NORTHERN CALIFORNIA INDEPENDENT BOOKSELLERS ASSOCIATION

HOLT UNCENSORED #109
by Pat Holt

Friday, November 19, 1999:

IT'S GOING TO BE A BONKERS XMAS

LETTERS

IT'S GOING TO BE A BONKERS XMAS

I have to admit to feeling a distinct chill whenever another happy journalist describes one of Amazon.com's giant new high-tech distribution centers.

I keep thinking about the Jackie Gleason skit where the sad but innocent lonely character gets a job on an assembly line in an automated bakery.

The job, as explained by the supervisor, is very simple. First a light flashes as the conveyor belt starts moving. When the newly frosted cake crosses LINE A, Gleason's character must go to the shelf behind him, grab an aerosol can of whipping cream and spray a perfect circle of whipped cream on the top of the cake, then return the can to the shelf.

When the cake passes LINE B, he then extracts a dish of nuts from the next shelf, sprinkles 10 to 12 in the middle of the whipped cream circle and returns the dish to the shelf. At LINE C he retrieves a bowl of maraschino cherries from the shelf and drops one into the center of the nuts and whipped cream.

Finally, as the cake crosses Line D, he grabs a bakery box from another shelf to catch the cake as it rolls off the end of the conveyor belt, then places cake and box on the ready-for-sale counter at the far end of the room.

Of course, all his tasks work perfectly until the assembly line begins to speed up. Now Jackie's character races around spraying whipped cream all over himself and the assembly line, throwing nuts wildly at the audience and ramming fistfuls of maraschino cherries right through the frosting.

After he misses several cakes just at the moment they topple off the belt, he starts cramming two and three cakes into a box and hiding them under counters until - voila! - the shocked supervisor returns and fires Jackie on the spot.

The assembly-line routine grew popular with television shows of the 1950s - the classic, of course, was Lucy and Ethel in the Candy Factory - and its message became tried and predictable: However costly or faulty, mass production works; assembly lines are here to stay; people matter, but technology always wins.

So here comes Amazon.com 40 years later with its massive distribution centers, and don't think there's not a bit of business from the old Jackie Gleason skit lurking in the shadows.

Fortune magazine writer Katrina Brooker visited the 580,000-square-foot Amazon.com warehouse in Fernley, Nevada, and was certainly impressed by its sophisticated technology and huge size.

She describes an elaborate network of conveyor belts and cubbyholes all waiting for you, the Amazon.com customer, to hit that "buy it now" button and get your order filled.

The big "first" at this warehouse is its ability to "send out merchandise item by item to individual customers," Brooker reports. So as the loaded-up conveyor belt approaches the central area of cubbyholes called Pick Delight, it "automatically ejects the items you ordered as it passes your cubby," Brooker writes.

One senses that the use of the word "cubby" in a building the size of 40 football fields is not an accident.

Like a fan cheering from the sidelines, Brooker climbs a steel-mesh staircase to look down on the warehouse floor and show us how dazzling, how futuristic, even how human Amazon has made the process of automated distribution.

"This is where it all happens," she writes. "As I watch, an Ozzy Osborne CD slides into one cubby; a Panasonic camcorder goes into another; Mr. Potato Head shoots into one farther down." Oh, America! Such bounty! "A few seconds later a PalmPilot III slides in next to Mr. Potato Head, and a blue light comes on at that cubbyhole."

Ah, the blue light. Now the real humanity of the assembly line emerges. "At this signal, a young woman clad in overalls rushes over, pulls out the merchandise, and puts it in a large cardboard box, which she then sets back onto the conveyor. The box disappears down the line, headed to the station where it will be packed and shipped."

This woman, says Brooker, is one of "hundreds of people - yes, real people, earning $7.50 an hour" (and isn't that a wage Jackie Gleason's character would have coveted!) - who are readying Amazon.com for what is soon to be $10 billion a year in shipped merchandise.

I'm sure it's a great place to work and that the technology IS dazzling in its octopus way. "We're genetically pioneers," says Bezos, demonstrating his penchant for poor grammar and timely truth once again. Of course he is a pioneer, outdistancing all competitors with the best website, distribution system and Wall Street scam ever imagined. No wonder, as Brooker says, "the world (the e-commerce world, at least) is addicted to the Amazon saga."

But what is worrisome about the growth of Amazon.com is its dependency on very old-fashioned systems in which technology and money work together. The paid-for recommendations of books on Amazon.com's website herald the same books that are pushed forward on the assembly line and that Brooker spots so readily - " 'O' Is for Outlaw," Harry Potter, "Fat Busters," Clancy, etc.

Despite all the talk about using the Internet to "individualize product," Amazon.com is in the business of big numbers and big money. Yes, an unknown author or publisher can always list unknown books on Amazon.com. where they will be available for millions, or dozens, or a handful of prospective customers. There's nothing wrong with publishers doing their own promotion.

