Amazon’s New Assault on Independent Booksellers

February 4th, 2016 by Phil Mattera

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While the claim by the CEO of General Growth Properties that Amazon was planning hundreds of such outlets has now been withdrawn, the online commerce giant is not denying its interest in physical bookstores at some level.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.

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