|
WALMART/AMAZON PRICE WAR
A THREAT TO PUBLISHING’S FUTURE?
I’m not one of those “doom and gloomers” who interprets every shift in the way our industry conducts business as its death knell, but this latest price battle initiated by Walmart and the response from Amazon gives some real cause for concern.
If the two contestants were average retailers who mounted a loss-leader promotion now and then, I’d have little concern. But both have enormous capital that can allow them to absorb losses for an extended period of time and/or over a fairly wide assortment of titles. They have thriving income from a vast variety of non-book merchandise they sell.
As these behemoths seek to gobble up book revenue, the losers are the courageous independent booksellers who love books and are dedicated to serving a public equally devoted to reading. Indies can’t possibly compete in price wars.
At best, Indies can offer reasonable discounts, and they do. But not loss-leaders, as they are called in the retail world. The discounts that run from 69% to 74% in this price war mean that the sellers are actually taking a substantial loss on every book they sell.
Walmart is a predatory beast, crushing traditional local retailers and putting them out of business wherever it decides to locate. It has violated labor laws while posing as the true red, white and blue American business as it orders merchandise from sweatshops in foreign lands.
Discounting can be a healthy element of retailing in a capitalist society; predatory selling at a loss is lethal and undermines free enterprise by devouring competition and forging monopolies.
It is true, of course, that our industry is now in a period of re-evaluation. The print segment of publishing is scrambling to find ways to accommodate the growth of online readership. That’s legitimate and healthy, albeit a very difficult transition.
The book segment is reeling from the burgeoning popularity of the e-book. That’s progress based on technological advancements. But it provides a level playing field. Yes, overall sales volume
will decrease because the retail price is so much lower than it is for hardcover print books. But the profit will not only remain equally high, it may even increase because production costs are so minimal.
All of that is very different from the possible consequences of allowing a Walmart to undercut and destroy one of the nation’s most valued industries.
Technorati Profile
|