Amazon’s New
Assault on Independent Booksellers
By
Phil Mattera, Dirt
Diggers Digest
My first reaction to reports that Amazon intends to open brick-and-mortar bookstores around the country was to assume it was a joke — an Onion satirical piece that somehow ended up in the business section.
While
the claim by the CEO of General Growth Properties that Amazon was planning hundreds of
such outlets has now been withdrawn, the online commerce giant is not
denying its interest in physical bookstores at some level. In fact, it turns
out Amazon already opened such a store in Seattle in
November.
Whatever
the scope of Amazon’s plans, such an initiative is infuriating. Amazon is
responsible for decimating the bookstore business in the United States over the
past two decades. It effectively put Borders out of business, crippled Barnes
& Noble and brought about a steep decline in the number of independent
booksellers.
Now it seems that Amazon cannot abide the fact that bookstores such as Powell’s in Portland, Oregon and Politics and Prose in Washington, DC survived its onslaught and found ways to survive in an age of online commerce.
On
one level, the Amazon move simply makes no sense. This is a company whose
success is based on replacing traditional retail outlets with a vast website
and giant distribution centers that can process orders at lightning speed and
in some cases can now deliver products within hours. Why would Amazon want to
return to the inefficient approach it has worked so hard to eradicate?
Yet
the company undoubtedly noticed that independent bookstores are enjoying a bit
of a revival. Despite the ease of online ordering from Amazon (and the fact
that in many cases no sales taxes were collected), it turns out that people
like to browse shelves of physical books, value the assistance of knowledgeable
booksellers and are drawn to the warm atmosphere of many small stores.
Although
this mode of retailing is out of keeping with Amazon’s general approach, the
company’s obsession with increasing its revenue is stronger than its commitment
to a particular business model. After all, Amazon has been experimenting with
other low-tech initiatives such as delivering food from local restaurants.
While
it is far from clear that Amazon could succeed in the physical bookstore
business, it is troubling to think what impact its effort might have on
independent booksellers. How many locally owned stores might fail before Amazon
ends its experiment and returns to an exclusive focus on web sales?
Amazon
has already done considerable damage to the independent retail sector in
America. A recent report produced by the research group
Civic Economics for the American Booksellers Association estimates that
Amazon’s operations have effectively displaced more than 30,000 retail outlets
in the United States and eliminated more than 135,000 retail jobs.
In the
process, many downtown business districts have languished, and local
governments are losing an estimated $420 million a year in property taxes.
It
is true that Amazon has created many jobs of its own and is building many new
distribution centers. Yet, as I noted in a previous
post, the working conditions for those positions are often brutal.
And in many cases Amazon has negotiated deals that minimize the property taxes
it is paying on those facilities.
We
may not be able to do anything about Amazon’s increasing domination of online
commerce, but the company should not be allowed to destroy what remains of
independent bookselling and other locally owned, human-scale retailing.
