Digital change: what’s an independent bookseller to do?

Posted by Mike Shatzkin on May 5, 2009 at 7:23 am · Under Community, General Trade Publishing, New Models, Publishing, Supply-Chain, Vertical, eBooks


The question of how to plug the independent bookseller into the digital revolution is a knotty one. Nobody has really “solved” it. 

Two of the smartest guys in the UK, Francis Bennett and Michael Holdsworth, tried to tackle this question in a report for the Booksellers Association in a report published in 2007. While they touched on a whole host of issues, including that publishers are likely to sell digital downloads direct, they really didn’t manage to come up with an action plan for the individual bookseller. Rather, they focused on the need for booksellers and publishers to join collaboratively to solve the problem: start with a public conference, create standards, form a joint trade working party. This is, at best, a path to an answer.

From this I conclude there is no ebook-centric answer. If there were one, these guys would have found it.

Then, three weeks ago, PW did a story headlined “Indie Booksellers Debate the E-book Conundrum”. This article introduced a product/technology called Symtio, which stores (among them Tattered Cover) use to back into ebook revenues. Symtio is a plastic card, sold at a retailer, which entitles the bearer (gift recipient) to download an ebook, an audiobook, or both from Symtio’s web site. If this strikes you as something less than the perfect ebook solution for retailers, you’re seeing it the way I do.

The ABA plans to work ebooks into Indiebound. Len Vlahos calls it a “focus for the immediate future” in a white paper presented to the ABA Board. Ingram Digital offers access to 150,000 ebook titles to independent stores. And stores such as Vroman’s are quoted as enthused about the potential for them with ebooks.

Dick Harte, however, who runs BookSite, which provides Web hosting for booksellers and librarians, doesn’t agree. Not only were ebook sales low on the BookSite platform, often they were erroneous purchases (people thought they were buying a printed book!) which then required a customer service intervention. One particularly far-sighted bookseller quoted in the article is David Didriksen who sees ebooks as very low-margin transactions not worth the effort.

I agree. What distinguishes what independent booksellers offer: local taste and judgment, personalized service, intimate customer knowledge — these things just don’t provide much competitive advantage in the ebook space. And the competition isn’t just Amazon and B&N either.

So independent booksellers need to look elsewhere to participate in the digital revolution. I tried to sketch out a strategy in a previous piece:

1. Set yourself up (probably with Ingram) in the simplest way you can to be able to sell as many titles in as many formats as you can. That is, get the maximum choice you can for your customers with the minimum hassle and investment for you.

2. Don’t expect to make money selling ebooks: consider it an accommodation to your customers to keep them buying physical books from you. Restrain yourself from investing large amounts of labor improving your ebook presentation past the point of acceptable. If the margin from your sales starts to amount to something, you can do it then.

3. Spend all of energy that you might have wasted perfecting the sale of ebooks on social networking, trying to be in direct contact with your customers through Facebook, Twitter, and through postings on popular and well-read blogs in subject matters your store specializes in. Particularly focus on the opportunities to promote to specific groups, such as through hashtags (#s) on Twitter, which identify groups of people interested in a particular thing.

I neglected to add a fourth, very important element of an indie bookseller’s digital strategy, although it is hinted at in the marketing suggestion above. This one is the same as it is for general trade publishers: get vertical!

The bad news about digital change is that it brings the biggest companies in the world — Amazon, B&N, Apple, and every phone company — into the indie bookseller’s back yard. But the good news is that it also brings every customer in the world into that back yard. So a bookseller with a vertical specialty can build a global market. This was the pre-Internet strategy of CEO-Read (originally 800-CEO-Read; if Bezos had invented Amazon ten years earlier he would have chosen a 7-letter name…) They’re business book specialists and their customer base is truly international.

Independent booksellers need to build a reputation within vertical niches. That’s a matter of having the stock, having the knowledge of the vertical subject, and then getting involved in the vertical communities — blogging, commenting, tweeting, reaching out. The bookseller’s web site, if it has good content properly tagged, can rapidly be discovered for relevant searches. Tattered Cover may not be able to beat Amazon at everything, but they should beat them on searches for Pike’s Peak. A northeastern store that specialized properly could come up ahead of Amazon in a search for “autumn leaves colors” or “historical sites Boston”. (By the way, I just checked, an no bookstores come up in the first ten pages of “historical sites Boston”!) 

In just the same way that general trade publishers need to use the time they have left when “general trade” still works to build vertical presences that will last beyond that time, so do general trade bookstores. It will work for Barnes & Noble to be “general” for far longer than it will work for any local store. The trick is to be World Class at something, most likely something that has a local root will make the most sense.


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  • Mike,

    On the pricing issue which could bring down the existing industry model, not just indies, the example I use is mass market paperbacks. Certainly publishers are capable of creating and releasing the mass market paperback at the same time as the hardcover. They choose not to do so for obvious buiness reasons. The same consideration should hold for e-books. When only the hardcover is released, the hardcover pricing should be followed for e-books as well, when the paperback is released, then the e-book pricing could be lowered without cannibalizing their distribution channels.

