Thursday, April 12, 2012

On eBooks

The growth of eBooks has been astounding.  A significant portion of readers prefer this format because of its relatively low cost, convenience, and portability.

While we're primarily a children's bookstore and eBooks have not made a huge dent in that particular book market, we know that it is growing.  Further, we sell adult titles and want to assist our customers in selecting and ordering eBooks.

So we at Little Shop were rather excited when a couple of things happened in late 2010.

First, a number of major publishers announced that they were shifting to an agency relationship with retailers for the selling of eBooks.  (Retailers would be merely acting as an agent in the transaction between publisher and reader.  Under such a system, publishers set the price for their product and retailers are bound to abide by their decision.)

Sometime later, Google and the American Booksellers Association -- the trade organization of independent bookstores of which we are a proud member -- announced an agreement whereby ABA members could sign up to sell Google eBooks.

How exciting!  We, a small, independent bookstore, could hand sell eBooks!  And we could do so in a way to be price competitive with behemoths like Amazon while offering superior service.

We signed up.  As there was considerable demand among independent booksellers, we were placed in a queue.  Then we had to work with our fantastic IT person to coordinate Google's system with our website.  Further, day-to-day business (and life) got in the way of a quick adoption of Google eBooks.  But, after time and a not inconsiderable financial investment, we got there.

The Google eBook system wasn't easy to work with.  We were in the process of making the process as simple as possible for our customers.  Daren, who documented his frustrating experience with a trial run of our system, was of great help.  We were just about ready to formally roll out a Little Shop eBooks extravaganza with publicity and in-store demonstrations and all that good stuff.

Unfortunately, bad things happen.

Last week Google announced that it is ending its relationship with the American Booksellers Association.  While the ABA is looking into alternatives, we've decided not to even bother with Google as we would be cut off at some point not within our control between right now and January 31, 2013.

Now the U.S. Department of Justice is suing Apple and five major publishers, claiming illegal collusion in their shift to the agency model for selling eBooks.  In the short run, this will probably allow retailers to set their own price on all eBooks.  This is to say that Amazon will be able to set prices on eBooks below cost in order to expand market share.  (On the other hand, my best guess is that publishers will go back to the agency model after a reasonable amount of time passes.)

eBook prices could be set so low that it will dramatically increase sales relative to physical books and dramatically decrease revenue for publishers.  It will also serve to further squeeze out independent bookstores who, given the substantial start-up costs of establishing an eBook system, will soon have no reasonable way to compete.

In so many ways, we're sorry that we can not serve our customers more effectively by offering eBooks at this time.  We hope that an alternative is found soon.

In the meantime, Little Shop of Stories will continue to strive to be the best independent bookstore for kids & the grownups they become in the observable universe.

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