E-Books and Indie Bookstores: Part II — Business Models

Putting aside the environmental, financial, and promotional advantages to sending eARCs to independent booksellers, the one paragraph of Jessica Stockton Bagnulo’s post that troubled me was this:

I think for a lot of booksellers right now, the idea of an e-reader provokes growls of hostility because it’s associated with the Kindle, which is a proprietary platform sold and administered by Amazon, our primary competitor. We indies can’t sell ebooks for the Kindle, so if readers buy a Kindle it means, on some level, lost sales for us. But the Kindle is not the only e-reader, nor even necessarily the best! The Sony Reader, the iPhone, the Google phone, and other electronic devices can also be used to read ebooks — and those platforms are wide open for ebook sales from indie bookstores, provided our ecommerce technology is up to par.

Just as we have to educate our customers (and ourselves) that Amazon is not the only option for buying online, we’ll have to make some efforts to make sure those who want to read ebooks know that they have options besides the Kindle, and that they can still “read indie while reading e” (feel free to steal that tagline). And ebook-reading booksellers are the perfect group to start spreading that word, to make sure that we can make ebooks a part of our business model rather than just more competition.

This all sounds good, but I’ve yet to see a realistic, functional business plan for an independent bookstore that incorporates the selling of e-books. Or even beyond that, a plan that even accounts for the attrition of book sales due to an increase in ebook popularity.

Independent bookstores run on such a small margin that if sales of e-books reach a certain level, I think bookstores are going to have to go through a transformation to stay in business, but I honestly can’t figure out what the end result of this transformation would look like.

The “bundling” idea—which Bob Miller of HarperStudio—is one that’s been talked about a lot. Basically, a reader could buy a book from a store, and then for an additional $2-$5 get a code to download the e-version of that same book.

Personally I doubt that I would ever do this, but some people might, and it’s not a bad way of incorporating bookstores into the equation.

That said, I think it’s foolish to overlook the draw of immediacy that e-books/readers will have over the mass readership in America. Americans are pretty impulsive people, and the idea that a book (or album, or whatever) could come up in conversation, and within one minute — without even leaving your barstool — you could purchase and download that book/album/movie is like crack to most of us.

If e-books do become a preferred way or reading — due to price, availability, the coolness of the e-reading gadget, etc. — then why would you ever go into a bookstore? To browse the physical books that you’ll then download through your e-reader for half the price? That’s not a viable bookstore business model.

Some people have also floated the idea of indie bookstores selling e-versions through their website, which, in my opinion, is beyond impractical. Most indie stores have very rudimentary e-commerce sites, despite the fact that people have been selling things online for decades . . . That’s probably not going to change if these same stores start selling e-books for download through their sites.

Sure, one can pretend that loyal customers will still purchase a download through their local store because they love it so much, but a) most customers aren’t loyal and b) unless that purchase can happen immediately and wirelessly (a la buying a book with a Kindle), it’s just simply not going to work.

Besides, a viable business model for e-reader creators is to include a “e-store” that’s wirelessly linked to the reader itself, allowing users a seamless interface between wanting a book and purchasing it, and Amazon/Sony gets to keep the profit from sales of the reader and sales of the book. Win-win . . . for everyone but bookstores.

I know that even if e-book sales expand, physical books will still exist. It’s not that which worries me. It’s the idea that with enough book sales turning electronic and occurring outside of bookstore, the miniscule margins keeping booksellers afloat will vanish . . .

So, maybe I’m missing something. Or maybe someone out there has a brilliant concept of what bookstores will look like in an e-reading future. Either way, feel free to e-mail (chad.post at rochester dot edu) or post your comments below. And I’m sure I’ll write more about this topic later . . .