The War of the Booksellers

by Rachel Baker on October 21, 2009

In this economy, people are looking for the cheapest way to buy everything for everybody on their Holiday gift lists.  Consumers are looking for the best options for the lowest amount of money.  At the end of October, in a normal economic year, we tend to see price reductions as big companies are preparing for holiday sales.  This year, the price reductions are becoming full on price wars. Interestingly, the battles are seeping into the book sales industry.

The battle flared Thursday when Walmart advertised the price of $10 for some upcoming hardcover books including Stephen King’s “Under the Dome.”

When Amazon matched the price, Walmart cut its cover price to $9.

The Wall Street Journal has been all over the Walmart siege, reporting in September that the mega-retailer had started selling products from smaller businesses on its website . According to The WSJ, Walmart wants to be the No. 1 visited site on the Internet.

After Walmart shaved its book prices by a penny, Amazon again matched. And the battle has shifted to low-cost delivery, with Walmart expanding its 97 cent shipping.

…and apparently Target and Sears are getting in on the fun.

Its taken Amazon years to become the online bookstore people have come to trust. Walmart is a superstore that specializes in nothing. While you can buy almost anything you want from Amazon, the specialty is books – and you can get really well-written reviews on a book of interest before you buy.

Amazon also allows for books to be sold by mom and pop bookstores. Walmart doesn’t appear to be doing that…yet; but I’m sure they will set up some sort of affiliate program with some outside (of Walmart) book stores.

Here’s my question: if you are going to buy widgets, don’t you want to purchase them from a widget store and not a clothing store?

When I buy from Amazon, more often than not, I actually buy the book I’m interested in from a smaller book store that also offers the book (the new/used link shows you that). Here’s why, small bookstores are run by real people who, like me, love books. They have taken something they love and turned it into a semi-profitable venture. Book store owners love their jobs. They love the environment they’ve set up and by and large, they love their customers. They must because if you are a small mom and pop book store, you probably lose money on your inventory more often than you make it.

Walmart does have the one stop shopping advantage. This doesn’t mean you are getting the best experience you might if you purchase from a store that specializes in the item you are thinking about purchasing. Everything you could possibly want to purchase for holiday gifts is on Walmart.com, and you wouldn’t have to pay for extra shipping.

But let’s look at something for a second. We are constantly being told the way to better our economy is through the middle class and small businesses. At this point in our economy, small businesses are going out of business faster than you can say small business. If stores like Walmart are offering lower prices than mom and pop can, there’s no wonder they are going out of business. Stop to consider why it is that Walmart can offer a best seller like Ted Kennedy’s True Compass for $17.00 and not the $35.00 you get everywhere else. Stop to consider what type of employment practices they have. Stop to consider how much based on the employees they have do they spend on human resources items like wages and benefits. They don’t pay alot to the people in foreign countries who are making the products they sell, nor do they pay out adequate benefits to the average employees at distribution centers and their stores across our country.

How does this translate to $17.00 vs $35.00 for a book? Walmart can afford to take the loss short term, because they buy in bulk and they are paying less in other areas. Even if they lose money on the books, they make up for it in other areas.

I would bet dollars to donuts, these prices won’t last. In my opinion, this low cost bestseller ploy is a Walmart trend that only has the one stop shopping advantage going for it. Right now, they have approximately 200 books on their online book area. Amazon has 2M actual books and 3k electronic books. Walmart will have to increase their inventory greatly to even come close to Amazon’s. Further, as the inventory increases, they will begin to lose profit on books they purchased and will have to increase the cost so they can make this worthwhile for them. Over time, I would venture the prices will increase. If they are battling Amazon for the lowest costs, they will be able to continue to do so, but the price of a best seller will most likely not be $9.00 in the future. At some point, Amazon should make a decision to “stay put” on their costs and ride out the Walmart storm. Their niche audience are people who read – and I would bet could be classified as avid readers. Just like Barnes and Noble’s niche market are readers who like to drink specialty coffee and feel the books before they buy them. Walmart’s niche audience are people who want a better deal. True readers walk by the book area at Walmart and look at what’s on the shelves, but rarely purchase a book – unless its a children’s book from the toy area. Seriously, go to Walmart, how many people do you ever see in the book section?

Is it good to have competition? Of course, that’s part of the debate going on with health insurance reform. However, there are multiple options for purchasing books. Amazon, Barnes and Noble, smaller book stores, book mega-marts, and the list goes on, including the print vs electronic book issues created. Are their issues between big book stores vs small book stores? Of course their is – we all saw “You’ve Got Mail.” Walmart having rollbacks on their books is just one more way for them to “own the empire.” Sure they are offering their customers better books than ever before – and they are. For the first time in a long time, they are offering more than just the mass media published books that are cheaper to purchase, not as well made and by people you’ve heard about. However, they are continuing their quest to put mom and pops out of business, especially in an economy where is much easier to buy from Walmart because you save a large amount of money when you do vs going to a clothing retail store, a grocery store or an electronics store.

As an informed reader, you will never find me purchasing a book from Walmart. You will rarely find me purchase a book directly from Amazon and not one of their mom and pop affiliates. I do understand in this economy we have to penny pinch; and I do understand this holiday season is going to be tight for a lot of people. Buying books from Walmart.com isn’t going to help your financial situation all that much, because you aren’t going to just buy books – you will end up spending a whole lot more money than you would have originally spent because of that one stop shopping ploy they offer.

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