Wednesday, June 3, 2009

How do Independent Bookstores Stay in Business?

The following is a lengthy quote from BookExpo America, which just finished up this past weekend in New York City. Several major authors discuss the pluses and pitfalls of independent bookstores.
  • 30% of all bookstore sales are through bookstore chains
  • 15% are sold online
  • 10% are sold in independents
  • 45% are sold in big box/specialty stores

Lisa Scottoline, author of more than 12 legal suspense novels (most recently Look Again, St. Martin's), said, "Everything is long tail now. For the 16 years I've been writing, I've watched it morph." Scottoline urged authors to do more, likening their role to that of "the guy who spun plates" on the Ed Sullivan Show. She recently showed her support of independent bookstores by committing to indies for 14 of her 24 bookstore appearances.

Sherman Alexie, winner of this year's inaugural Indies Choice Book Award for Most Engaging Author and National Book Award winner for The Absolutely True Diary of a Part-Time Indian (Little, Brown), said that his career was made by independents. In Costco, he said, "I feel like an eight-and-a-half pound jar of peanut butter." When he pays with a credit card in a chain bookstore, he said, maybe 10% of the employees notice his name, but in an independent bookstore, they see his card and begin whispering, "Is that him?" or "He's taller than I thought."

James Patterson said that the larger issue was that "people need to feel welcome," whether they wish to buy John Grisham or Gabriel García Márquez. At the organizational level, he believes that ABA needs to "draw more attention." He contrasted the lack of publicity outside of the trade for ABA with the national press attention paid to Comic-Con (which is open to the public). "We need to open the doors wider," he said. " 'The tie that binds' is that everyone in this room loves reading. We need to focus on what we have in common rather than what drives us apart."

With regard to James Patterson, I hope that we're a welcoming bookstore! We love to sell "Twilight" just as much as we love to sell "Wuthering Heights", and odds are good that if you talk to one of our booksellers, they will wax just as enthusiastically about one as the other.

Another quote, this time about Amazon:

The so-called brilliant economic model embraced by Amazon and other online retailers comes right out of your wallet. Their discounts are great because they have an extra 5% to play with that your local retailer does not."

In other words, Amazon does not have to pay the sales tax that your local retailer does. When the bookseller pays these taxes, the money goes straight back into the local economy, paying for schools, police and firefighters, and roads. Amazon has managed to circumvent taxes so far, but, thanks to the ABA (American Booksellers Association), Amazon does now have to pay taxes in New York State. They are, of course, fighting this outcome.

I don't want to just paint Amazon as the bad guy. It's a business, not the anti-Christ. However, we do have a lot of customers wonder why we charge more than Amazon does. Lots of reasons: first, Amazon is essentially a clearinghouse for a nation of used bookstores. This means they have access to lots of books. A large quantity of anything usually drops the price. Second, they pay no sales tax in almost every state. Third, Amazon does not have to maintain the rent on brick and mortar bookstores. They do have to maintain warehouses, but I think we can agree that the costs on that are less. And mostly, Amazon does not even need to do this, since (referring back to the first point) many smaller stores do the warehousing for them. Fourth, Amazon has the ability to negotiate deeper discounts with publishers because of the vast quantities of bestsellers that they purchase, much as Walmart has the ability to negotiate deeper discounts because of the scale of their purchases.

So it's not that local booksellers are gouging their customers. We have to pay rent, a wonderful sales staff, utilities, taxes, and of course, we have to pay for our books at a higher price than the big boys do. We hope that we can make up for this by stocking older books that you might not find at the big stores, who turn their inventory over once it's off the bestseller list. Looking for the complete works of Tony Hillerman or Jim Butcher? We've got 'em. We also have a great, knowledgeable sales staff who love to talk books and do informed recommendations. Believe me, they aren't paid nearly enough. Plus, we hope that we are answering the call of our local customers who want to see a local, independent bookstore downtown, so they can pass a rainy Sunday afternoon there, or maybe see a local author who is starting to break into the big time. We try our best to provide value. Sometimes, value comes in other ways than rock-bottom prices. I think I'm beginning to write a book, but I will post later on all the ways that you can also save your dollars by shopping at Old Firehouse Books. More to come....

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