HomeTag: bookstores

How to build an empire.

[Amazon] started as a “book retailer” and nothing else. They leaned on Ingram’s Oregon warehouse to enable their business model, which was to take an order for a book and accept payment, then procure the book from Ingram and send it to the customer, and then a little later pay Ingram’s bill. This positive cash-flow model was so brilliant that Ingram could have readily enabled lots of copycats, and they formed a division called Ingram Internet Support Services to do just that. So Amazon killed that idea by cutting their prices to no-margin levels and discouraged anybody else from getting into the game. That was in the late 1990s.

They could do that because the financial community had already accepted Amazon’s strategy of using books to build a customer base and to measure future business prospects by LCV — the “lifetime customer value” of the people they did business with. And it became clear pretty rapidly that they could sell book readers other things so no- or low-margin sales were simply customer acquisition tactics. This was a game Barnes & Noble and Borders couldn’t play.

Now book and ebook sales are almost certainly no more than a single-digit percentage of Amazon’s total revenue. Kindle Unlimited, like their publishing enterprises and self-publishing offerings, are small parts of a powerful organization that has many ways to win with every customer they recruit.

Mike Shatzkin on no-margin, no-profit.

2020-05-12T08:13:34+10:0012th February, 2016|Tags: , , |

The returns system is bullshit.

Pretty much everything that’s broken in the publishing industry can be attributed to the returns system. This is the thing whereby, if a bookstore does not manage to sell a book within a period they deem appropriate, they strip it (tear the back cover off) and return it (actually just the cover) to the publisher for credit against their next stock order.1 No other industry works this way,2 and there’s no reason any industry should work this way.

The system sounds bad, and it’s actually worse. If you’ve ever been into a bookstore, looked at an enormous stack of a single title, and thought, “They couldn’t possibly sell that many copies!” then congratulations, you’re seeing the excesses of the returns system. Bookstores, particularly the big box chain stores, over-order on bulk discount, knowing that the vast majority of the stock ordered will be returned… and also knowing it doesn’t matter thanks to said discounting.

(Incidentally, author royalties are usually paid differently on bulk discounted sales than on regular sales. So not only is the publisher left with a mountain of returned books to pulp, but authors aren’t paid shit for the ten copies that did sell. Fun times.)

The returns system is also why a lot of indie publishers, including self-published authors, have trouble getting stock in bookstores. Because their titles usually aren’t returnable, bookstores won’t carry them. Which is the reason why you can walk into just about any bookstore in the world and see (accounting for some variation due to native publication language) the same handful of titles over and over again; these are the books published by the Big 5, who have the clout to do returns in the way a lot of small presses don’t.

Basically, I’ve never seen a compelling (modern) argument for why the returns system should exist. But killing it now will be… tricky. Probably some combination of a major chain store folding, coupled with a coordinated refusal by some or all of the Big 5 to continue the practice. While the former isn’t out of the question, the latter is potentially illegal (collusion). And so stuck with the system we are, for worse and for worser.

  1. I think in some cases the books are returned whole, but that’s a whole other issue about shipping and storage. But basically, if you want to steal books, befriend someone who works at a bookstore and ask to see the box of stripped titles out the back. []
  2. “Magazines do!” you cry. Yes, I say, I know. Because magazines are released by, drumroll, publishers! []
2019-04-29T11:59:56+10:0028th September, 2015|Tags: , |

The Trade.

[E]very day, in bookstores all over the world, buyers make decisions about the books they want to buy. At the same time, they make decisions about the books they want to exclude.

The retail stores these buyers represent also make decisions about the books they plan to feature, whether in the front window, at checkout or as cover-out books promoted on shelves within the store. By extension, they make companion decisions about the books that they will not promote.

Often enough, decisions about the books that are promoted is a function of marketing dollars: how much a publisher is willing to pay to get access to the front window or the checkout aisle. There’s nothing wrong with that; it is well-documented and widely understood by people who work in trade publishing, though the general public may not fully grasp the system.

–Brian O’Leary on decisions.

2017-08-23T09:56:14+10:001st October, 2014|Tags: , |

Bookstore apps.

A bookseller in the UK, Foyles, has launched an interactive “store map” accessible via user smartphones. Basically, you tell it what you’re looking for, and it shows you a map of where the title is in the store.

This is a good start. But I think unless apps like these allow immediate online ordering of titles, they’re never going to be more than expensive gimmicks…

2019-12-18T09:50:05+11:0022nd September, 2014|Tags: |

Designs for a better bookshop.

For a hipster architect’s definition of “better“.

The one thing that gets me, though, is that the bookstores here don’t have banks of computers/tablets/whatever with their online store pre-loaded. Like, you’re in the store, it doesn’t have the book you want, so you go over to the computers (or the attendant directs you over to the computers) to order it yourself from the shop’s online presence. Pickup or delivery, whichever you prefer. This would seem to be another one of those areas where a small investment in technology could greatly assist a brick-and-mortar store with things like stocking, inventory, showrooming, and integration with e-readers.

But what do I know, I guess.

2020-10-21T09:40:20+11:0030th July, 2014|Tags: , , |

My Independent Bookshop.

“Independent” might be stretching the definition of the term, given this project is being run by Penguin Random House. But still. It’s an interesting idea and similar, I suspect, to what Amazon wants to do with GoodReads.

It’s also interesting that they seem to be running it out of the UK, not the US, and I would almost guarantee that’s got something to do with Amazon and market segmentation. Same as how the company has been quietly taking over online bookstore chains in Australia and New Zealand,1 where Amazon’s presence is ubiquitous but not local (Amazon shipping to Aus is notoriously awful, for example).

