Fox Books and The Shop Around the Corner

The debate between independent and traditional publishing authors is heating up and now bookstores have been added to the discussion. If Hachette does not get its way with Amazon, then bookstores will suffer. Bookstores will become extinct and books will no longer be available through the friendly neighborhood bookstore. It's like the underlying theme of You've Got Mail with Meg Ryan and Tom Hanks.

The 3rd generation owner of Fox Books, Joe Fox, sells books, lots of books, at low, low prices, much like Amazon. The Shop Around the Corner, owned by Kathleen Kelly, the daughter of the original bookstore owner, sells children's books at a much higher price, buying them from publishers at about 50% wholesale, which means she must sell the books at a much higher price than Fox Books. It's all about volume sales.

Kathleen Kelly also hosts authors for signings and reads books to children. It is part of the service she provides as the bookstore owner. She decorates her windows with books and photos of children's book authors and sells rare and expensive hand tipped books, packing everything in canvas book bags for customers. The Shop Around the Corner is a boutique business in the old world tradition.

Joe Fox sells millions, perhaps billions of books, and sells all the books at deeply discounted prices. He can afford to sell books cheaper than Kathleen Kelly because he has the space to buy more books and get a better deal on price than The Shop Around the Corner. "It's business. It's not personal," as Joe tells Kathleen as they battle for supremacy.

The audience groans when Fox Books puts another bookstore out of business, a mystery bookstore, and they cheer when Kathleen appears on TV to fight the good fight to protect her little children's book shop. Meanwhile, Joe Fox touts his deep and comfortable chairs, food, and lattes and the way readers can come and sit for hours and just read and relax.

In the real world, Barnes & Noble is Fox Books and boutique neighborhood bookstores were put out of business by Barnes & Noble because B&N could afford to sell books cheaper and they offered scones and lattes and comfortable chairs where book buyers could sit and relax and read and write or do whatever. B&N also hosted authors for readings and signings and even sold records, cassettes, and games, as well as iPods and tape players. B&N was the future of bookstores while neighborhood book stores unable to get deeply discounted prices for published books fought for space and sales.

The thing is that no one seems to remember that the death of the neighborhood and privately owned bookstore was touted when Barnes & Noble and Borders and Books-a-Million and Half Price Books and other discount bookstores came onto the scene and drove independent bookstores out of business.

Then along comes Amazon and a brand new technology - eBooks and Kindle. B&N and Borders were no longer the flavor of the month. They had been replaced by a virtual store that sold books at deeper discounts than B&N offered and Amazon quickly took the book buying world by storm. B&N and Borders liked that they could keep a book for years and send it back to the publisher worn, torn, and shelf scarred and get a full refund. That was a deal born of the Great Depression when publishers were motivated to keep bookstores in business, a model that has not changed and one that nearly cost publishers -- and eventually authors who had to give back royalties -- a bundle in October 2008. It was a bad time and an even worse one for authors who were hard hit by returning their royalties and not getting royalty checks when bookstores, like B&N and Borders, returned all those books, books that went directly to the landfills.

Life is about change -- and so is business. Either move with the times and innovate or be buried in the dust. That is what bookstores and authors and publishers and readers need to keep uppermost in mind.

As much as we all rail about this changing world and so many of us comfortable with the past want it to stay unchanged, that is not the way the world works, especially not when it comes to retail. In order for business to be viable it must make money. That is the bottom line.

It is also a bottom line that Barnes & Noble, Borders, and numerous privately owned bookstores do not seem to grasp. Amazon is not the enemy any more than Joe Fox was. It's business. It's not personal.

Except that it is personal to Hachette. Hachette still allows bookstores to buy books and return them for full refund even though the books have been on the shelves unbought and pawed over by untold numbers of potential book buyers. Hachette doesn't mind when books are dumped by the millions into landfills. It's a tax write-off they are more than happy to take at the end of the year, and they don't have to pay authors anything because the books were never sold. The perk there for Hachette and the Big-5 publishers is that even though the books were never sold, the numbers remain so their big name authors remain on the best sellers lists. It's all about numbers, just not numbers that include Amazon being able to dictate terms to PUBLISHERS.

