Quote:
Originally Posted by Barcey
Amazon's distribution model allows them to sell hardcovers at a cheaper price but I wouldn't agree that operational efficiency is "devaluing the book market". If anything I would argue that it's the stores that only sell bestsellers that have devalued the hardcover. It was the publishers decision to increase distribution through big box stores that have devalued the book market.
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It doesn't work that way.
Publishers sell to wholesalers and large retailers. The retail industry has been steadily consolidating. Small "Mom and Pop" bookstores have been folding under pressure from the chains. How much the publisher gets per copy from the wholesaler or retailer is governed by the volume of the sale. The more copies you buy, the cheaper a per copy price you'll be charged. The big chains can translate those lower wholesale prices into cheaper retail prices, and the smaller stores
can't match that pricing and make money. (And the small stores aren't big enough to be worth a publisher's while to sell to directly. They must buy from a wholesaler, who has their own margin to think about.)
The big chains, in turn, are under pressure from warehouse stores like CostCo and Sam's Club, who buy in even higher volumes and can charge even lower prices. And Amazon is putting pressure on
everyone.
Part of the problem facing the industry is that buying decisions are concentrated in increasingly fewer hands. Nobody knows the book buyers for CostCo and Sam's Club, for example, but they have enormous clout in the industry due to the volume they purchase. And because of the size of their operations, they have to sell an awful lot of something to make it worth selling at all. They are, after all, a classic case of accepting low margins and making it up on volume, so they'll buy what they think will
sell in volume. In the case of books, that's bestsellers.
Don't blame the publishers for this. They aren't responsible for the contraction of the book retail industry. They are just as happy selling to anyone who would like to buy. The retail industry is consolidating because everyone wants to buy their stuff at the lowest price they can get, and the smaller outlets simply can't sell as cheap as the big guys.
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Dennis