Responses to Amazon/Walmart Price Wars over Books

Emily Pullen at Skylight Books blog:

What kind of soulless person would think that cheaper isn't better? According to Merriam Webster, the verb to cheapen also means "to lower in general esteem; to make tawdry, vulgar, or inferior in some moral sense." And frankly, that's something that I'd rather not do to our concept of reading and its influence in our lives. I'm amazed that publishers don't seem more outraged about this. As luxuries go (and reading is usually a luxury), you can't get much more economical than a book. Let's say you read one page per minute for 30 minutes every day. At that rate, it would take you 10 days to read a 300 page book, or 5 total hours. Where can you get 5 hours of entertainment or education for less than $15, let alone 10 DAYS of entertainment or education for about $25?

In the Huffington Post, Praveen Madan and Christin Evans write about what important things independent bookstores offer that Amazon and Walmart can't provide:

It seems to us that independent booksellers are not in the same business as Amazon.com and the chain stores. They are in a much broader business – it’s the business of building community. Successful independent bookstores use their love and knowledge of books to build community just like a contractor uses bricks and wood to build a house.  You can buy a book anywhere but you can’t buy community. Community doesn’t enjoy every day low prices at WalMart nor does it show up in a box delivered by UPS.

Atlantic Monthly offers a roundup:

Publishers should then use this turn of events to start putting their money where it matters: the emerging writers.

The Wall Street Journal points out the latest in this book pricing war is that the behemoths have begun to ration the number of books customers can buy:

Wal-Mart Stores Inc. has limited its online customers to two copies each of certain bargain books. Amazon.com Inc. has a three-copy maximum on certain discounted titles and Target Corp. has a five-copy limit online.

The Literary Saloon has some excerpts from a subscriber online WSJ article about how price wars are banned in Europe (sounds like a wise position):

In much of Europe, the discount-pricing battle that has erupted among Wal-Mart Inc., Amazon.com Inc. and Target Corp. could never happen because most major publishing markets, with the exception of the U.K., are bolstered by laws requiring all bookstores, online retailers included, to sell books at prices set in stone by their publishers.

UPDATE: The New Yorker wades into the fray:

"The best way to win a price war, then, is not to play in the first place. Instead, you can compete in other areas: customer service or quality. Or you can collude with your putative competitors: that’s why cartels like OPEC exist. Or—since overt collusion is usually illegal—you can employ subtler tactics (which economists call “signalling”), like making public statements about the importance of “stable pricing.” The idea is to let your competitors know that you’re not eager to slash prices—but that, if a price war does start, you’ll fight to the bitter end. One way to establish that peace-preserving threat of mutual assured destruction is to commit yourself beforehand, which helps explain why so many retailers promise to match any competitor’s advertised price. Consumers view these guarantees as conducive to lower prices. But in fact offering a price-matching guarantee should make it less likely that competitors will slash prices, since they know that any cuts they make will immediately be matched. It’s the retail version of the doomsday machine."

Comments

[G]

Interesting.

I'm not seeing what the problem is here. Doesn't selling books at a lower price mean that you can sell more of them?

[bookfox]

It's not just a lower price. It's one radically below cost. Walmart/Amazon lose money on each book. The stated price is $23, while the new selling price is $9. That's why they have to limit the number they sell. Walmart/Amazon can recoup losses on other, more profitable, merchandise, but bookstores and people who actually care about books can't sell books at any kind of a loss margin because it's their only product.

It's a kind of predatory pricing that will wipe out an industry, not a company. Although technically there aren't laws against this type of predatory pricing, there needs to be.

[Anna]

I've always thought that even if all collections go digital at libraries, and books are sold in digital format at stations at independent book stores, both will still remain as a browsing ground and hub for the community.

[bookfox]

Yes, the Espresso Book Machine is a great equalizer, I think. Instant books from a copier-sized machine will make even a small independent bookstore's catalog seem enormous.

But the bigger problem is price. Won't independent bookstores still have to sell the Espresso Books at a higher price than, say, Walmart or Amazon?