Will Independent Bookstores Be the Last Ones Standing?

by Kent Bernhard, Jr.

Portfolio.com

It seems like we’ve seen this movie before, or more appropriately, read the book.

Barnes & Noble, the nation’s biggest bookselling chain, announced Tuesday that it’s trying to sell itself. The chain, which once dominated the bookselling scene, has come under increasing pressure as retailers like Wal-Mart have undercut it in the print book game, and Amazon.com and Apple are bringing more and more electronic books to their tablet devices. 

Amazon has the added advantage against its competitors of not collecting state sales taxes, allowing it to undercut competitors like Barnes & Noble.

The financials offer a clear rationale for wanting to sell. The company’s market value is now at more than $700 million and its shares have plunged nearly 37 percent since June (although they did get a nice bounce on Tuesday after the news of a potential sale first surfaced).

As mentioned, it’s a familiar story. New business models and modern technology put pressure on a slew of once-dominant players in an entertainment space. It’s happened to Blockbuster on the movie rental front as NetFlix‘s radically different business model and delivery of new movies to consumers’ screens from cable companies have apparently triumphed. It happened in a big way to record store chains like Tower and Virgin as technology changed and consumers started buying their music digitally.

But do these stories leave an opening for small businesses? Take record stores. They’re still around, but many of the ones that are thriving are the small mom and pop shops that have carved out a special niche, namely selling used CDs or that old stand-by vinyl.

And as competition in the mass book market from e-books, and traditionally bound books delivered by Amazon.com, heats up, is there room for a similar development in the book market?

There may well be, said Hut Landon, Executive Director of the Northern California Booksellers Association. Independent operators have at least a couple of advantages.

“This whole shop local movement that is going on around the country. It’s a movement that has really caught steam. That’s something we’ve got that Barnes & Noble and Amazon don’t have,” Landon said.

As small businesses, they are generally better at responding quickly to economic trends than their larger brothers. They’ve also been used to competing with players who might have more pricing power than they do, thanks, ironically, to the longstanding presence of the chains like Borders and Barnes & Noble.

And there are intangibles, Landon said.

Is the time of the independent bookstore—that almost mythical place that caters to a niche not easily found elsewhere, or deals in used books, and is run by, yes, book lovers for book lovers—likely to be the last bookstore standing?

Read more: http://www.portfolio.com/views/blogs/entrepreneurship/2010/08/04/will-independent-bookstores-be-the-last-bookstores-standing#ixzz0xxwii3B4

Leave a Reply

Your email address will not be published. Required fields are marked *