(That’s a request for English, for the non-Russian speakers!)

Amazon didn't take my business away from these bookstores. These bookstores decided to not cater to me.

So sad, but true.

Amazon didn’t take my business away from these bookstores. These bookstores decided to not cater to me.

Small independent bookstores go out of business because their profit margins are, for the most part, too slim for them to continue when there’s a drastic decline in sales. A solid, thriving business can compete against a larger one–there are many small local businesses who have succeeded despite the presence of Wal-Mart.

The fact of the matter is that bookstores are begun on the basis that, unlike other retailers, they will be able to “borrow” their stock, and ship it back for credit if it doesn’t sell in order to replace it with newer stock. This is the system of returns begun in the late 1920′s by the publishers who feared they wouldn’t have anywhere to sell their wares. A system which has since come back to bite them in the gluteus maximus. In some cases returns run as high as 50% of books shipped.

Returns are charged against sales. That means every book returned are royalties some author doesn’t collect. Losses from returns translate into less money for publishers to sign up new authors.

It’s simplistic to blame Amazon for the demise of independent bookstores, many of whom are as much victims of skyrocketing commercial rents and other factors as anything else. If you were to survey those bookstores that are operating successfully, you’ll likely find most if not all are owned by people who also own the real estate.

Here’s the truth: books are a losing proposition for Amazon, too. At least, they were until quite recently. It may be that’s improved with their various streamlining efforts, but the image of them as some sort of ogre swallowing up the publishing industry is based on emotion, not facts. This is precisely why Amazon has diverged into all those other areas of commerce–they make more money. Those other areas subsidize the book department.

I will also point out that small presses who choose not to accept returns are essentially barred from being included in those small independent bookstores. Because we aren’t willing to shortchange our authors and, probably, put ourselves out of business, we have no other recourse but to put our faith in Amazon.

I for one would love to support local booksellers. I do, as much as I can. And more and more of them are coming to discover there’s a difference between subsidy presses who use digital on-demand printing and publishers who choose to do so for reasons both economic and environmental. Much is made of the fact that indie booksellers are active hand-sellers, providing personal recommendations you can’t get at a Barnes & Noble. So, how hard could it be, if they find a Zumaya book they like, to stock one or two copies and do just that?

We inventory-free publishers aren’t asking for special favors, and most of us are willing to be as accommodating as our own welfare allows. However, if we don’t sell books, we won’t last long, and for most of us the majority of those sales are made through Amazon.

I took advantage of a 4-for-3 special (got my books today), when I bought the Smart Bitches book. The thing is, if I’d gone into a local store I would have spent less money because I wouldn’t have even known about the other books. Thanks to some commentary on the SB thread I looked at the additional books offered, went on a link-y binge and found four Zebra Debut historical novels that I can’t wait to read. Added a book from my shoping cart to the total order (because I was getting one of those books free) and Amazon, the authors, and I are happy campers. :) They get the business/royalties and I get more books.

I wouldn’t have made those extra purchases in person, because I would have said, “well, I have a TBR pile at home….” and walked out of the store.

Today I placed an order at Amazon for 11 books. The shipping is free. The 4-for-3 promotion saved me an additional $13.49. The total was $64.91

At BN it would have been, which at BN would have been $74.79 [with my 10% discount + tax) and shipping is still free for me. So the 4-for-3 is the bulk of the price difference.

So, while sales tax gives Amazon an advantage, the real cost advantage for me is that 4-for-3 buy.

@Mary Winter

Jeff Bezos is a visionary, and an opportunist, which makes him a successful visionary – a rich one. And I completely agree, EBay has indeed turned into a rip-off bizarre. Their effort to be an alternate Amazon Marketplace was ill conceived, badly executed and failed to factor in the nature of their core customer base. I used to buy there a LOT and haven’t even looked in over a year. They screwed the the very people who made them what they were, the small sellers. Those are the ones I usually bought from because of the rather esoteric items I hunted. Now that Whitman is done wrecking EBay, she’s looking for political office. I’m sure California is thrilled.

I used to be a big ebay seller. Ebay tried to become Amazon and boy did Whitman/Donahoe not get it. It’s now a haven for scammers and thieves and many of the small sellers like myself have left in droves.

