Tag Archives: amazon

The Inefficiencies of Local Bookstores

We should not hold Amazon in con­tempt for pres­sur­ing loc­al inde­pend­ent book­stores to the brink of clos­ure and instead should embrace the com­pany for tak­ing advant­age of inef­fi­cien­cies, fur­ther­ing a read­ing cul­ture, and–believe it or not–helping us ‘buy loc­al’ more effect­ively.

In response to Richard Russo’s recent New York Times art­icle berat­ing a recent not-so-well-con­sidered Amazon pro­mo­tion, Far­had Man­joo takes a dif­fer­ent per­spect­ive on the Amazon vs. inde­pend­ent book­stores debate, this time com­ing down firmly in the Amazon camp.

I get that some people like book­stores, and they’re will­ing to pay extra to shop there. They find brows­ing through phys­ic­al books to be a med­it­at­ive exper­i­ence, and they enjoy some of the ancil­lary bene­fits of phys­ic­al­ity (authors’ read­ings, unlim­ited magazine brows­ing, in-store cof­fee shops, the warm couches that you can curl into on a cold day). And that’s fine: In the same way that I some­times wander into Whole Foods for the lux­uri­ous exper­i­ence of buy­ing fancy food, I don’t begrudge book­store devotees spend­ing extra to get an exper­i­ence they fancy.What rankles me, though, is the hec­tor­ing atti­tude of book­store cult­ists […] when they argue that read­ers who spurn indies are abandon­ing some kind of “loc­al” lit­er­ary cul­ture. There is little that’s “loc­al” about most loc­al book­stores. Unlike a farm­ers’ mar­ket, which con­nects you with the people who are sea­son­ally and sus­tain­ably tend­ing crops with­in driv­ing dis­tance of your house, an inde­pend­ent book­store’s shelves don’t have much to do with your com­munity. Sure, every loc­al book­store pro­motes loc­al authors, but its bread and but­ter is the same stuff that Amazon sells—mass-manufactured goods whose intel­lec­tu­al prop­erty was pro­duced by one of the major pub­lish­ing houses in Manhattan. […]

Wait, but what about the book­stores’ own­ers and employees—aren’t they bene­fit­ting from your decision to buy loc­al? Sure, but inso­far as they’re doing it inef­fi­ciently (and their prices sug­gest they are), you could argue that they’re bene­fit­ing at the expense of someone else in the eco­nomy. After all, if you’re spend­ing extra on books at your loc­al indie, you’ve got less money to spend on everything else—including on authen­tic­ally loc­al cul­tur­al exper­i­ences. With the money you saved by buy­ing books at Amazon, you could have gone to see a few pro­duc­tions at your loc­al theat­er com­pany, vis­ited your city’s museum, pur­chased some loc­ally craf­ted fur­niture, or spent more money at your farm­ers’ mar­ket. Each of these is a cul­tur­al exper­i­ence that’s cre­ated in your com­munity.

That said, occa­sion­ally I like to pay a ‘premi­um’ and buy books from loc­al stores, but not for any of the reas­ons men­tioned above. Rather, I hope for that bit of lit­er­ary serendip­ity and haphaz­ard dis­cov­ery that only seems to hap­pen in loc­al inde­pend­ents.

Anatomy of a Price War

With the recent Amazon–Walmart price war on books and the 1992 air­line industry price war as the back­drop, James Surowiecki takes a look at how price wars start, how they can be avoided, and how to (pos­sibly) win at them.

The best way to win a price war, then, is not to play in the first place. Instead, you can com­pete in oth­er areas: cus­tom­er ser­vice or qual­ity. Or you can col­lude with your putat­ive com­pet­it­ors: that’s why car­tels like OPEC exist. Or—since overt col­lu­sion is usu­ally illegal—you can employ subtler tac­tics (which eco­nom­ists call “sig­nalling”), like mak­ing pub­lic state­ments about the import­ance of “stable pri­cing.” The idea is to let your com­pet­it­ors know that you’re not eager to slash prices—but that, if a price war does start, you’ll fight to the bit­ter end. One way to estab­lish that peace-pre­serving threat of mutu­al assured destruc­tion is to com­mit your­self before­hand, which helps explain why so many retail­ers prom­ise to match any com­pet­it­or’s advert­ised price. Con­sumers view these guar­an­tees as con­du­cive to lower prices. But in fact offer­ing a price-match­ing guar­an­tee should make it less likely that com­pet­it­ors will slash prices, since they know that any cuts they make will imme­di­ately be matched. It’s the retail ver­sion of the dooms­day machine.

These tac­tics and deterrents don’t always work, though, which is why price wars keep break­ing out.

Surowiecki men­tions that there’s appar­ently a big banana price war going on in the U.K. at the moment! News to me.

How Reviews Influence Sales (Positive and Negative)

Unsur­pris­ingly, this brief ana­lys­is of how reviews influ­ence sales on Amazon equates quite well with my pur­chas­ing beha­viour; I would­n’t feel com­fort­able buy­ing a product with 100% pos­it­ive reviews unless I knew per­son­ally that it was awe­some. And a product with less than 15 reviews or so? For­get about it.

[A] hand­ful of bad reviews, it seems, are worth hav­ing. “No one trusts all pos­it­ive reviews,” [John McAt­eer, Google’s retail industry dir­ect­or,] says. So a small pro­por­tion of neg­at­ive comments—“just enough to acknow­ledge that the product could­n’t be perfect“—can actu­ally make an item more attract­ive to pro­spect­ive buy­ers.

The sheer volume of reviews makes far more dif­fer­ence, accord­ing to Google’s ana­lys­is of clicks and sales refer­rals. “Single digits did­n’t seem to move the needle at all,” says Mr McAt­eer. “It wasn’t enough to get people com­fort­able with mak­ing that pur­chase decision.” But after about 20 reviews of a product are pos­ted, “We start to see more reviews—it starts to accel­er­ate.”