But you can't go after $10 billion a year selling toaster ovens and videocams without an ironclad techno-system that everybody has to fit into. Bezos himself can hardly visit 4000 employees, so he's installed Radio Amazon, an in-house station that plays audiocassettes of Bezos explaining the future to his workers. (What an inspirational working environment! Jackie's character would certainly perk up at nothing but Jeff, Jeff, Jeff all day.)

The upshot is that with each step toward its Happy Giant image, Amazon.com takes a step away from the world of independent ideas, of independent thinking, of independent communities, of independent workers and of independent competitors.

Oh well, it's just one company, one likes to think, but already the Amazon.com way has become the only way: Hundreds of E-commerce retailers have clamored onto the Web this holiday season hoping to grab some of that $10 billion, all of them following the Amazon model: Brand the audience (too late!), go public before earning a profit (old hat!), lose money for years (no more, sayeth the day traders).

"It's going to be a Web Christmas," Bezos likes to sing at press conferences, and maybe it will be. Or maybe it'll just be a bunch of losers jumping up and down to get our attention. Maybe people are weary of the arrogance and false bravado of no-pocket E-tailers pretending they have any money or know anything about what they're doing.

I think this is the reason nobody flinched in the book business when the American`Booksellers Association postponed BookSense.com (the shared website and database of some 1.5 million titles that many independent booksellers were going to start using November 1).

OK, BookSense.com was too late for Xmas and perhaps too low-rent to compete with Amazon.com and others online, but that's not the reason nary a hackle was raised. Denial and procrastination might have played a big role, but so did a kind of free-floating disgust at the whole greed-laden premise of E-commerce and its "consumer-centric" (another Bezos word) usury.

One day, every bookseller will find a way to get its history, its character, its knowledge, its experience and its love for books AND for customers onto the Web. But perhaps waiting until the gory aftermath of this holiday season, with its worse-than-ever delayed shipments, out-of-stock items, botched orders, overpriced shipping and inaccessible tech help, is a good idea.

For consumers, the best idea throughout this gift-giving period is to stroll into a neighborhood independent bookstore where they'll find few lines, fast service, excellent selections, no delivery charge, and best of all, a helpful and knowledgeable staff of real people.

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LETTERS

Dear Holt Uncensored,

Your readers seem to think that the issue of taxation of e-commerce turns simply on whether it is a good thing to do. But it may not even be technically possible to levy a fair tax on Internet commerce. The issue is so complex that it was the subject of a three part series in the Sunday SF Examiner, recently. Your readers should ponder the issues raised by Robert L. Sommers in "Headaches on hold: Taxing the Internet"

October 17, 1999
http://www.sfgate.com/cgi-bin/article.cgi?file=/examiner/archive/1999/10/17/ BUSINESS15036.dtl

November 07, 1999
http://www.sfgate.com/cgi-bin/article.cgi?file=/examiner/archive/1999/11/07/ SPECIAL70.dtl

November 14, 1999
http://www.sfgate.com/cgi-bin/article.cgi?file=/examiner/archive/1999/11/14/ BUSINESS3746.dtl

Sincerely,

John Kelso

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Dear Holt Uncensored:

Regarding Barnes & Noble's fines against publishers in its "Efficient Receipt Program" (#93), are these B&N people just dead set on destroying the publishing industry?

How about fining B & N for "aging" their bills, leaving publishers financially high and dry for months while their bean counters haggle over errors of a few dollars, or even a few cents. (It is not unusual for them to hold back hundreds of thousands of dollars they own through this little scheme. Those in the know say it is "usual corporate practice.")

How about fining Barnes & Noble for demanding full credit for returned books so badly hurt that publishers couldn't possibly resell them? How about fining them for careless shipping of returned books, costing publishers millions each year? How about fining them for injuring the entrepreneureal spirit of an entire culture for the sake of corporate profits?

Hal Zina Bennett, author-editor

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Dear Holt Uncensored:

As a mystery writer, I am lucky to have a network of independent mystery bookstores throughout the country. Their owners are the ones who zero in on talented new writers and handsell their books until a reading base is established. They provide a focal point for the mystery community, with frequent signing events. If the world were reduced to Borders and B and N, it would be only Grafton, Cornwell and Grisham who continued to flourish. New writers would never establish a toe hold.

I see that my part in this relationship is to keep them informed about my upcoming books, to make sure they get advance reading copies whenever possible and to show up to sign whenever they want me. We are truly symbiotic. If they fail, I fail.

Of course mystery writers are fortunate also because mystery fans are dedicated and single minded and want to belong to a mystery community. It must be harder for writers of mainstream fiction to establish a presence, but keeping independent bookstores afloat is definitely within their interests too.

Rhys Bowen
author of the Constable Evans mysteries

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Dear Holt Uncensored:

I've sent the following letter to Daniel Pinkwater, to whom National Public Radio will, I hope, forward it . . . Perhaps you'd like to send him a selection of your amazon.com columns as well?

