalogue has probably already been pulped.
The time frame has contracted slightly over the past two decades — most authors were OK if they could manage a book every other year. That said:
The whole book business is and always has been ephemeral. Your eventual fate has always been Out-Of-Print and only your hard work (while you’re still alive) keeps you and your books from sliding into the dark depths of forgotten memory.
E-books are great — and have some built-in cost savings and are ready-built to take advantage of internet multipliers — but are still books, and will eventually suffer the same fate. Forgotten. Unsought for. The files exist, but the links and even the primary sources will succumb to bit rot and you will be just as bloody out-of-print at that point as everyone else: papyrus, parchment, vellum, rag paper, pulp paper, bits — hell, to date the most durable system is cuneifrom; write it out on clay tablets, kiln-fire them, and bury them in the desert.
The other most-durable method has been to gain fame and get everyone to repeat your words. Oddly, this is now frowned upon (“piracy”) so I, for one, am moving out west and buying a kiln.
What do millenia-old clay tablets have to do with e-books and bookstores? Everything.
There have always been three impulses of the author:
first, to be heard (publish!, find and engage the reader)
second, to be remembered (word of mouth, engage more readers, build a readership)
third, get paid (historically: very difficult)
A bard might recite in a tavern for tips or free drinks; a renaissance poet might seek out a patron; a victorian novelist might serialize a novel in installments to subscribers; a 1940s pulp writer might churn out 180-page novels as fast as the typewritter allows.
E- makes all of this “easier” in a way – but you still have to work it. It’s not enough to merely upload a file and wait — and since you’ve killed off traditional publishing [thanks, guys] and traditional bookstores [thanks, Amazon] you no longer have the option of seeking out a publisher and having them do all this hard work for you.
Paperback books—especially mass-market pulp paperbacks—expanded the availability of books, lowered prices, radically changed what was considered ‘economical’, and pushed books into new markets, new genres, new business models, and out to new readers. E-books are already doing the same. Excuse me if I’m not surprised. “It’s a whole new ball game” but from my seat: the game in 2015 is the same as it was a century past.
E-books are books. Your ability as an author (or marketer – are there e-book marketers yet? no? …give it time) is to engage readers with the hope that each engagement leads to sales. Reader engagement can take many forms: direct contact (via author signings, email, facebook, twitter), reviews (great if you have them), online reviews (not so good: most are only seen after a customer has already sought out your book, found it themselves – at best nothing happens, at worst an online review dissuades a purchase), or direct advertising: you could always pay a site (amazon or otherwise) to promote your book for you.
Man, this is hard.
If only we could set up some kind of independent marketplace, where titles could be discovered independently and judged on factors that the author and publisher has control over—-like the actual book cover and dust-jacket copy—and where similar titles are lumped together on a virtual ‘bookshelf’.
5. Aside from their size, Amazon has no “special sauce” or secret formula to online retail.
How to beat Amazon? Customer engagement, including serving niche markets — product knowledge, especially for the niche — and after-sale engagement.
Everyone buys geek/joke/novelty t-shirts off of the internet — honestly, these things are everywhere. Everyone has at least one, I have twofavorites. But I’d be willing to bet there are more Comics/PopCulture/Crapware (and copy-cat) t-shirts sold off the rack at Target than are sold on Amazon.com. So here’s a question for the Amazon-loyalists: why doesn’t Amazon sell more t-shirts? Why isn’t Amazon known for t-shirt sales and noted in the business press on how effectively they’re outselling and closing down online t-shirt sites?
[to spell it out for you: in the same way Amazon is always mentioned re: bookstores]
I suppose t-shirts are a dynamic market that requires creative inputs, is subject to unpredictable whims of the market, also requires active curation, a buck a shirt isn’t a margin worth bothering with, and there is no single “standardized” geek t-shirt: there are thousands — far from the dry, boring job of listing things for sale elsewhere and undercutting the price by 15¢.
So why doesn’t Amazon stock the cool stuff first? They have the money and resources – do they just not care?
I’m not complaining: I love ThinkGeek, Rightstuf, J-list, Threadless and the many others that make up the geeky side of internet retail. I’m just pointing out that if Amazon can kill off a bookstore: a small online retailer is not just toast, they’re an appetizing slice of toast already topped and set up on Amazon’s tapas and crudité platter for snacking.
In a way, we are lucky because Amazon is lazy, and set up for the lazy.
Amazon is easy, so easy at this point, that most don’t realize that 1. there are cheaper sources or hell, 2. there are in fact other sources. This is exactly where Amazon wanted to be, in fact: Amazon works damn hard at it. BUT: that doesn’t absolve you of being lazy. Amazon knows you’re lazy. They bank on it.