Amazon just will not accept its place in the scheme of things. Hachette has been doing business in publishing for decades and upstart Amazon refuses to grasp that they are supposed to be grateful for being allowed to put Hachette authors on their virtual bookshelves. The nerve!

If bookstores want to stay in business, it is time to change the way they do business the way they did in the 1800s or even the 1980s and get move with the times. Sell books. Sell expensive books to make your profit, but diversify and seize the moment to look at business -- and life -- in a different context.

Kathleen Kelly closed her bookstore because she couldn't compete with Fox Books, but she found other options. Publishers asked her to write her own children's books. Some offered her a great salary to work for them as an editor. Opportunities opened up that were never possible as long as she clung to the past and memories of working in the bookstore with her mother when she was a child, memories that included growing up and becoming the new owner of The Shop Around the Corner. It was difficult saying goodbye to the past, but Kathleen Kelly embraced her new future.

Privately owned bookstores and chain bookstores still stuck with their original innovations now dusty and dated refuse to embrace the future, to look at the world from a different perspective.

We all hold fond memories of the businesses and, for me, the bookstores that were a bright part of our lives, but it is nearly impossible to give up $60 for a couple of books, no matter how beautifully hand tipped and First Edition rare, when that same $60 will buy me 6 or 10 or even 20 books just waiting to be opened, read, and explored -- and loved. In the end, it is all about numbers. More is better, especially when it comes to books, be they print or eBooks, thousands of which I can archive or put on the Kindle I take with me wherever I go. I love the convenience and format all my books in eBook form first, and I never have to worry about them being returned and buried in a landfill.

I still go to bookstores that provide a calm and quiet place to relax and read (sometimes on my Kindle), write in my journal, sip lemonade or tea, and eat a cranberry orange muffin on a lazy Saturday or Sunday afternoon. It's the best of both worlds and I look forward to the next innovation in publishing, which I hope will put the Big-5 publishers in their places and open up a world of possibilities.

The Wind From One Door Closing...

Since the negotiations between Amazon and Hachette have made the news with authors chiming in on both sides, the old Chinese curse has become a reality. We do indeed live in interesting times.

We also live in times that are lagging far behind the 21st century and the technological age. The Big-5 publishers, Hachette, included are working with the old publishing model, even though these media conglomerates have gobbled up every major publisher, and have become mega-corporations with tens of billions of dollars in business and profit every year. Though they claim to be preserving the future of publishing so there will always be books, it's rather like a member of the 1% claiming to understand what it is like for the middle and lower classes of people getting by from paycheck to paycheck and wanting enough disposable income to buy the books they want. In short, that dog won't hunt.

In easier to understand words, the 1% does not have a clue.

Make no mistake, Hachette and the other members of the Big-5 belong to the 1%, as Barry Eisler writes in The Guardian. As Eisler states, "[The Big-5] have done all they can to try to keep the prices of books artificially high, which hurts consumers and costs authors money. They have a record of zero innovation. And they've run the industry for decades in a way that has benefited the few while stifling new opportunities for the many."

James Patterson, multi-million dollar author and employer of a cadre of writers to help churn out 13 books a year, has bought some pretty expensive ads to brand Amazon the bad guy. Did I mention Patterson is a Hachette author? No smoking gun there.

Patterson decries the loss of Mom and Pop bookstores when he should, as Eisler put it, "...reconsider their anti-Amazon ideology, which at root is an attempt to stop the evolution of publishing itself. Because indie authors are the mom-and-pop shops of publishing. And the 1 percent's war on Amazon risks turning us into collateral damage."

Despite this war on Amazon and Hachette claiming to the victim of Amazon's bullying (at least as seen by author, John Greene ), a great opportunity is being lost. This is the 21st century and we live in an age of technological marvels with the life span of a mayfly. In order to compete and stay in business, bookstores need to move with the times, do what Amazon has done, and remodel their businesses. It's time to stop relying on returning thousands of books for full refunds, as they have since the Great Depression when publishers needed to keep bookstores open to sell books, and find a new path through the wilderness. One thing bookstores can be certain of is that books are not going away any time soon.

