Bookshop Versus Goliath, aka Amazon

Amazon can afford to take a loss on books. Small independent bookstores cannot. Illustration by Owen D. Pomery; Source photograph by Danny Caine

We have respect for any merchant who takes the time, and has strong logic on their side, to explain why their prices are not as low as Amazon’s. Any time the opportunity arises to read Casey Cep on the subject of bookshops, take it; especially when she is writing about a bookshop’s pricing relative to Amazon’s. Be sure to read far enough to where she touches on the impact of on the marketplace for books, which on its own makes reading this essay worth the time:

A Kansas Bookshop’s Fight with Amazon Is About More Than the Price of Books

The owner of the Raven bookstore, in Lawrence, wants to tell you about all the ways that the e-commerce giant is hurting American downtowns.

If you know anything about the Raven bookstore in Lawrence, Kansas, then you know that it charges more for books than Amazon. Advertising higher prices is an unlikely strategy for any business, but Danny Caine, the Raven’s owner, has an M.F.A., not an M.B.A., and he talks openly with customers about why his books cost as much as they do. Two years ago, he took that conversation to social media, using the store’s Twitter account to explain why the Raven was charging twenty-six ninety-nine for a hardcover book that a customer had seen online for fifteen dollars. “When we order direct from publishers, we get a wholesale discount of 46% off the cover price,” Caine wrote. “Our cost for that book from the publishers would be $14.57. If we sold it for $15, we’d make . . . 43 cents.” Caine estimated that, with an inventory of some ten thousand books in the store, on a profit of less than fifty cents a book, the Raven could afford to stay open for about six days.

Amazon has a much larger inventory—not only of books but of other goods with much higher profit margins—as well as many other revenue streams. The company can afford to take a loss on books. “If you’ve ever wondered why it seems like ‘there are no bookstores anymore’ or why retail businesses keep closing in your downtown, this is it,” Caine wrote. The Raven can’t afford losses like Amazon, but almost every dollar that the store makes stays in Kansas: after the publisher’s cut, half of every book sold goes directly to employee wages; the other half goes to rent, marketing, and other operating costs, including store maintenance, the Web site, and food and veterinary care for the Raven’s most famous employees, the cats Dashiell (as in Hammett) and Ngaio (as in Marsh).

Caine’s posts were amplified by other bookstores and applauded by booksellers. After readers shared them widely, he compiled them in a zine called “How to Resist Amazon and Why,” adding an open letter to Amazon’s C.E.O, Jeff Bezos, and directing readers to other essays and articles on the business practices of the world’s second-largest retailer. The zine sold more than ten thousand copies. Caine has now published an expanded version as a book, which arrives at a critical moment for independent stores like the one Caine runs.

Despite the pandemic, book sales were up over all last year, but mostly for places like Amazon; bookstore sales fell by more than twenty-eight per cent. Even at stores where sales held steady or increased, profits declined as customers migrated online, raising shipping and delivery costs. More than one bookstore closed every week in 2020, and many of the ones that survived are now facing deficits that could close them before the pandemic ends. As Caine suggests in his book, preserving small-time retail will likely require stronger antitrust enforcement. But, in the meantime, the fate of bookstores and many other small businesses depends on the willingness of consumers to agree with Caine’s broader argument: that cheap goods have higher costs than we realize, and that paying more is a better investment than we think.

Midway between Topeka and Kansas City, Lawrence has one of Kansas’s most distinctive downtowns. The Raven sits on Seventh Street, half a block off Massachusetts Street, named in the eighteen-fifties by the nostalgic organizers of the New England Emigrant Aid Company, who had come west to oppose slavery and then arranged for other abolitionists to join them in the years before the Civil War. Lawrence was defended by John Brown and his allies during the Wakarusa War of 1855; ransacked by pro-slavery forces the following year; and then razed by so-called Border Ruffians, from the neighboring slave state of Missouri, in 1863. The history of the conflict, which became known as Bleeding Kansas, is marked around town by brass historical plaques and exhibits at local museums, as well as the John Brown license plates that adorn cars along Massachusetts and the other streets that run south from the Kansas River.

More than a hundred local restaurants, coffee shops, stores, and galleries line those same streets. A nonprofit has advocated for these businesses since the nineteen-seventies, lobbying for civic improvements to keep the downtown safe and accessible for pedestrians, organizing opposition to a corporate shopping mall, decorating the street lamps for holidays, and helping to put on a busker festival, a hot-rod hullabaloo, homecoming parades, and zombie walks. The Raven is in the same building as Liberty Hall (part independent movie theatre and part live-music venue), just around the corner from the Free State Brewing Company and a block from the barbershop where William S. Burroughs used to get his hair cut.

The Raven was opened, in 1987, by Mary Lou Wright and Pat Kedhe, old college friends who loved mystery novels and named their downtown store after Edgar Allan Poe’s poem. (The shop’s newsletter is called “Quoth the Raven.”) They became members of Sisters in Crime, a global network dedicated to promoting women crime writers, but the Raven soon expanded from a mystery-focussed shop into a general-interest bookstore, growing alongside Lawrence itself—which, thanks in part to the University of Kansas, the local hospital, Hallmark Cards, and a national-defense contractor, has sprawled beyond its free-state settlement roots into a city of nearly a hundred thousand people.

“The Raven was smaller then,” Kelly Barth, who has worked at the bookstore for twenty-four years, told me. “In those days, it was all paper inventory, and Pat and Mary Lou had these shelves of file boxes with hundreds of thousands of index cards with titles and author names, and you kept the inventory by hand. There was this grid of X’s at the bottom, and when new books came in you added X’s, and when you sold one you’d cross it off, write out a real paper receipt, and probably have to run one of those old kuh-chunk-a-chunk credit-card readers.”

The year that Barth started her part-time job at the Raven, a Borders opened across the street. “Back then, it was big-box stores versus indies, and I remember worrying so much,” she told me. “I had really just started working there, but it already felt like such a sacred place, and I was so worried we’d lose all our customers.” But opening day for the Borders in town was the single biggest sales day in the Raven’s history. “It was amazing,” Barth said. “People would go browse at Borders but make a point of coming to order the books they wanted from us, the same way they do today with Amazon.” Still, the Raven’s sales decreased by fifteen per cent the year after Borders came to town, and a quarter century of bookselling has left Barth realistic about the precarity of the industry. “It’s a life style, really. I love books and, even though I may never get rich, I just love it, and I think you have to.”

Read the whole essay here.

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