Jun 28, 2008
Efficiency, Retail, Pricing Theory

Price Importance in the Book Market: Why buy books at Borders?

Given the vast discounts you can get by buying books on Amazon.com, why do people buy books at bookstores anymore? It doesn’t quite make sense to me. Obvious advantages of brick-and-mortar book stores are the environment, friendly service, and the ability to see books before buy. Obvious advantage of Amazon.com is the ability to buy a book in 5 minutes from the comfort of your own home.

Now I frequent bookstores quite a bit - twice a week, sometimes more - simply because I love the environment and the ability to sit down and ready a book while drinking coffee at a spot away from home. But rarely do I actually ever purchase a book at a book store. Typically I’ll go to a bookstore and look through any book I’m thinking about buying, note the title, then go straight to Amazon.com and order them. More than once I’ve actually ordered books from of Amazon.com while sitting in the cafe on my computer of Borders or Barnes & Noble.

I could see perhaps a 10% price difference being counteracted with the advantages of brick-and-mortar stores, but Amazon’s discounts are usually an effective 30-40% or more (especially after no sales tax in many states). This is a huge price difference and in any other industry I don’t think producers offering significantly higher prices for identical products would be in business much longer.

Although I really am stumped as to why this occurs, one potential answer is simply the culture - older generations are used to stopping by their neighborhood book stores to pick up books. With smaller bookstores, peoples’ claim to “support their local community” might also explain some of this (while even then people’s actions with their wallets tends to contradict what they say), but are you really supporting your “community” by buying books at large changes like Borders or Barnes & Noble?

Among younger generations the most plausible explanation is simply a string desire to have the product immediately. It’s the same reason why many people buy stuff at stores like Circuit City even though the same product is available through the internet (at sites such as NewEgg) for significantly cheaper - they inherently place a high value on having the product in their hands immediately; they don’t like to wait.

Given this last point, it is truly phenomenal to me then when I hear (often) a bookstore employee telling the person that the book they are looking for is out of stock but that they can order it for pickup or shipped directly. Doing this completely takes away the “have it now” advantage of brick-and-mortar stores, so why would anyone ever actually say yes to having Borders order a book for you at list price when you go go home and order the same book delivered right to your home through Amazon? This truly makes no sense to me, the only explanation being some peoples’ lack of facility with computers (though navigating Amazon isn’t rocket science).

If you’re an avid book reader and buy books at Borders or Barnes & Noble, why don’t you just buy them from Amazon?

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