NORTHERN CALIFORNIA INDEPENDENT BOOKSELLERS ASSOCIATION

HOLT UNCENSORED #62
by Pat Holt

Wednesday, May 19, 1999

SHIFTING THE HEMORRHAGE TO AMAZON
ONE LETTER

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SHIFTING THE HEMORRHAGE TO AMAZON

All right, then: Are independents going to reel at the blow of Amazon's new loss-leader offer of 50% off New York Times bestsellers, and Barnes & Noble and Borders' terrified gosh-we-better-follow-along announcements as well (AND Books-a-million, AND all the other dominoes on the Web)?

No, no, NO, say quick-thinking booksellers, who see a bargain when they get bludgeoned on the head with it.

"We've come up with a great idea," writes one independent, a visionary to the toes, I must say: "All us indies will just buy our New York Times bestsellers from Amazon.com, thus saving ourselves money and helping Amazon to lose EVEN MORE money than they already have! Whaddya think?"

Why, say! Anyone with any sense would think that's hilarious and playful and silly and never-to-be-taken-seriously! Heavens, with the American Booksellers Association lawsuit going on and the integrity of independents at stake and your own deep convictions about doing nothing in an underhanded way, you can't listen to committed customers or friends of the store who ON THEIR OWN could buy 3-5 copies of bestsellers en masse and somehow transfer the inventory to you.

No, no, NO. For one thing, it wouldn't be fair! It might tilt the old playing field! It might transfer to that quivering quartet (Amazon, B&N, Borders and FILL IN HERE) the hemorrhage of income you've experienced every time Amazon et al has financed yet another unfair advantage by floating junk(y) investments in the Wall Street insanity pond and getting back $1.5 billion while independents struggled to pay bills with the few thousand they got from Penguin settlement.

(Hey, did Amazon get any of that money? Did Barnes & Noble or Borders? Why, you independents should be ashamed for keeping it all to yourselves.)

So here's the attitude we keep hearing from booksellers regarding the 50%-Off announcement: GOOD. Let's hope these chains and Amazon get a lot of sales and move right into a discount war (thank you, Books-a-million for stepping right over to the 55%-plus range) that could actually be damaging.

And let's hear it for Amazon investors, who may quite legitimately start to a'sputter and a'spout: HEY! After we watched Amazon stock value rise 3408% and losses soar 6542%, you're using loss leaders big time NOW? How long do you think we're going to finance this joyride? Don't you EVER want to make a profit?

And you can imagine potential Barnes & Noble investors a'puffing and a'pouting: HEY! Here you've got all this puff-piece publicity from certain places about the IPO and we're not supposed to worry that you're always a distant #2 and AGAIN you're playing follow-the-leader with some lame bid that brands you second-rate forever?

Then there's that ripple-down effect: Once again, if independents can only hang on as the so-called big guys kill each other off (of course this could take some time), the future could truly be bright and graspable. The Big Message is: The one thing that discount booksellers on the Internet really sell is price - they can't sell integrity (witness Amazon: who'll ever believe those "recommendations" again?); they can't sell imagination (those Riggio brothers HATE being #2), or innovation (bye-bye #3 Borders); they can't sell character and they can't, heaven knows, provide updated and important community news about coming authors, literary events, book clubs, writers' groups, etc. Only only only only only independents can do that. Bless 'em.

(Gee, special issues are fun - it's hard not to write my usual 30 pages but as it happens, just ONE letter is appropriate to the hot stuff above. Take a look and thanks for reading.)

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ONE LETTER

Dear Holt Uncensored:

As you may or may not know, Barnes & Noble is moving to have all their special orders done by a central office in New York. So when you order a book at your local B & N, the order gets processed by someone in New York, and then the book gets shipped to you.

A friend of mine who works at a local Barnes & Noble said that someone in their daily meeting asked the obvious question: If the customer has to pay shipping plus full price on a book ordered from a store, what's to prevent that customer from buying from barnesandnoble.com (or Amazon, of course)?

The manager's reply was fairly interesting. He said that it's generally known that online booksellers are just dropping prices to gain market share. Once they've gained the appropriate market share (translate: once all the independents have foundered and their market share has been doled out to the online giants), prices will go right back up to where they are in real stores.

How much he speaks for Amazon, I don't know, but as a store manager, I would say the chances are good that this is the message he's getting from corporate headquarters.

\r