Merry Christmas to all and to all read a fiction book!

Are the online book sellers really losing money?

What do the lower prices mean to us, the buyers?

When will my local bookstore disappear?

Who are the online sellers that will have to shut their “doors?”

Do the authors and publishers agree with these selling tactics?

When will a new bestseller be “worth” $25 or more?

Will this new pricing hurt ebook sales?

As the prices continue to go down, what will be the bottom figure?

Are the discount prices illegal?

Is this a short or long term war?

Let the Book Wars Begin!

When I first saw the Walmart ad for the price of $9.00 for some of the bestsellers, I thought great, now I can buy the newest books without waiting till they hit the discount tables. Amazon then lowered their price and again thought, do not have to wait!

Then Target…

Then Sears… with a twist… Buy any one of those deep-discounted books at Target, Walmart, or Amazon, and send Sears the receipt and they’ll give you a credit of $9 towards anything you buy from Sears online. This means free books if you buy from Sears, a brilliant marketing ploy!

Barnes & Noble, Borders, Powell’s Books, when do they jump into the fracas? Or do they?

The Board of Directors of the American Booksellers Association today sent the following letter to the U.S. Department of Justice requesting that it investigate practices by Amazon.com, Walmart, and Target that it believes constitute illegal predatory pricing that is damaging to the book industry and harmful to consumers.

October 22, 2009

The Honorable Christine Varney
Assistant Attorney General
Antitrust Division
U.S. Department of Justice
950 Pennsylvania Avenue, NW, Suite 3109
Washington, DC 20530

Molly Boast, Esquire
Deputy Assistant Attorney General for Civil Matters
Antitrust Division
U.S. Department of Justice
950 Pennsylvania Avenue, NW, Room 3210
Washington, DC 20530

Dear Ms. Varney and Ms. Boast,

We are writing on behalf of the American Booksellers Association, a 109-year-old trade organization representing the nation’s locally owned, independent booksellers. A core part of our mission is devoted to making books as widely available to American consumers as possible. We ask that the Department of Justice investigate practices by Amazon.com, Wal-Mart, and Target that we believe constitute illegal predatory pricing that is damaging to the book industry and harmful to consumers. We are requesting a meeting with you to discuss this urgent issue at your earliest possible opportunity.

As reported in the consumer and trade press this past week, Amazon.com, WalMart.com, and Target.com have engaged in a price war in the pre-sale of new hardcover bestsellers, including books from John Grisham, Stephen King, Barbara Kingsolver, Sarah Palin, and James Patterson. These books typically retail for between $25 and $35. As of writing of this letter, all three competitors are selling these and other titles for between $8.98 and $9.00.

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.

It’s also important to note that this episode was precipitated by below-cost pricing of digital editions of new hardcover books by Amazon.com, many of those titles retailing for $9.99, and released simultaneously with the much higher-priced print editions. We believe the loss-leader pricing of digital content also bears scrutiny.

While on the surface it may seem that these lower prices will encourage more reading and a greater sharing of ideas in the culture, the reality is quite the opposite. Consider this quote from Mr. Grisham’s agent, David Gernert, that appeared in the New York Times:

“If readers come to believe that the value of a new book is $10, publishing as we know it is over. If you can buy Stephen King’s new novel or John Grisham’s ‘Ford County’ for $10, why would you buy a brilliant first novel for $25? I think we underestimate the effect to which extremely discounted best sellers take the consumer’s attention away from emerging writers.”

For our members — locally owned, independent bookstores — the effect will be devastating. There is simply no way for ABA members to compete. The net result will be the closing of many independent bookstores, and a concentration of power in the book industry in very few hands. Bill Petrocelli, owner of Book Passage in Corte Madera, California, an ABA member, was also quoted in the New York Times:

“You have a choke point where millions of writers are trying to reach millions of readers. But if it all has to go through a narrow funnel where there are only four or five buyers deciding what’s going to get published, the business is in trouble.”

We would find these practices questionable were they taking place in the market for widgets. That they are taking place in the market for books is catastrophic. If left unchecked, these predatory pricing policies will devastate not only the book industry, but our collective ability to maintain a society where the widest range of ideas are always made available to the public, and will allow the few remaining mega booksellers to raise prices to consumers unchecked.

We urge that the DOJ investigate and request an opportunity to come to Washington to discuss this at your earliest convenience.

Sincerely,

ABA Board of Directors:

Michael Tucker, President (Books Inc.–San Francisco, CA)
Becky Anderson, Vice President (Anderson’s Bookshops–Naperville, IL)
Steve Bercu (BookPeople–Austin, TX)
Betsy Burton (The King’s English Bookshop–Salt Lake City, UT)
Tom Campbell (The Regulator Bookshop–Durham, NC)
Dan Chartrand (Water Street Bookstore–Exeter, NH)
Cathy Langer (Tattered Cover Book Store–Denver, CO)
Beth Puffer (Bank Street Bookstore–New York, NY)           end of ABA letter………………..

Wow, it sure sounds as if they are angry! But, as I ponder this book war, I starting to really see things from their perspective.

The ABA is really worried that if this book war continues they will control all book sales and prices will then go up and will do so at their discretion. Isn’t this the way of the world? The few control the many!

Not all new novels are available for the discount price, but I believe more will follow. Sears for example only has these on their list: Going Rogue: An American Life by Sarah Palin, Kindred in Death by Nora Roberts writing as J.D. Robb, The Lacuna  by Barbara Kingsolver, Ford County by John Grisham, Under the Dome by Stephen King, Ice by Linda Howard, I, Alex Cross by James Patterson, First Lord’s Fury by Jim Butcher, Pirate Latitudes by Michael Crichton, and Breathless by Dean Koontz. See their webshot below…

Will $10 best-sellers doom independent bookstores?

Here is a post that has a take on the independent:
“Kyle Hall, director of marketing and events at Legacy Books in Plano, Texas lets us know how the price wars would be affecting the area’s largest independent bookstore.” We are not worried, he said. “We’ve been open almost a year now, and our business has NEVER been primarily driven by the standard bestseller lists. I think there are two reasons for that: 1) People shop independent bookstores for things beyond the bestsellers anyway – and I can’t stress enough how pleased we are that this was true of Legacy Books from opening day, and 2) by the time we opened last year, the manner in which the Targets and the Costcos and the Wal-Marts and supermarkets, etc., skim bestseller sales from other booksellers was well established, so that now the bookstores that have lasted are able to sit on the sidelines and watch the big box stores and online retailers sell at a loss and hope to make it up by selling you shampoo, cereal and pet food from their other departments. They will lose money on every copy of those books; they are selling below wholesale, as you know.” (http://booksblog.dallasnews.com/archives/2009/10/will-10-best-sellers-doom-inde.html)

So, what do you say about The Book Wars? Are they good for you?

Still battling…

This ain’t fiction baby, this is war!