[DMcCunney]

Originally Posted by pwjone1

I was over in Europe on business, so did not catch this story when it came out, but I have to say, it just seems highly unlikely. Interesting conjecture, and never-say-never, but with the two #1 and #2 in Books, I don't think it passes muster with the anti-monopoly laws in the U.S. Granted, those are less and less enforced, but it's a Democratic administration, mergers and buy-outs have a little tougher time passing muster. The only way to get around it would be the convince the government and courts that Amazon/Walmart are the real competition.

I suspect regulatory approval would be forthcoming. Amazon, Walmart and the like are the competition.

As a customer of many bricks & mortar bookstores, I'm not sure how I see this playing out. B&N and Borders did a pretty good job on the little mom & pop type bookstores, I sorely miss those. The B&N and Borders play is about variety and pricing. They build bigger, they price cheaper. I personally prefer B&N, they have a discount card which is handy for frequent buyers, and a wider selection of discounted books. I've found the larger Borders stores to be better in Computer books sections. But if they downsize their stores, then it lets back in the mom & pop operations, not a bad thing to my way of thinking, but just doesn't work. If you're small, the local operations beat you on tailoring to the local environment.

But the big chains beat you on pricing, which is why the mom & pop operations are an endangered species. B&N/Borders are large enough to order directly from publishers. Mom & pop shops must go through a distributor like Ingrams or Baker and Taylor. The distributor takes a cut off the top, so the mom & pop store has less margin to play with and less flexibility on pricing. People shop on price, which is why B&N/Borders are killing the smaller retailers. If I'm a mom & pop bookstore, I can tailor to the local climate, but I can still expect customers to go the the local chain outlet for the stuff they carry, and come to me for the less known stuff. Can I sell enough of the less known stuff to stay in business? I wouldn't lay bets on it.

There are an assortment of small book retailers near me, but they are specialty places with a niche focus, like Juvenile/YA, travel, and photography.

An old friend used to operate an SF/Mysteries specialty shop. He fulminated about how the Association of American Booksellers had misled him about the ability of a single person to run such a shop. (They said it was possible - he discovered he couldn't do it effectively, and my SO worked for his for a while. He closed his doors when the building his storefront was in raised the rent and made it impossible to continue.)

Certainly the backend distribution systems would benefit from combination, but local stores could pool (and do). However, any time a book is not in stock (either because they don't stock it, or sold out), I order on-line. Why go through the trouble of ordering at the bookstore, just go on-line, shipped to your door (or eBook reader). There I buy more from Amazon, but I run it through a pricing engine first.

But, I have to say I have shifted over my buying, where it makes sense, to eBooks. They're generally cheaper, no need to set foot in a bookstore, point click and purchase, easier to carry with when you travel. Trying to get 100% of my fiction reading there, but am still waiting for a good color + large page eBook reader (the iPad is close) for the rest. Textbooks are somewhere in between. But I tend to be ahead of the curve, I think it will take longer for the average consumer to shift. Their kids will shift, if they're still reading.

I have about 4,000 ebooks, and probably a similar number of pbooks. (The ebooks are easier to count.) There are some classes of books (like art, photography, and design) that are poor fits for ebooks. (There's a reason many such volumes are called coffee table books. Size matters in presenting the content.)

So probably both B&N and Borders are a bit undervalued, if they were ever to get their internal house in order.

The fundamental problem both face is declining sales. Same store sales are down across the board, and places like those require volume. We're seeing contraction: B&N closed a large outlet elsewhere in Manhattan because of declining sales. The B&N superstore near me still exists, but it's in a relatively lower rent district.
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Dennis