Price Wars

The price war between Amazon and Wal-Mart is heating up.

Maybe the two retail behemoths will battle to the death as they bleed from the bookshelves by selling the season’s most popular hardcovers at a loss. More likely, they’ll both be winners, since the publicity surrounding the battle has hit every major media outlet from USA Today to NPR. There’s nothing like free advertising, especially when the stories center around your low, low prices.

With both Amazon and WalMart offering bestselling hardcovers online for under $10.00, they’re losing money on every book they sell—or at least, they should be. An American Bookseller’s Association lawsuit back in the late 90s set a precedent that prevents publishers from offering large chain stores better deals than stand-alone independents.

That lawsuit was designed to prevent publishers from favoring the big superstore chains. Ironically, those chains themselves are now in jeopardy from players even farther up the retail food chain. WalMart and Amazon are the whales of the retail universe, threatening to devour all the customers and leave nothing for the smaller fish to snack on.

But it seems like $8.99 hardcovers would be a good thing. Cheaper books means more readers, right?

Maybe—but it also means fewer books. If general stores like WalMart manage to put bookstores out of business, the golden years of book superstores will be over, and independent bookstores will be a fond memory. Instead of big box stores that carry thousands of titles, most Americans will be shopping in book departments that carry perhaps a few hundred.

Yesterday, I checked out my local WalMart and found a wide selection of paperback romances and thrillers from top authors, along with hardcovers by King, Koontz, Patterson and Palin, among others. Notably absent from the shelves were Malcolm Gladwell’s SuperFreakonomics, and George Carlin’s latest book–both of which are current New York Times bestsellers. WalMart isn’t committed to education and enlightenment. It isn’t going to fight against censorship and champion the reader’s right to choose. It’s simply going to carry the least controversial, most popular books that will appeal to middle America.

The ABA is trying not to let this happen. The board of directors recently contacted the Justice Department and asked for an investigation into Amazon and WalMart for illegal predatory pricing. Pricing becomes predatory when a retail outlet takes a loss for the express purpose of forcing competitors out of business.

But I’m not sure the players in this drama are actually taking aim at independent bookstores. What they’re fighting for is a dominating share of the growing online retail market. But in their efforts to undermine each other, the neighborhood bookstore is likely to become collateral damage—and that will change what we read, and therefore what we know and what we think, for generations to come.

Image from AMagill on Flickr