Good Business

The other day, my wife Rhumba made a startling discovery: ordering a book from the local bookstore is now cheaper and more convenient that ordering it from Amazon.

This is not exactly a secret, and it’s not always true. But it does show that corporate “success” can come as much from working the system as from innovation.

For years Amazon, the online bookseller and now everything-else seller, has been wiping the floor with traditional bookstores, especially local independent bookstores. So many of them are gone now.

Yes, Amazon could offer discounts on most books. But Amazon could offer even better deals because it collected no sales tax; online sales were exempt from state taxes.

Of course, brick-and-mortar bookstores had to charge the tax, and they screamed. They screamed for years.

Amazon also co-opted brick-and-mortal bookstores as its own show-rooms. People could go to them, find  books they liked, and then go home and order them through Amazon instead.

Amazon even published a smart-phone app, Price Check, that scans the bar code of a book (or anything else) and then shows you Amazon’s price. You can order right then and there, while standing in the bookstore that actually showed you the physical book.

This is called parasitism. Amazon calls it good business. I agree that this is what passes for “good business” in America today, and increasingly everywhere else.

But as of this year, Amazon lost a couple of advantages. First, it now has to collect sales taxes for the states it sells in, like any other business. They fought it in court; they lost.

Then Amazon raised the limit on Super Saver Shipping. The Super Saver plan offered free shipping for any purchase over $25. Since many books cost $25 or more, it could make sense to order a single book, or two cheap ones, from Amazon; you’d get the Amazon discount, you’d pay no sales tax, and no shipping fee either.

In October, Amazon raised the free-shipping threshold to $35. Thirty-five bucks is more than the price of most books, and often more than the price of two or even three books. Which means that customers must now pay for shipping on most small Amazon orders. Shipping’s not cheap, either; it more than overwhelms the Amazon discount on most books.

Amazon counters that free shipping is available to all purchases. If you pay them $79 a year for “Amazon Prime” membership. Yeah right.

So when Rhumba saw how much Amazon would charge for shipping on the book she wanted, she went to our local independent bookstore instead and let them special-order the book for her; they’ve been after us to try it for years.

And the book came from the distributor in two days as promised, with no shipping charge. It was a better deal than Amazon could offer.

Mad with power, Rhumba ordered another book from the independent bookstore; she even ordered and paid for it online through the bookstore’s e-commerce site. This book was promised in seven to ten days, but arrived in four after all. I picked it up today. The bookstore is walking-distance. There are advantages to college towns.

So as far as books are concerned, who really needs Amazon – for books, anyway? At least, if your local bookstore still exists.

If it does, go there and try before you buy. Or even special-order a book that you will receive quickly and at competitive prices. And finally, hand your money to the nice people who actually built a place where you could come and look at books. Give the bookstores of America, especially your local independents, a fighting chance.

Yes, Amazon is much more than books these days.  But if its grip is loosening even a bit on its heritage business, how strong is that grip on all the new enterprises that it’s moving into?  The company’s barely making a profit. It might badly need the bucks it saves by charging more for shipping.

Oh, by the way: before going to your local bookstore, you might visit  Amazon.com and read reviews of some books that interest you – before buying them locally.

It’s just good business.

4 thoughts on “Good Business

  1. LK

    Boomer, thanks for pointing this out to your readership. Jeff Bezos is trying to do what the Hunt Brothers and Emperor Norton tried to do – corner the market. He’s still trying. He’s more ambitious than those old tycoons were, though. He wants to become America’s, or perhaps the world’s, sole retail outlet. His means to do this depended partly on the new internet connectivity, but largely in taking advantage of tax loop-holes that businesses like mine didn’t have. Some of that is ending. Whether his drone helicopter product delivery plan can be made to work, I must admit I’m skeptical. He got a lot of publicity out of talking about it with the press, which I’m guessing was mostly the purpose of talking about it in the first place. Anyway, he doesn’t own the world yet. Let’s hope he never does.

    Reply
    1. admin Post author

      LK, you’re welcome, and I agree. I also suspect that the drone story was a ploy, and that Amazon is really trying to move to same-day delivery of household items in metro areas, including groceries. Run a search for Amazon Fresh. Kind of makes sense. If it’s growing more expensive to ship items long distance, try shipping them short distances instead; might make sense if you plan to to build one or more distribution centers in every major metro area, and also believe that you’ll take over Target’s, Walmart’s, Costco’s, Safeway’s, Trader Joe’s, and everybody else’s business along the way. Let’s hope this plan fails. I believe that the odds are against; but as long as investors believe otherwise, Bezos’ plans for continental domination (at least) can roll forward.

      I wonder if, because they’ve lost their sales tax advantage and much of their ability to ship free, Amazon’s doubling down with this same-day gamble to stay on top. Sadly, Amazon is no special case, just the biggest: big businesses so often “get ahead” by exploiting or abusing public resources which they don’t pay for, and don’t want to.

      As with Walmart, which doesn’t offer health care plans that its low-end employees can afford but carefully tells them how to apply for health care from public agencies meant to serve the poor and low-income — which as Walmart employees, they largely are. While the Walton family en masse has more wealth than the 50 percent of Americans with the lowest incomes.

      I find it interesting that this blog, which does not get high traffic volume, today got 15 hits through Google Search, all marked “search terms encrypted”).

      Reply
  2. roger szal

    Boomer, If used /remaindered books are something you’re interested in, ABEbooks on the internet can be of service. They are a clearing house for independent booksellers; tell them author/title and get price quotes (usually) from dozens of bookstores. I’ve gotten books from booksellers in the US, Canada, and England, some for as little as a dollar (plus $4 shipping! ) one out of print since the 1920’s. The one from England arrived in 5 days with the most elaborate paper wrapping I’ve ever seen-a book on blacksmithing for the rural welder published in the 1950’s-the bookstore was “culinary Jottings, Dunsters Cottage,
    South Bowood, Dorset.

    All the best for the new year-Roger Szal

    Reply

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