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Published: Wednesday, 11/1/2000

Price boosts by online bookstores level selling field for local vendors

BY JANE SCHMUCKER
BLADE BUSINESS WRITER

Bestsellers such as Harry Potter and the Goblet of Fire are where small bookstores often take their biggest hits.

The book aimed at late-elementary and middle-school children sells for 40 per cent off the list price - $15.57 - plus shipping at Amazon.com and Barnes & Noble.com on the Internet.

It sells at 30 per cent off the list price - $18.17 - plus sales tax at Thackeray's Books in Westgate Village Shopping Center. And at Reading Railroad in Sylvania, it goes for the full list price of $25.95, plus sales tax.

But for other hardcover books that aren't best sellers, some dominant bookstore chains no longer offer discounts.

Barnes & Noble and Borders have quietly raised their prices recently. So have the online stores Amazon.com, Barnesandnoble.com, and Borders.com, just a year after their discounts of up to 50 per cent on best-selling books escalated the price wars to new levels.

As a result, consumers everywhere are paying more for books. Growth in book sales, already sluggish, is likely to suffer from the sharp increase in retail prices.

But independent bookstores, bloodied by 15 years of competing with deep-discount chains, aren't complaining.

“We just can't compete with Amazon.com when it comes to those kinds of discounts, so we've never done it,” said Diane Routson, co-owner and general manager of Thackeray's.

She said she thinks some customers browse books in her shop and then go home and order them over the Internet at lower prices. She said she considers Amazon.com her store's biggest competitor.

But Amazon.com has a well established name and she said she was uncertain how its reduced discounts would affect her business.

“It will depend how the public reacts,” she said. “It's very hard to take things away from customers. They do not like that. It's going to be interesting now. If Amazon can get away with it by increasing things gradually, they will maybe be OK.”

The long-awaited Harry Potter book, which was widely sold at 40 per cent off during the summer, gave Reading Railroad, which never discounts books, its strongest competition yet, manager Marcia Kaplan said.

Usually, the children's bookstore's biggest competition, she said, is school book fairs and book clubs that sometimes have the sole rights to paperback versions of popular books.

But making the business tougher across the board is what Ms. Kaplan perceives as a lower demand for books.

“I don't think people are reading as much as they used to,” she said. “They're playing with computers and watching television more, and the parents are so busy with their lives it's easier to say, `OK here's a new game.'''

This summer, as investors battered its stock, Amazon.com raised all its book prices, according to publishers' sales executives. Its prices this month went up 10 per cent across the board, with slower-selling titles having no discount. Other online stores followed suit.

The price increases are a notable reversal for Amazon.com. The company had suggested that the economics of selling over the Internet - no store rents, no store clerks, better inventory management at central warehouses - permitted high-volume online stores to maintain steeper discounts than their brick-and-mortar rivals. As recently as June, an Amazon.com spokesman, Bill Curry, said the company did not need to revise its prices to be profitable.

That changed, however. Early this month, he said, “Price is important, but so are selection, convenience, and service.”

The price increases mean that many books are now more expensive online than at the cover price in a traditional store. Amazon.com and other online booksellers charge about $4.50 for shipping the first book and about $1 to ship each additional book. The shift means that, including shipping charges, only hardcover books with cover prices above $22.50 are as cheap online as they are at full price in a traditional store, excluding sales tax. Last year the break-even price was $15.

Customers need to order five or more paperbacks at once to make an online purchase less expensive than if they paid the cover price in a store. As a result, publishers say, hardcovers already sell better than paperbacks at online stores.

Even the big bookstore chains have changed policies.

Last year, Barnes & Noble, whose 550 superstores and 380 B. Dalton stores account for one-fifth of the U.S. consumer book market, sold the 15 fiction and 15 nonfiction hardcover books on the New York Times best-seller list at 30 per cent off the cover price. Its superstores sold the rest of its hardcover books for 10 per cent off the cover price.

But this spring, Barnes & Noble shifted to discounting its stores' own best-sellers list and scaled back its list of 30 books to 20. And the chain dropped its 10 per cent across-the-board discount on almost all hardcover books.

Barnes & Noble typically marks down fewer than 150 of the roughly 150,000 titles in its superstores, and usually stacks these near the entrance to create the impression of low prices.

New York Times News Service contributed to this report.



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