Amazon puts the customer first and that is what has taken Jeff Bezos's business from his parents' garage into a billion dollars international business. Bezos saw the future and he used technology to create a new business model, one that Hachette and the rest of the Big-5 want to dismantle.

Small bookstores should ask what customers need and want and make that happen. One bookstore turned an old mansion into a haven for customers with niches and nooks and comfortable spots to kick back, relax, and read. They made their store a comfortable place to enjoy a book for an hour or three. It's a step in the right direction, but doesn't go far enough.

How about charging stations for cell phones, tablets, eReaders, and laptops? Charge a small fee for the convenience.

Download stations for eBooks would be a good idea. No charge, just a secure line to do business from whatever store the customer chooses. The customer will repay the owners by spending more time in the store and end up buying books. Owners could also get a license to offer eBooks on every platform available for reading eBooks and offer accessories, skins, and trade-ins (or trade-ups) for all devices. Give customers a sample of whatever book they're considering or bundle print and eBook at a good price. The technology is available, so why not move with the times?

There are machines that print books in minutes, so why not buy a few and offer to print a customer's book in the store? The Espresso Book Machine would be perfect for that, and there are machines from other companies so you can shop price and availability.

Why not have a repair shop for laptops, tablets, and eReaders? Carry the parts and make repairs while the customers waits -- and reads. Another option would be to offer a loaner while their machine is being repaired. Think outside the box.

Host author evenings and round tables. Be THE place to go to discuss books and genres with published authors, beginning with local authors. Be a favored spot on a book tour. Offer classes in writing and editing for hopefuls and provide a comfortable setting for meetings. Start a book club or host other book clubs at the store. The possibilities are endless.

Instead of hanging signs predicting the Death of Books or the End of Books, strike out into the future with a new plan and forge a future in the ever changing print and digital world. The end is not near unless you have no vision and want to, like Hachette, blame Amazon for all your troubles. Closing one door doesn't mean being stuck in limbo or dying a slow and painful death. Another door will open, but one has to have the vision and guts to make a new door.

Let the world choose sides while Hachette and the rest of the Big-5 pretend to be victims of Amazon's innovation and forward thinking, but make a future that is all yours. It sounds like such a great idea, I may find some like-minded people and buy a bookstore going out of business to start my own. The future is here now. Be a part of it, change with the times, but don't complain if you get run over standing goggle-eyed while the train hits you. You've no one to blame but yourself.

The Kris Kringle Formula

One of my favorite holiday movies is Miracle on 34th Street and one of my favorite scenes is where Kris Kringle in his lovely Santa Claus suit tells a mother that she can buy what her son wants to find under the tree Christmas morning by going to another store. The mother, played by Thelma Ritter (one of my favorite character actresses), is dumbfounded and says that from now on Macy's will get her business though she has avoided them in the past. Kris's actions are in the true spirit of Christmas and if Macy's will send people to other stores, like Gimbels, then Macy's just won a new customer.

That is a long way of getting into the point of this post, which is about Amazon. Amazon has built their business on giving customers what they want, even when it means offering third party sellers and telling them to go to Barnes & Noble or wherever customers can find what they want and need. The Big-5 publishers don't have the smarts of the Macy's owner who adopts Kris's policy and puts out a big book to show where products Macy's doesn't carry can be found elsewhere. The Big-5 publishers want to keep the lock on sales and distribution and pricing and keep authors from breaking out and going it on their own.

With the rise of boutique and small publishers, the Big-5 publishers began to lose their grip, but when Amazon came out with the Kindle and sales of eBooks went through the roof, the Big-5 claimed that would be the end of paper book sales in hardback and paperback. Except none of that happened. Yes, sales are down from previous years when all the books available were in paper form, but books are still getting out and books are still being read. Business has never been better for small publishers and readers alike. What's not to like about people buying and reading more books even if it is in digital form?

