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Harry Potter has no spell for bookstore profits.
Millions of people will descend on stores for a copy of “Harry Potter and the Deathly Hallows” in July, but deep discounts mean many will struggle to turn a profit from the jamboree.
“Everywhere you go there is huge, ridiculous discounting by the chains,” said Graham Marks, children’s editor at the British-based trade magazine Publishing News.
“They are literally not going to make one penny out of the book. It is stupid — just throwing money away … The world has gone mad.”
The world hasn’t gone mad, but when the release of a major title means trouble for booksellers, there’s clearly something wrong with the business model.
Brick-and-mortar bookstores cannot compete with Amazon on price. They also can’t compete with Costco, Wal-mart, or your local supermarket on bestseller prices. Customers feel cheated if they don’t get the same markdown on bestsellers at their local bookstore as they do in a supermarket. So, the very books that should be paying the rent are being sold at a deep discount. The supermarket pays the rent by selling milk–the few cents they make on every book is just gravy.
You’d think booksellers could make it up by providing good customer service–but Amazon beats them there, too. No clerk can have read every book in the store, but just about every book Amazon carries has been reviewed by an Amazon customer. And ask yourself this: has a bookstore employee ever done a great job finding you the perfect book, which you then proceeded to buy on Amazon to get a better price?
I see a day coming when there will be two types of bookstore: self-service megastores and small “boutique” stores in areas where customers are not price-conscious. Or you can always go to Amazon.