As a publisher, while I admit to being concerned, especially about the Booksurge lawsuit and the implications of what Amazon tried to do, I can’t complain. Not yet anyway. *grins* Our print books are there. We have kindle sales that are paid for regularly, and I love being able to easily reach the amazon audience. I could see them becoming a big, evil empire, and when that happens, publishers will have business decisions to make. But right now, Amazon is doing a lot to help small publishers compete. Does it make them money? Of course it does.

The publishing paradigm is changing, and changing fast. Keep up with the herd, or get eaten by a lion. And I admit to firmly believing that authors need to pay attention to their publishers and find out how they’re adapting, or not.

There was a lovely Bill Moyers show that had the founder of Ning on there, and he talked a lot about Jeff Bezos’ business plans. It was quite interesting watching, because you’re right Mr. Bezos is a visionary and people like him will be shaping our future marketplace.

About sales tax–the fact is Amazon has already been compelled to start collecting it in New York, and it’s likely the rest of the states that have sales tax are working on achieving the same goal as we speak. And the fact is, anyone who purchases a taxable item online is legally supposed to submit the amount of tax they would have paid on it had they purchased it locally to their state taxing authority–it’s called “use tax.”

Obviously, the cost of collecting use tax from individuals would be prohibitive, so nobody needs to worry their state comptroller will be sending out the cops. They can, however, enact laws like the one in New York; and in the current economy I’d be very surprised if Amazon isn’t collecting tax on all sales by the end of the year.

B&N will be very happy about that, as will all the indie bookstores. They have to collect tax–the indies because they’re local and B&N because sales tax laws require it if an online retailer has a physical presence in the state in question. It’s one of the few things indies and superchains agree on.

Still, it tends to be the shipping that kills you–books are heavy, and the irony is that they’re more expensive to ship media mail in small quantities than if you get four or five at a time. If media mail is even available; most of the time you have a choice of Priority or Overnight, and Priority on a 1-lb package is going up in May.

Amazon Prime is a loss-leader. That means Amazon loses money on it because they’ve determined they will make enough on sales to cover the loss and make a profit. They were roundly criticized by Wall Street for it–pots and kettles. However, I’ve always assumed their various new policies, such as the one for POD, were related to their need to balance their losses on free shipping and Prime.

We have a small online bookstore we use for special sales and such, and we offer free shipping for the moment. I may have to reconsider that because my authors just aren’t making the royalties they should on those sales.

I think the real question is, why has no one, including Barnes and Nobel, been able to compete online?

I can tell you why I, personally, stopped purchasing my books from B&N and let my membership card expire this year — taxes and shipping costs. So, it came down to $$. I paid the yearly fee for Prime shipping at amazon, $79.00/year or $6.58/month if you divide it that way, they don’t charge taxes. So, at amazon, if a book is $6.99, I get it for that price and within 2 days I have it without having to pay extra.

At B&N, a $6.99 book would be come out to approx. $11.00 by the time the extra charges were finished. The 10% off was not worth it for me personally since I purchase so many books per month on-line (10 to 15 avg). So, slowly I stopped buying from B&N on-line. I do love their book stores, but the nearest one is far, so I hardly ever shop there.

I bought at BN for a long time and still hold a discount card there. Their website is as staid and unexciting as their stores. The stores work, the website doesn’t. It appeals to those who read the Wall Street Journal and New York Times. The web is full of shoppers who couldn’t care less about classy, refined appearance. In fact, the understatement works against it.

I do wish someone would give Amazon some strong competition, but I think others let them get too far ahead. It took a LONG time for Amazon to show a profit. I’m not sure investors are that patient anymore.

Do I think that in the long run we lose? Yes. I just don’t think it’s all Jeff Bezos fault. He just exploited an advantage – and isn’t that the whole point of a free market economy? Amazon was dismissed as an upstart for too long by old line retail. Now the power has shifted. Whose fault is that?

To me, it’s not just a question of whether one likes or agrees with what Amazon is doing; it’s also about whether one or two visionaries is enough to have a truly healthy publishing culture. IMO it’s not. Every vision, every visionary is necessarily limited, and it’s the interplay among competing entities that pushes the market and the culture forward. Without that dynamic interplay, the visionary eventually becomes the establishment, and the whole cycle begins again (or continues, depending on how long a timeline you’re drawing).

What is it going to take to spur innovation in publishing? If I knew that not buying books for a certain amount of time would contribute to change, I’d stop buying right this second. But it’s not looking like severe financial setbacks are inspiring core changes in publishing monopolies. So, really, what’s is going to take?