    As for Lightning Source / Expresso I share your concern, I just think it fits the role and is 10 times more likely than e-books to pay for itself with indies. The safest bet is audiobook downloads at the store.

    As for twitter et al for marketing, there is a certain sequencing quality to your suggestion. We all have to start digitizing somewhere and once established, expand from there. Maybe Vroman's and Tattered Cover are beyond the rest of us. I just think the regular Main Street indie needs to do more establishing, even if it isn't as much fun, before devotng their resouces to other options.

    Dick
  • Dick,
    As I'm sure you know, there certainly are publishers who follow the protocol you are suggesting: adjusting the ebook price to be somewhat compatible with the currently available printed edition. I think many go for a buck or two under the current print book rather than exactly the same, but these publishers are with you in principle.

    But in the medium term, I think this will shift in ways you won't like. I believe publishers will see the light and cut the discounts for ebooks from the current practice of making them the same as they are for print. When they do that, they will also be able to cut the ebook prices substantially and still maintain margins equivalent to what they get now for print. This will reflect the lower marginal cost to publishers and retailers of executing an ebook transaction. But it will not reflect costs you are conscious of, such as the set-up costs for a parallel business.
  • Hi Mike,

    Thank you for including part of my address to our users on digital opportunities in your well reasoned article. I do admit to being skeptical about indies role with e-books and agree with David, it isn't worth the effort. But I am even more skeptical of the spin on e-books in general. I have had the luxury of seeing them in (in)action.

    Here are the other 5 points left out: 1. e-books are bad for all mainstream releases if it requires discounted pricing to lure consumers away from established retailing, which is nothing more than a cover for preferential pricing for Kindle, (2) they are great for non-mainstream publishing that extends OOP dates and introduces self publihsed authors, a small market not feasible for indies, (3) it requires an upfront investment that gets overlooked until it is time to pony up.

    The most important point of all (4) there are other forms of digital delivery that have a much better chance of working such as downloadable audiobooks and in-store print on demand befitting the value indies bring their customers.

    The fifth point, strays in a minor degree with your article. I just thnk Indies should pluck the low hanging fruit before chasing new tech fads until they are proven. I see tremendous opportunites for indies to improve their store sales through simple, established, but largely ignored, marketing techniques like building subcriber lists and creating interesting e-newsletters. They can use technology to collect author and publisher promotions automatically via digital distributions.

    Dick
  • I am not sure I agree with your first point. While there is little question that ebooks are creating downward price pressure, I don't think a retailer avoids that effect by avoiding ebooks. In fact, they might suffer worse by ignoring them because then the customer that wants that lower-priced option is forced to shop at another site. But I believe, on balance, that the very low margins, costs, and operational distractions outweigh the benefits of being able to offer low price points.

    And on your last point, I am suggesting that modern tools (Facebook, Twitter) can be helpful in offering that direct-to-consumer contact that you're saying should be accomplished with emailing lists.

    I think the jury is still out on in-store POD (Espresso.) If there is a future in it (and there may well be), it will be more about enabling local self-publishing than it will be about delivering IP otherwise not available in the store.
  • Great discussion but I would just like to make a small correction. Tattered Cover does not carry Symptio cards, there was talk of it happening but as of yet it has not occured. The Tattered Cover does have ebooks for sale on their website but there are still limitations. The only formats available on the website are Adobe, Microsoft, and Palm. So if you have a Kindle or Sony eReader you are out of luck (through TC anyway). Which brings up another concern with ebooks, whether they are published with proprietary formats or open source formats, but I suppose that is for a different discussion.
  • Chuck: thanks for the clarification and kind words. Yes, those proprietary formats are another reason I wouldn't advise an indie to get too deep into the ebook business. There's no way around that problem.
  • I particularly appreciate your fourth element, "become vertical", and I would like to underpin one aspect in this thought, which is "become a community leader":

    I believe in the universal truth that people want to buy from their community and in their community - a fact which has nothing to do with eBooks and works for nearly everything. A community simply establishes a network of trust and confidence. This is virtually true in the Internet, where everybody is an environment which is basically the opposite.

    A week ago, I read a study which said that people already spend more time in communities than in any other place in the Internet and the trend is that this will increase. The study also said that the overall time which people spend in the Internet is not growing; this simply means that people will spend even more time in communities than in other places, and this means that this is the place where independant booksellers have to be and where they can have their advantage - if they establish their unique competence, their brand, their vertical market there. It is very much the digital equivalent to the nice, little and competent bookseller around the corner, but now around the digital corner. Clearly, this is not easy for an independant bookseller (maybe worth a blog on "how to become an accepted member of a digital community").
  • Gregor, I am very intrigued by the recent data you saw since it confirms what I've been saying about vertical development on the Internet. I think the blog you suggest will, oddly enough, be the subject of some strong-selling BOOKS in the years to come!
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