What big Amazon already does
I came across this article about how small booksellers can compete with Amazon.com. While the content is good, and will help a small bookseller, the things they list won’t actually be an advantage against Amazon.com or other corporate book giants. Here’s why:
1. Mix used book sales with new book sales.
Amazon already does this far more successfully than you’re likely to. Every product offers anyone in the world the option of selling it used on the Amazon platform, in exchange for a small cut of the earnings. Can you do the same in a small bookseller and allow arbitrary sales through your store? No–you don’t have the logistical infrastructure. And, the Amazon way, we offload most of the work of selling a used book (stocking, pricing, shipping) onto a third party seller. As a bookstore, you’d have to do those things yourself, at cost. For Amazon, it’s free.
2. Own your building.
Big no no. Do you think Amazon.com owns a lot of real estate? Owning buildings ties you down.
3. Magazines are impulse buys; do not devote floorspace to a ‘magazine area’.
The nice thing about Amazon.com or another web company is that it can profile users and pander to their specific impulse buys with special targetted feature sections and avoid exactly the problem of wasting space, but still retain the impulse customer orders. A small bookstore can’t compete here.
4. Do not devote large sales areas to ‘big name’ books, nor technical titles, nor time-sensitive books.
Again, this is the inventory problem. How can a small bookstore compete with Amazon, when Amazon has a floating inventory of millions of different book titles and can fully leverage the long tail effect?
6. Events remind people that your store sells books.
But, so does reputation. Amazon carries a carefully built brand name that a small bookstore cannot hope to match.
Anyway, I think you get the point… small booksellers can do fine on their own, but not for anything but sentimental or “human” reasons. Technically, for the purpose of buying a book, Amazon is a far better consumer choice than your local mom and pop.
| This entry was posted on Friday, August 19th, 2005 at 11:52 pm and is tagged with inventory problem, sales areas, feature sections, name books, amazon, web company, customer orders, pander, book titles, nice thing, technical titles, bookseller, stocking, brand name, impulse, giants, bookstore, earnings, reputation, third party. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback. |
4 Responses to “What big Amazon already does”
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Hello! I wanted to point out that my article was titled, “What Small Bookstores Can Do”, and does _not_ talk about competing with Amazon.com — in fact, in several places I pointed out that small bookstores simply cannot compete with Amazon.com or Barnes & Noble, and instead must make business changes to fill a void that Amazon and B&N cannot fill in an efficient way. You seem to think that imitating Amazon.com is the way for small business to survive, when Amazon has an entirely different business model than the mom-n-pop bookshop can possibly attempt to imitate. Amazon is place-less, devoted to wide inventory at cut-rate prices; mom-and-pops have a Place, an environment for customers to go to and touch the items they’re looking for & see other humans & ask questions of an actual employee on-hand. The two are seperate business-types, with only books in common.
Actually, I think that Amazon.com is inimitable. A small bookseller cannot compete with them on traditionals–i.e., selling books. Instead, a small bookseller will need to do something else, perhaps sell extremely rare books or niche books to survive.
As for what your article is about, I quote:
So, your article is exactly about helping small booksellers compete with Amazon through the ten or so bullet point steps you have there. All I’m doing here is pointing out that some of the items you think will help a smaller bookseller get an edge over Amazon.com, Amazon.com already does far better than a small seller can.
I, too, believe Amazon.com is inimitable; that’s why my tips aren’t parallel to Amazon’s activities. “Remaining viable when challenged by Barnes & Noble and Amazon.com for their products” does not equal “do what Barnes & Noble and Amazon.com are doing” — “remaining viable” simply means being able to make a profit and continue doing business. I’m suggesting bookstores can adjust their own business to increase sales enough that they’re not struggling anymore — it’s about how to make an extra ten sales a day so that a bookstore has an extra $1,000 of income every month while cutting $500 in expenses. That’ll make the difference between a sustained bookstore and one that’s losing $15,000 a year. It’s the difference between 2 part-time employees and 4 part-time employees. It’s the difference between 7-day-a-week-operation and closing early and on weekends during the summer to save costs. To a small business, it’s the difference between life and death; Amazon.com is a competitor, but it’s no basis for how to run the business itself.
Your comparisons to Amazon.com don’t explain why my ideas can’t improve a bookstore’s bottom line; why can’t small bookstores possibly hope to build their reputation with a single buyer? Why will every customer choose to buy used books at Amazon sight unseen and wait for shipping times instead of at a bookstore? Why is the only path for a bookstore to parallel Amazon.com’s business or die away? Just because they can’t sell as much as Amazon or have the same reputation doesn’t mean they can’t improve sales by 3%….again, small margins, but it’s the difference between an open bookstore and a failed bookstore.
Just an outside commit from an observer, there seems to be a battle of egos going back and forth on your comments. What you guys are talking about is essentially two completely different models. When the creator of Amazon.com (forgive me him name eludes me at the moment) established the business he strived to create a business distinctly different from that of an in store experience. Personally, although I spend most of my days online and have bought multiple products online, have not purchased more than 5 books online, if that, among the hundreds that I own. I enjoy the thrill of handling books, wandering around for a specialty book store or stopping at a big book bookstore just to be surrounded and enveloped by the books. In summary each store, online or in person, carters to a different consumer experience and that like any retail business is where the money is made. Despite the perhaps choice of bad words I found the initial article to be thought providing and inspirational.