"Dear lovely author and fellow booklover,

"We listen to you as regularly as we can, and you delight us. But imagine our distress when at the end of your broadcast we hear you take on the role of flack for Amazon.com. Haven't you ever visited an independent bookstore? Don't you know that they hand-sell authors like you, that if they don't have you in stock they can order you for the customer, who will then get you without having to pay postage? Don't you realize that bookstores are heavily involved in, and know, their communities, pay sales taxes there, put on fairs for the schools and are invariably a totally positive element in a community?

"Do you think that Jeff Bezos & company give a s--- about anyone's community, or about selling your books? And, now that they've branched out into selling almost anything, do you think they care about books & readers? I can't believe that you're naif; you know damned good and well that they care about only one thing, and that's their stock price.

"Since you're no simpleton, we wonder whether you have an economic interest in recommending Amazon.com rather than 'Your local bookstore, who can order it for you in a jiffy, at no charge, if they don't have it in stock.'

"You've been known to talk about the discrimination faced by the fat. Are you aware that in an ongoing civil action in Minneapolis by the Amazon bookstore there, a feminist store that has existed since before Jeff Bezos was in high school, the owners were attacked by Amazon.com's lawyers as lesbian - as though that put them outside the pale of our legal system and trademark protections - if it were so, or if it were germane?

"Please note: we are not bookstore owners, and never have been. One of us volunteers one morning a week at the Sierra Club Bookstore in Oakland, California, which is not really affected by Amazon.com. But we as retired folk with grandchildren do get exercised by this mindless kowtowing to a perceived, but spurious convenience."

Hank & Beate Lewis
Berkeley, CA 94707

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Dear Holt Uncensored:

Would someone explain to me, why after supporting my state by collecting sales taxes for them, some new company on the block should be exempt from doing what every business should be legally obligated to do?

And then they cover up this avoidance of responsibility by saying "let us lobby to exempt all books from sales tax" Does "red herring" ring any bells? Does "straw man" mean anything?

And anybody who doesn't think some smart computer geek can't come up with a workable and affordable (Jeez, if you can afford a web site you can afford to send out sales tax collections), soft ware to make these collections simple is no doubt working for Bezos.

And if the internet steals as much gross sales from real stores as they (whoever they are) say then what, raise the sales tax higher on the store still left in business? The exemption for the internet is a boondoggle and I can guess how much money went into the party coffers to get that one to go through.

Mike "Tax The Internet" DeSanto.

PS: Yes, We are so planning on entering the internet with or without Booksense.Com.

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Dear Holt Uncensored:

In your last issue, Andy Ross of Cody's Books wrote: "Albert Henderson and James Lawton argue that books should be exempt. Certainly this would level the playing field in our industry. However it would not solve the unfair nature of the Internet tax exemption for other commodities."

This whole Internet tax discussion ignores the fact that the Internet does not end at the Rio Grande or the Atlantic and Pacific Coasts. If state sales taxes are driving people to order out-of-state then a national sales tax will drive people to order internationally.

State and local governments need to reexamine and revamp their revenue sources now and not try to put a bandage on a leaky system. And we brick and mortar shops need to recognize reality and re-invent ourselves -- perhaps brick & cyberglue is the image to go for.

James Lawton
Brookline Village Books
Massachusetts

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Dear Holt Uncensored:

Andy Ross thinks I'm utopian, and I admit to it. Been interested in utopias for decades. It just seems to me that if we admit something is bad, getting more of it may not be the best solution.

As things now stand, I could send away for my books to Cody's (bookmarked on my browser): no sales tax to be collected or paid, though I'd pay shipping. Or I could go down to my local Barnes & Noble (the only bookstore in town; I'm not counting B.Dalton - please) and pay sales tax on my books. I guess the latter would make me more patriotic. And if a tax is imposed on books I order from Cody's, then I have to pay that and shipping, too, which doesn't seem like such a good deal for me. Not a heckuva deal, as we say here in Minnesota.

Question: if I order by mail (or, I presume, on the web) from L.L.Bean, I don't pay sales tax, but if I order from Land's End, I do, because the latter has outlets (or "Inlets") in Minnesota. Now, if I order from B&N or Borders on the web, that implies that I would pay sales tax through them, too - yes? Which leaves Amazon.com . . .

In short, with the present state of things the independents who sell out of state actually have a price advantage of sorts. Why give it up? Andy Ross also observes that the evil effects of the sales tax are mitigated for poor people because food and housing (and clothing, in Minnesota) are not subject to tax. But what are we saying if we make books a "luxury" compared to those other things? Are we hoping for a nation well housed, well clothed, well fed (to alter FDR) - and dull-witted? How long 'til we have a population that can't even spell "regressive," much less read the pros and cons of such taxes?

Linda Maloney

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