Book retailing

Ever since I was on the 2006 Competition Commission inquiry into the takeover of bookstore chain Ottakars by Waterstones, I’ve been interested in the book retailing business. This week brought news that Penguin Random House have created an online store, My Independent Bookshop, to compete with Amazon. A small proportion of every sale goes to a nominated independent bookshop.

The site hasn’t yet launched so it isn’t possible to compare prices or efficiency of delivery. It will be hard to match Amazon not only on price but also on range, logistics, and the attractions of Prime membership (albeit less attractive since the huge price rise) and the associates programme.

The ironic thing about this venture by the publishers is that when the takeover of Ottakars was under debate, they argued vociferously to us that we should not allow the removal of one physical retail chain on the high street, given the fact that Amazon was destroying the livelihood of the independent stores. What I never fully understood was the publishers’ own short-termism: they told us they wouldn’t accept a lower margin on their sales to the independent stores – which are more costly to deliver books to. So they themselves helped bring about the large online price advantage. If they had seen a lower margin as an investment in their future shop windows, we might not have lost so many small retailers.The Publlishers Association representatives who attended the hearing – I can see the row of dignitaries in my mind’s eye – didn’t understand the point we were trying to make about them facing a strategic choice. We gave the merger the go-ahead.

Still, I wish the new site well – more competition  for Amazon would be good. (The links on this blog are all to the Amazon site because of the associates programme. It brings in £30-50 a month which helps buy other books and pay the occasional guest reviewer.)

One thought on “Book retailing

  1. Of course, they will certainly be able to compete with Amazon on ethics. Book buyers are not completely homo economicus… Which is why, I assume, they have folded in the bonus to the independent bookshop.

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