Amazon is not inevitable — “Online” isn’t inevitable either.
Let’s go back to t-shirts. Amazon sells books.
…This isn’t the non-sequitur you think it is.
Amazon sells books, and not only are books set up with unique identifiers: every book publisher buys into that database and there is an independent broker that not only maintains the database, they’re committed to ISO standards and openness so everyone, Amazon included, gets to use the ISBN database. There is a parallel standard of UPC codes and, where applicable, Amazon also uses those for their product descriptions.
Amazon fails in two particulars, however: There are a number of books (CreateSpace & Kindle titles) that have noISBN (just an Amazon ID or ASIN), and so not only can’t be ordered from other stores, they also aren’t catalogued anywhere but Amazon. For a majority of sources (not just Bowker, but libraries up to and including The Library of Congress) the book might as well not exist. The second major Amazon fail: if there isn’t a handy ISBN or UPC for an item (etsy crafts, say, or geek-oriented t-shirts) they won’t list it.
While simultaneously making it harder for other sites to list their closed-ecosystem books, Amazon refuses to list items unless they they have a barcode and conform to industry standards.
All that cool stuff on Etsy? Amazon can’t compete because they won’t list it. Kickstarter? Amazon can’t compete because they won’t list it (though Amazon does take a chunk because Kickstarter uses Amazon Payments. Bastards.) And of course there are multiple discussion threads about how to get Non-Amazon ebooks on a Kindle
Other reading and references:
“Over the past few decades there has been a lot of speculation about the demise of the American bookstore and some of it may not be entirely unfounded. As big names like Borders fall under the weight of online retailers, e-books, and electronic forms of entertainment, how can small independent bookstores hope to survive? While things aren’t great for bookstores in America today, they also aren’t quite as bad as they seem.”
“The book industry is going through changes, influenced by trends like the transition from print to digital. And it looks like no part of this industry is being influenced like bookstores. From independent bookstores to the big chains like B&N and Borders – no one seems to be immune to these changes.”
“Zipp credits the fall of Borders and the rise of the ‘buy local’ movement as the two major reasons business has improved for indies. Other advantages independent bookstores hold over their competitors include summer camps, improved websites, and physical expansions.”
“We can spare a little thought for Borders. It has a particular relevance for American small towns and suburbs that isn’t apparent in urban centres. In the latter, the chain bookstores are the impersonal monoliths that destroyed small independents by undercutting them on prices. But elsewhere, the arrival of a Borders would mean that a town was finally getting a bookstore, rather than a rack of paperbacks and Sudoku books at the supermarket. (Similarly, while Starbucks might have hurt local coffeeshops in, for example, New York, in rural America it has achieved its stated goal of creating a ‘third space’.)”
“That community support is by no means unique to Bank Square Books, and it may be the secret ingredient behind a quiet resurgence of independent bookstores, which were supposed to go the way of the stone tablet – done in first by the national chains, then Amazon, and then e-books.
“A funny thing happened on the way to the funeral.
“While beloved bookstores still close down every year, sales at independent bookstores overall are rising, established independents are expanding, and new ones are popping up from Brooklyn to Big Stone Gap, Va. Bookstore owners credit the modest increases to everything from the shuttering of Borders to the rise of the ‘buy local’ movement to a get-‘er-done outlook among the indies that would shame Larry the Cable Guy. If they have to sell cheesecake or run a summer camp to survive, add it to the to-do list.” [/blockquote]
“EBay Inc. is aiming to nearly double the active-user count on its eBay.com marketplace over the next three years, as well as the volume of payments processed by its PayPal unit. … EBay expects to report between $21.5 billion and $23.5 billion in revenue for 2015, compared with $14 billion last year.”
eBay Says It Is “Now Playing Offense” : Greg Bensinger, 28 March 2013, Wall Street Journal article teased at All Things D [owned by the same company, and of course the WSJ is behind a paywall]
I’ve made some accusations about Amazon’s mercenary sales efforts to date; I’ve linked to original sources where possible, but I might be wrong…
I’ll gladly post a retraction&correction if Amazon would care to comment: as to whether CreateSpace and/or KDP titles are in fact submitted to the Library of Congress, when they plan to acquire a block of ISBNs to accomodate KDP digital-first authors who wish to sell their wares on other platforms (or even into bookstores), when Amazon will fully participate in industry-standard systems for all their associates (after drawing so much value from these open, industry-standard systems), and whether their commitment to sales over digital publishing platforms is matched by an equal commitment to open digital formats, the public domain, and non-profit archiving efforts similar to but not limited to archive.org.