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Monday, January 28, 2013

Putting Your Eggs in One Basket

Borders went out of business last year and now Barnes & Noble is announcing they're going to be closing a third of their stores over the next ten years.  It's somewhat tempting to cry out in terror over the state of the bookselling business, but it might be more appropriate to mourn the death of a business model that was as short-sighted as it was short-lived.

I have vague memories of my youth, when book-sellers weren't as concentrated.  Sure, they had the chains...B. Dalton and Waldenbooks, small little stores at the mall, but there were drugstores and super markets (for the mass market paperbacks) as well as independent stores, sometimes ridiculously specialized, like the former Little Bookshop of Horrors in Arvada, which sold only horror, sci-fi, and fantasy books, or ridiculously expansive, like the Tattered Cover, four stories of books on any subject you'd desire.

The Tattered Cover is still around, but the Little Bookshop of Horrors, and pretty much any other "little" bookshop has long gone the way of the dodo.

They couldn't compete with the big chains, and it wasn't some accident of commerce, it was by design.  The big chains wanted market share; they had a corporate strategy and investors to please.  It was all about the economy of scale. 

They wanted to control the book selling business, and found out that it couldn't be controlled. They put all their eggs in one basket and discovered a gloopy mess when the basket fell.

And hey, I get it.  It's tempting to think that if one store does well, then two can do better, and that will just keep on exponentially even when you get into the hundreds.  But I'm not sure things work like that, not really, and certainly not forever.

There are other considerations, like the general health of the market.  On a large enough scale, small mistakes can have massive consequences.  Increase your footprint and you also increase your overhead.  Increase your overhead and you decrease your profitability. 

I'm sure some economist can explain it better than I can, but it's no surprise that Barnes and Noble is falling prey to the same curse of ubiquity that have doomed other big chains.  They did their best to kill the golden goose, and with a strangled neck in their hands, find no more golden eggs.

Vonnegut would say, "So it goes."

I'm not convinced that eBooks will every replace printed books, and so I suspect there will always be a market for books.  It may just be smaller, more dispersed, and that's okay.  Maybe that's how it should be.

Many times over the years, I've thought the greatest mistake we made as a culture is agreeing that a few greedy men wearing suits and sitting in faraway offices are the best ones capable of figuring out what people need. 

The truth is, people need books.  They don't necessarily need to buy them from a big chain.

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