Book Depository vs Book Stores

There has been a lot of hand-wringing by book retailers this year in Australia over the apparently disastrous state of their businesses, with fingers being squarely pointed at online retailers such as Amazon and Book Depository, whose prices are savaging profit margins. It's been a hot debate, sometimes an emotional one. I know many people who work in book stores, commercial and independent and the writing community tends to close ranks pretty quickly around them. A defensive position has been established whereby we, as readers, are supposed to feel bad for buying books overseas rather than in our local stores. An article in The Age on December 6th by Tim Barlass tells us "not to fall for the myth that everything is cheaper from an offshore website. Seven out of the 10 books on the Australian bestsellers list are cheaper if bought in an Australian bookshop or from a local online retailer compared with ordering them from an overseas website."


This is easy to verify and all very well if the only books you're interested in are top 10 titles but I would venture to claim that an awful lot of people read more widely than the bestseller list and really, how many times can you buy that Stieg Larsson? Given this has been the first year I've kept track of all the books I've read, I decided to do a little price comparison experiment.


118 books have been added to my shelf this year. As a reviewer I'm often sent free copies, but I estimate that I still purchased around half of those 118, some on Book Depository, some in book stores. I've just spent a few hours comparing prices on all 118 books, checking Book Depository against Borders (who are owned by the Red Group in Australia, also the owners of Angus & Robertson stores) and Readings, a popular independent Melbourne chain comprising 6 stores. 34 of the books were not available on Book Depository, in every case because they were Australian books with no overseas editions. Does this mean Book Depository and Amazon have no effect on sales of Australian books, which must be purchased in Australian book stores? With no Australian version of Book Depository, it sure looks like it to me. As for the remaining 84 books, this is what I would have spent had I purchased them all in the following outlets:


Book Depository: $1487.62
Readings: $2350.71
Borders: $2738.88


Sobering figures. The average spend per book is therefore:


Book Depository: $17.71
Readings: $27.98
Borders: $32.61


By purchasing all my books at Book Depository rather than Borders I am saving $1251.26. I would save $863.09 over Readings and there is still a $388.17 saving by visiting Readings over Borders, so that's a no-brainer. According to these figures if you're buying in a bookstore, you'd be a fool to visit Borders before an independent. Still, the gap between Book Depository and book stores is startling and $1251.26 is an amount I'd much rather have in my account than in the Red Group's, particularly given their considerable profit margin. On April 29th of this year Blair Speedy reported in the Australian that the Red Group had almost doubled it's first half profit to $19.5 million for the six months to February 27th, up from $10.7 million in the previous first half.


The Australian Booksellers Association has been pushing on behalf of retailers for the government to introduce GST on imported goods under $1000, which would effectively raise the price of books on Book Depository by 10%. On 18th December a Productivity Commission inquiry was announced to examine the concern of retailers, so expect a war of words between retailers and consumer groups in the next 6 months. It is worth pointing out that in the case of my 118 books, adding 10% to their purchase price would result in a spend of $1636.38, still $1102.50 less than had I purchased them at Borders, and $714.33 less than Readings.


This may be uncomfortable data for those in book retail but how can anyone reasonably expect consumers to not plump for the cheaper online option? Only a fool would believe the public will rush to spend 2-3 times as much for their product in order to sustain book stores just because they're nice. I used to love going into music stores every weekend to browse the CDs and pick a few out but you know what? That business is dead. It's over. Things change. No amount of vinyl or music lovers urging people not to download could save them. In terms of book store lovers, I suspect they will be vastly outnumbered by consumers who will, quite simply and without any ceremony or nostalgia, make a stark economic decision to save their money. Sad as it may be to acknowledge, maybe book stores, just like record stores, have had their run and the writing is on the wall. Unless they find some way to genuinely compete on price, which may mean having to accept less profit, then this is surely their end of days. 


All this without even considering ebooks.