Most of the “shop indie bookstores / fight the big box chains” rhetoric I’ve heard has been rooted in a vague all-purpose anti-corporate sentiment rather than concrete concerns. This recent letter from the American Bookseller Association to the US Department of Justice is useful in spelling things out:
Publishers sell these books to retailers at 45%-50% off the suggested list price. For example, a $35 book, such as Mr. King’s Under the Dome, costs a retailer $17.50 or more. News reports suggest that publishers are not offering special terms to these big box retailers, and that the retailers are, in fact, taking orders for these books at prices far below cost. (In the case of Mr. King’s book, these retailers are losing as much as $8.50 on each unit sold.) We believe that Amazon.com, Wal-Mart, and Target are using these predatory pricing practices to attempt to win control of the market for hardcover bestsellers.
It’s important to note that the book industry is unlike other retail sectors. Clothing, jewelry, appliances, and other commercial goods are typically sold at a net price, leaving the seller free to determine the retail price and the margin these products will earn. Because publishers print list prices indelibly on jacket covers, and because books are sold at a discount off that retail price, there is a ceiling on the amount of margin a book retailer can earn.
The suggested list price set by the publisher reflects manufacturing costs – acquisition, editing, marketing, printing, binding, shipping, etc. – which vary significantly from book to book. By selling each of these titles below the cost these retailers pay to the publishers, and at the same price as each other, and at the same price as all other titles in these pricing schemes, Amazon.com, Wal-Mart, and Target are devaluing the very concept of the book. Authors and publishers, and ultimately consumers, stand to lose a great deal if this practice continues and/or grows.
What’s so troubling in the current situation is that none of the companies involved are engaged primarily in the sale of books. They’re using our most important products– mega bestsellers, which, ironically, are the most expensive books for publishers to bring to market–as a loss leader to attract customers to buy other, more profitable merchandise. The entire book industry is in danger of becoming collateral damage in this war.
More at the link.
It’s a messy situation all around (from a publisher’s perspective, the chains are skimming off the “sure things” rather than supporting the whole line; from an indie store’s perspective, they’re hogging all the books that bring people in the door and making it impossible for small stores to use them; from Wal-Mart’s perspective, they’re just trying to get books to people as affordably as possible, and they only want to carry the items their customers are interested in), but it’s nice to hear facts rather than vague suspicion.
EDIT:
Techno-optimist Clay Shirky offers commentary, calling these “arguments that made some sense twenty years ago, but have long since stopped doing so.” Instead, he proposes that booksellers begin “treating the old side-effects” — i.e. the physical amenities that bookstores uniquely provide in addition to selling books — “as the new core value.”