If I had to take a guess, I’d say the strategy has got something to do with the failure of the big box retail bookstores, a.k.a. Borders. Physical stores are expensive to maintain, particularly in their huge mega-mall incarnations. But people still like books, and still want to buy books. So bookstores won’t die, they’ll just go smaller; indie shops, basically. Meanwhile, online retail is getting bigger and bigger.

The double-bind is this: people still like going into physical bookstores and browsing books, touching the pages, getting recommendations from staff, and so on. But they also like buying things online, like when they’re drunk at 3am and want to throw down $200 on books about dragons what no that’s never happened I’m mean I heard about it from a friend shut up.


Maintaining physical presences is impractical for online stores–sort of the entire point of Amazon is that it’s too big to fit into a shopfront–but maintaining online stores is too expensive and difficult for brick-and-mortar booksellers. So bookstores suffer the ignominy of showrooming, and consumers lose access to physical products.


Easy: get a big, fat, cashed-up corporate chain–say, oh, just for argument’s sake, Penguin Random House–to come in providing a kind of prepackaged white-label (or “grey-label”/in-partnership-with) ecommerce-plus-social-discovery service to physical retailers. PRH has the cash, expertise, and distribution chain to keep the web presence running as a software-as-a-service offering, while the locally-owned brick and mortar stores have a way of capitalising on customer brand loyalty outside of business hours.

Basically: you go showroom in the brick-and-mortar, then buy online later from their SaaS clouded webshop. Your local gets its cut either way, meaning they can pay their rents, meaning they don’t close, meaning everyone wins, especially you, The Customer.

This also opens up some fun potential avenues for both PRH and Local Indie Shop.

For Local Indie Shop, it means being able to fill every special order with Amazon-level convenience; pickup or delivery, customer’s choice. It allows better provision of ebooks to customers (obviously I’m a fan of this one). Plus, it gives a greater visibility over stock and popularity. At the moment, if I walk into a brick and mortar store looking for a book, don’t find it, and go buy it on Amazon instead, the store has no idea I wanted that book, and thus no indication they should stock it in their shopfront.

Meanwhile, on their side of the equation, PRH gets to sell more books. Which, yanno. Is kinda the business they’re in. Plus, their service scales. Why restrict their online ecommerce offering just to bookstores? Why not offer it to individuals, to blogs, to community groups, to schools?

People like recommending things, and they like making money (or, at least, having a near zero-effort potential to make money). Combine the two, and everybody wins.

That’d be how I’d do it, anyway. Which is, uh, notable not how My Independent Bookstore operates. So there’s that.

See where this one goes, I guess.

  1. The online presences of Angus & Robertson, the Australian arm of Borders, and New Zealand’s Whitcoulls were all recently bought up by Pearson PLC. You may recognise Pearson more for its consumer brand, Penguin, which is the 43% to Bertelsmann’s 57% of Penguin Random House.
2020-05-12T08:12:45+10:0015th June, 2014|Tags: , , , |

Print your own books.

When people ask me questions like, “Alis, why did you choose a digital-only publishing deal over p&e?” the answer gets long and complicated. But this is part of it.

The biggest problem bookstores have–from publishers, authors, readers, and themselves–is the fact that they just (to paraphrase the meme) can’t stock every book. So they have to try and pick which ones they think will give them best bang for their shelf space. Except publishing is a subjective beast and the numbers are impossible to get right, which is why the returns system exists. (In a nutshell: if books don’t sell, bookstores strip the back cover, chuck the book into the bin, and send the cover back to the publisher to get credit against future purchases. One of the corollaries to this system is that it makes calculating author royalties monstrously difficult, given that a stripped and returned book isn’t considered a sale… but publishers don’t know that until the book is returned, the timing of which is up to individual stores.)

Bookstores will, I think, always carry pre-printed stock of bestsellers and anything publishers have bought co-op for. These will be your trades and your hardbacks, plus all the books that don’t lend themselves well to PoD.

But for everything else, and in particular novels from midlist/debut genre authors, I think we’ll be seeing a lot more print-your-own stuff going on. PoD machines like the Espresso will get better, because technology always does, and, in a decade or so, in-shop prints will have largely replaced the mass-market paperback.

That’d be my bet, anyway. If I’m wrong, y’all can come back here in 2024 and gloat about it, I guess.

2020-10-21T09:46:39+11:008th May, 2014|Tags: , , , , |

Small markets.

My Amazon purchases are interesting. First, I bought some new, print editions on Amazon that I couldn’t find locally. I bought some used editions from vendors that advertised on Amazon, so Amazon took a percentage of the purchase price. Finally, I bought ebooks from Amazon. The real point here is that I shopped on Amazon because it was the only place that I could find all of the books that I wanted.

–David Keener on where he bought books in 2013.

This is particularly Relevant To My Interests. I think I’ve mentioned before that every now and again I go on a mission to try and not buy books from Amazon. Which means storming the local bookstores looking for titles. The last time I tried this, my shopping list included Naomi Novik, N.K. Jemisin, and Joe Hill.

I walked out with one from three, then gave up bought the other two on my phone via Amazon while I was exiting the last store.

Honestly, I don’t envy local bookstores their task of competing with Amazon (and our bookstore chain is local, given all the big nationals and multinationals have closed down). But, like, a decent backlist of ebooks and a navigible website would be a damn fine start…

2015-06-29T19:53:06+10:003rd April, 2014|Tags: , , , |

And a POD in every bookstore.

While I’d prefer it not be from Amazon–having one single vendor monopolise every part of a market is never a great idea–it’d certainly be cool to see the day where a POD machine was an essential part of every bookstore. Can’t find something on the shelves? Why, then you can print yourself a copy right there in-store! (Or buy the ebook, or order it, or, or, or.)

2018-02-08T08:48:08+11:002nd April, 2014|Tags: , , , , |
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