Investing in community

Reasons to value independent bookstores

Over the weekend Ron Charles, a respected book critic at The Washington Post, reported on his participation in a three-day event organized to help save Kepler's Books, a Palo Alto bookstore. The meeting was motivated by Praveen Madan, a San Francisco bookstore owner who wants to refashion Kepler's as part not-for-profit, part community-owned operation.

Charles' reports appeared the Post on Friday, Saturday and Sunday [registration required]. Read in sequence, they give a sense of the love, fears and frustrations that can accumulate when we talk about sustaining an independent bookstore.

One of the recurring fears and frustrations is Amazon. Writing about his experiences on the first day, Charles describes a woman who, when "referring to a friend who orders books from Amazon ... grew so angry she couldn't finish her sentence." In his description of the second day, Charles writes:

"The challenge, of course, is He Who Must Not Be Named: Amazon.com chief executive Jeff Bezos. The Internet retailer has driven hundreds of independent booksellers out of business in the past decade, first by undercutting prices on physical books and then by popularizing e-books, which indie bookstores haven’t been able to sell effectively."

Amazon's stance on paying state and local sales taxes is certainly a sticking point, but that is a position that a wide array of direct marketers have held for decades. It's useful to remember that the company's ability to negotiate discounts from publishers starts with publishers.

The discounts that Amazon receives are used to lower prices for consumers. As I wrote last week in my response to an op-ed by U.S. Senator Charles Schumer, arguing that consumers "should" pay more for the same product or service is not a strong starting position. If price is not an option, meaningful differentiation is required.

At the end of three days, the group identified what it called "eight foundational principles and activities." These were:

  1. Be financially sustainable.
  2. Have a clearly defined mission.
  3. Be dedicated to community outreach.
  4. Serve as a gathering place for creative events and social events.
  5. Support life-long learning and literary education.
  6. Sell books in any form, on any platform.
  7. Maintain a virtual presence, with technology fully integrated into the store.
  8. Provide a carefully curated selection of books

Of this list, a buyer for Kepler's said, "When I look at these ideas, they're wonderful, but I don't see anything new." That response may be a bit unfair, as a lot of conversation and detail underpins summary statements like these.

But I do think there's a problem, not with the business model, but the "community owned and operated" framework that Madans required the group to use. According to Charles, "Madan insisted that if the community didn't feel invested in Kepler's, it would fail again."

Here, I think the tactic leaves the arrow pointing in the wrong direction. In talking about a "commmunity owned and operated" store, Madan means locally-held stock. While equity is nice, its use here is usury: "We'll lock you into using our store, because if you don't, your shares will be worthless."

That's no recipe for success, as other cooperative bookstores have found. Rather than plan financial mechanisms that try to get the community invested in Kepler's, the store might focus more plainly on things like principles 3, 4, and 5 (above). Remaking themselves as a business that is invested in and provides value to its community feels a lot closer to a sustainable strategy.

 





Posted by Peter Turner
Aug 04, 2012  at  09:05 AM

Sell E-Books, Platform Neutral

While some of the folks at Kepler’s 2020 were open to the idea, the general attitude among indie booksellers is to do whatever they can to discourage their customers from buying e-books from Amazon. While the American Booksellers Association is looking to field an e-book solution to its members soon, I don’t think anybody believes that the solution will be good news for existing Kindle customers (70% of the e-books market, or is it more now?). Why can’t indie booksellers acknowledge Kindle’s market dominance and serve its customers with easy ordering in-store and via indie bookstore websites, securing an affiliate fee.

Sell More Books

So much of what I heard at Kepler’s 2020 (and elsewhere) was focused on how to raise revenues in ways that don’t have much to do with selling books. Instead it seems to be all about:

More events (in store, for a fee)
More non-book items
More serving of self-published authors for a fee via the Espresso Book Machine or some other POD solution
While there’s nothing wrong with any of this, I have to ask if it’s really wise for bookstores to plan to survive by selling something other than books. Isthat really the future of the bookstore? Indies’ main strategic partners are publishers—who have a vested interest and commitment to supporting this influential sales channel. But as the cost of servicing the indies goes up and up, bookstores need to focus on delivering value to publishers—selling the same or fewer books while focusing on other revenue streams, bookstores aren’t going to serve that strategic partners.
I was able to attend the Kepler’s 2020 event. I posted about it on my blog, but in brief I’d say it was intensive, passionate, intelligent, and ultimately profoundly disappointing.

The main take-away for me was how little thought was given to selling more books as a key to the future of bookstores. Instead, most of the talk had to do with more events (for a fee), more non-book items, and servicing self-publishing authors. Is that really the future of the bookstore? It sounds more like a plan for books as wallpaper.



Posted by Brian O'Leary
Aug 04, 2012  at  10:26 AM

Thanks for providing a first-person perspective on the discussion. The reports filed by Ron Charles (the links in the original post) clearly captured the extent to which at least some participants hoped Amazon could be stopped. I don’t think there was any reporting on what ABA (which represents booksellers) could do to improve booksellers’ competitiveness. Even if a solution is forthcoming, setting up relationships that earn affiliate fees in the meantime is worth considering.

I think there are opportunities for independent bookstores to do things that enrich the local community in ways that Amazon and others cannot. Seeking out and featuring local authors is an example. Developing communities of interest around specific topics is another.

I live in a community where a local independent bookstore includes autism among its interests. The owners have a personal connection and commitment, and they feature related content and speakers and try to employ adults with autism. I don’t think they do it to “compete”, but their commitment distinguishes them in a market that has both big-box and online options.

There probably isn’t one model, but (as I said here) trying to guilt people into buying books locally seems like an unsustainable strategy. In 2009, I wrote a brief post linking to an article by Jason Pontin, editor of Technology Review. Evaluating the state of periodical publishing, he said, “Neither resentment nor hope are business strategies.” It’s tough love, but I think it’s true for bookstores, as well.

The Pontin post is available at http://bit.ly/RxNtNa



Posted by Peter Turner
Aug 04, 2012  at  01:17 PM

Totally agree that guilt isn’t a business strategy.

A couple of additional points. I’ve encountered almost no bookseller who feels good, or even okay, with benefiting Amazon in exchange for an affiliate fee for a Kindle sale initiated in-store—though it’s an idea I’ve pressed. Some very fine bookstores I know are even uncomfortable with selling eBooks at all, from any platform, because they fear they’re driving customers away from print to eBook format (though I don’t think there’s any real data on this).

Most booksellers report that their in-store events don’t drive sales and that many events lose money (this is partly why Kepler’s wants to peel off this part of their business, and make it not-for-profit). And booksellers can only charge for marque author events.

Thanks for the post and the reply.

(Apologies, by the way, for the previous, garbled, comment; I made the mistake of cutting and pasting from a word doc before having my coffee this morning.)



Posted by Brian O'Leary
Aug 05, 2012  at  10:26 AM

It may be naive of me, but in-store events that don’t lead to revenue (whether immediate or longer-term) seem like luxuries. Maybe they aren’t the right events.

Your comments here are helpful, not at all garbled, and I’ve used them as a starting point for the post that went up this morning.



Commenting is no longer available for this article.