I've seen some worrying talk bandied about online lately, and so I wanted to make sure to add one voice, at least, of dissension. The idea addresses how much more expensive books are at brick-and-mortar book sellers. The assumption that follows is how much more profit they're making than the big box stores who mark theirs down 30%, or Amazon, where they're consistently less expensive.
The profit margin on selling books in a physical store is typically in the single digits of percentage. I Googled the stats yesterday, and found some solid numbers from 2008 that put Borders' profits at 1.7%, and Barnes & Noble's at 2.1%.
I don't want to devolve into a discussion about Borders' recent folding, because it's not because their profits were .4% lower than B&N's, and I did not major in business in college. I'm using those numbers only because they're what I have.
Now, for a multimillion-dollar bookseller, a few percentage points do add up. For a smaller business, though, that margin becomes the bare edge upon which each financial quarter balances to fund the next quarter. When you're working on a small scale, that money matters a lot more, and it can get eaten up pretty quickly by theft, markdowns of bestsellers in order to compete, or gambling on the wrong books to take up space on the shelves. (Whether they get it back by sending the books back is irrelevant - they're still taking up potential revenue in valuable shelf space.)
Larger sellers of books get bulk rates, though, and Amazon has the additional perk of not having to pay for retail space. They can afford to sell their books for less. The problem comes when they run out of competition. If the book they were selling at $17 is still the lowest-priced at $30 and people still buy it, what's their incentive to mark it down? This has happened in a number of big-box stores who've driven out their small-town competition; as soon as no one else is selling a thing, it goes back up in price, often marked higher than it was being sold in a small store.
I'm going to tread carefully here, because I am not saying that no one should buy anything from Amazon. I'm not saying you're wrong to buy books at chain bookstores, or that you're obligated to cross state lines to find an independent bookseller.
But, I have seen a lot of posts lately suggesting that independents deserve to go down the tubes, because their prices can't compete. I've heard a lot of callous statements to the effect that we're better off driving the more expensive places out of business, because inexpensive is all that matters.
Here is where I ask my readers with no local bookstore, much less an independent one: Would you shop at a local bookstore where you could pick up books, run your fingers over the pages, read the first chapter or two, or talk to a real person to get some reading recommendations? If it were up to you, would you rather have such a store within walking (or easy driving with ample parking) distance from where you live, with hours convenient to your schedule? Or would you rather click a few buttons to have the books delivered to your door in a few days?
Amazon and other online sellers of books do serve their purpose. I'm not going to fault anyone for not wanting to join the crowds this time of year, or for wanting to save a little money. But I would be delighted if this post could make just one reader, just one potential book buyer, think about heading down to the independent or even chain brick-and-mortar bookstore to pick up a book to help keep independent bookstores alive. I suggest you check IndieBound's store locator, if you're not sure where to find your closest independent bookstore.
In the end, I think we all love books, and we all want to keep buying them, no matter the format. I just want to keep buying mine from someone who loves them as much as I do.
(The following was edited into the post on 12/15/11)
Since I've made this post, there have been a few other views that I wanted to make sure I made note of. Richard Russo wrote an op-ed in the New York Times recently criticizing Amazon's business practices and discussing the roles of independent bookstores in helping to form a writer's career, which is a point I didn't touch on. In response, Slate published a pro-Amazon post that waters it down to price. Today, I came across this blog post by Nathan Bransford that proposes independent booksellers and Amazon coexist. Many, many commenters seemed to agree with the Slate piece, which worries me.
Also today, Richard Russo wrote a response to the Slate piece that, I think, addresses the point nicely.