What's not to like is that paper and ink and paperback books with about a 5-year shelf life is not to like when Big-5 publishers have had the monopoly for so many decades -- and centuries. Authors going independent is nothing new nor are vanity publishers, but the likelihood of such authors getting any real fame and fortune out of the process, outside of Mark Twain or Jane Austen and the like, is like playing Roulette. The house always wins, and the Big-5 in their various earlier guises as smaller publishers before being gobbled up by conglomerates and media factories, held house odds. They were the House.

David Gaughran of Let's Get Visible had a lot to say about the Big-5 publishers' PR machine and what isn't being told by the media (owned by Big-5 publishing media services) about Amazon. Hatchette certainly is not going to pat Amazon on the back, offer a cigar to Jeff Bezos, and sign the current contract on the table. That would be their death knell. People would be able to buy Hatchette's books from Amazon at discounts that would cut into unlimited expense accounts and 3-martini lunches. You would think that the point is to get people buying books and reading more, which is what is happening, and not about the profitability of a $10 billion media conglomerate like Hatchette sending out PR bulletins that demonize Amazon.

David Gaughran writes, "The funny thing is readers don’t seem to have any problem finding books they love. Any readers I talk to have a time problem – reading lists a mile long and never enough hours in the day to read all the great books they are discovering.

The real discoverability problem in publishing is that readers are discovering (and enjoying) books that don’t come from the large publishers. What these publishers have is a competition problem not a discoverability problem." (The bolding is mine.) 

More writers are making the leap into self-publishing, but not at the diamond-studded rates of vanity publishers. Like the song says, "Sisters [and writers] are doing it for themselves," and they are doing it in increasing numbers.

Yes, there are some bad independently published books, but there are also some real dogs put out by the Big-5 too. I thought Meg: A Novel of Deep Terror was just such a bomb -- and so did the critics in spite of a media blitz worthy of Stephen King or David Baldacci and a PR budget that beggars the imagination of even the most well-heeled independent author. The Big-5 can afford it; they've been living off the backs of their solid and hard-working midlist writers for decades and exploiting those same authors' back-list shamelessly while giving very little to the authors, pleading poverty and low numbers. Well, if the Big-5 would put as much effort in midlist writers with a wide fan base even on the lukewarm advertising and promotion offered, they would make even more money, but those CEOs and fat cat Big-5 publishers with their golden parachutes and 7-figure incomes with bottomless expense accounts don't have the sense of R. H. Macy faced with Kris Kringle's manner of doing business so that kids get what they want under the tree Christmas morning. Those CEOs and fat cats are all about the bottom line and the black ink on their side of the balance sheet and to hell with authors, without whom they would cease to exist.

The thing is that the big publishers have sold the idea that it is their know-how, lakes of ink, forests of pulp paper, distribution, and marketing know-how that sells books and authors would be lost without them -- except authors are proving they don't need the Big-5 to make it big in publishing. Not everyone makes the kinds of money that J. A. Konrath or Amanda Hocking have made, but the field is opening up more and more as Amazon helps 99-cent book authors to rise above the pack and make their books worth reading and buying. It's the same idea that has always been true, it is more profitable to sell your product to 1000 buyers at $1 a pop than to sell 1 product for $1000 a pop, especially in this economy as we stand on the brink of a worldwide economic reset where countries are going bankrupt.

There are still reporters like Jeremy Greenfield who buy into the demonization of Amazon and dire predictions for the future of books, but the truth will out. The proof, as my Gram used to say, is in the pudding. And I know she wasn't the first or the last to repeat that phrase. Jeff Bezos and Amazon continue to prove that if you give the customers what they want, they will buy, and they will come back to buy more. Amazon offers everything under the sun from their own warehouses and from third party sellers right on their website and they don't play favorites with marketing algorithms so that their products get a bigger share of the space, no matter what you've been told or what the PR machine of Hatchette and the other Big-5 publishers and their media conglomerate owners pays millions to say. Judge for yourself and buy where you will. Amazon isn't the only game in town, but at least they play fairly with their customers. They also do not hold authors hostage. Can you say that of Hatchette or the other members of the Big-5?

Maybe it's time to follow Kris Kringle's formula and make sure the customers (the readers)-- and the authors -- get a fair shake.