Those Wacky Price Wars

So you might be aware that Walmart, Amazon, and Target are all trying to kick the sh#! out of each other by undercutting already ridiculously low pricing. Suddenly books are the hot new loss leader, I guess. Here's an article from Shelfawareness, an online newsletter for booksellers and publishers:

The book trade experienced its own version of "scoreboard watching" yesterday as the retail price for John Grisham's newly released Ford County fluctuated, thanks to price maneuvers by Amazon and Wal-Mart.

"It was a weird day in the book price wars," the Associated Press reported, noting that the price of Grisham's short story collection "moved up and down like stock market shares as rivals Amazon.com and Walmart.com extended, then rescinded, their high discounts for top-selling pre-orders."

While Amazon was offering the book for $9, "Walmart.com was selling Ford County for $12 early Tuesday, then cut the price to the pre-order discount of $8.98," the AP wrote. "By Tuesday afternoon, the cost was back up to $11.99 for both online sellers." Target.com's price was $15.

A blow-by-blow account of the price standoff was also featured in the New York Times, which tracked three Tuesday releases--Grisham's Ford County, Barbara Kingsolver's The Lacuna and J. D. Robb's Kindred in Death.

As of Tuesday morning, "Amazon still had those titles priced at $9 while Wal-Mart, which had offered them on pre-order at $8.98, and Target, which had offered pre-orders for $8.99, had raised their prices. At Walmart.com, for example, Ford County was selling for $12, while The Lacuna was $13.50. At Target.com, The Lacuna was on sale for $18.89 and Kindred in Death was $17. But by late morning, Amazon had raised its prices--The Lacuna and Kindred in Death, for example, were offered for $13.50--while Walmart.com had cut them again. All three novels that went on sale Tuesday were on sale at Walmart.com for $8.99, but by the afternoon, Walmart.com had raised its prices to just one penny lower than the price for the three titles on Amazon."

This morning, Amazon and Target were selling Ford County for $11.99 and Wal-Mart offered the title for $11.98. Lacuna and Kindred in Death were priced in the $13.49 range, give or take a penny.

I think the lesson here is that none of these businesses really have any clue what they want to accomplish. They're flailing around reactively instead of having any sort of coherent plan. I feel really lucky that we have customers who understand that offering books for below what they cost to produce will only drive more publishers out of business, make authors unable to earn a living wage for their art, and not allow publishers to take a chance on a new author who may or may get a bestseller with their first book. It makes me sad that the discounts we offer in our store (10% on new books with trade credit, 15% on hardback bestsellers, 20% if you print a coupon off our website or use your Be Local book) look so paltry compared to those of companies who aren't afraid to sell at a loss just to get a customer. We'd love to do better, but we just can't and pay our rent or our employees.
However, our customers really seem to understand this. They see the depth of the stock we offer (not just the top 3 bestsellers) and the expertise we have. Our customers really contribute to the great atmosphere we've got in the store. I've seen two customers (who are also friends of mine) meet each other and promptly start giving each other recommendations about the paranormal romances that are their favorite. It's pretty awesome to see the community we've got going here, thanks to them.
Here's a quote from Boulder Bookstore on the price wars:
In Boulder, Colo., 9NEWS checked in with Arsen Kashkashian, head buyer at the Boulder Book Store, for his take on the price wars.

"It's never really happened like this before," he said, noting that he had planned to buy extra copies of the hyper-discounted titles. "From the publishers, a $35 book is going to cost us $18 or $19. So if Target or Amazon wants to sell it for $9, then maybe I can buy 20, 30, 40 copies for the store, he said. "It would have lowered our cost by $500."

Unfortunately, Amazon, Target and Wal-Mart quickly installed rationing policies to discourage such plans. "I don't think they wanted to be the wholesaler," said Kashkashian. "They're looking to capture that piece of the market. But they're not willing to stand behind the price."