updated 09:25 pm EDT, Thu October 22, 2009
Retailers allegedly selling books at a loss
The American Booksellers Association, a group that represents many independent bookstores, has submitted a letter to the US Department of Justice asking for an investigation into the pricing practices of Amazon.com, Walmart and Target. The organization is accusing the retailers of illegal predatory pricing.
The ABA suggests that the outlets are selling many hardcover bestsellers for prices around $9, while the actual retail falls between $25 and $35. Examples include titles by John Grisham, Stephen King, James Patterson and Barbara Kingsolver.
Offering general discounts is not viewed as illegal or predatory, however the ABA claims most books carry wholesale pricing approximately 45-50 percent below the retail price. For a $35 book, retailers reportedly pay around $17.50 in most situations. The ABA points to news reports suggesting the accused retailers have not received special terms for purchasing the books, which, if true, would indicate the outlets are selling each unit at a significant loss.
"What's so troubling in the current situation is that none of the companies involved are engaged primarily in the sale of books. They're using our most important products -- mega bestsellers, which, ironically, are the most expensive books for publishers to bring to market -- as a loss leader to attract customers to buy other, more profitable merchandise," reads the ABA letter to the DoJ. "The entire book industry is in danger of becoming collateral damage in this war."
The trade group also raises questions regarding digital editions sold on devices such as the Kindle. Amazon currently offers Dan Brown's latest book, The Lost Symbol, for $16.47 as a hardcover or paperback edition. The print price is already 45 percent below retail, while customers ordering the Kindle version only pay $10.
Although the ABA does not go into great depth specifically targeting e-book readers, the subject appears to be a fairly high priority on the list of concerns. "We believe the loss-leader pricing of digital content also bears scrutiny," the letter reads.
The open letter lacks specific details regarding a suggested set of regulations to counter what the ABA sees as potentially "catastrophic" practices. The document was submitted by the ABA Board of Directors, including individuals associated with smaller retailers such as Books Inc., Bank Street Bookstore, SFSU Bookstore, and Water Street Bookstore, among others.