2004-12-10

Great for readers, not for bookshops

Owning a bookshop is my lifelong dream. But the bookselling business is also a tough one. Although the impact of online bookshops has turned out to be less damaging than originally thought, bricks-and-mortar bookshops now have to face severe challenge from department stores and discount stores.

In the case of Australia, department stores and discount stores now have their own books section, carrying a small range of bestselling items, and usually selling at heavily discounted prices. For example, K-mart and Target have a standard 35% discount off the rrp (recommended retail price) of books. For some books, the discounts are even deeper.

As an example, Random House Australia has just released the illustrated edition of Dan Brown's Da Vinci Code, at rrp of A$59.95. Most bookshops sell at a discount - A$39.95 at Dymocks, although Collins is still charging the full price. But Target and K-mart are both selling at half price. And when I bought it in K-mart several days ago, they were having the regular further discounts (i.e. a uniform disocunt for selected categories of goods), with 15% off all books. As a result, I bought the book at A$24.5.

This obviously would make life difficult for bookshops. While the narrow range of books carried by discount stores (at least now) would mean that bookshops can still survive, they inevitably have to operate under reduced margins, since they are losing good-margin, best-selling items to the discounters.

Such development is great for readers, but not so for bookshops. And it makes a potential bookshop owner nervous.

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