In which Amazon goes to war with New Zealand bookstores

An essay by Sarah Forster from Booksellers New Zealand about the threat that the Amazon-owned Book Depository poses to bookstores – and, ultimately, readers.

Every time I tell somebody that Amazon owns Book Depository, they’re surprised, astonished, aghast. So let’s put that on the record. Amazon purchased Book Depository in 2011. And they’re here to win your money and your loyalty.

As Stuff business reporter Rob Stock wrote in early October, “Amazon-owned Book Depository is on a marketing and public relations push in New Zealand.”

Later that same month, on October 25, Book Depository sent an email to all of its New Zealand subscribers alerting them to check out New Zealand’s best-selling books of the decade. I clicked through to find the Booksellers New Zealand Bookshop Day promotional list voted for by bookshops. The strapline read, “We’ve compiled a list of most popular books in New Zealand.” Who’s we? Book Depository sent out its email two days before New Zealand Bookshop Day, when bookstores all over the country were celebrating these very same titles with displays, discounts and more.

It was clever marketing and also potentially damaging: it was calculated to harm bookshops on the one day that celebrates bricks and mortar.

Book Depository has form. It sent at least two staff this year to the 2018 Auckland Writers Festival to hand out flyers at the Aotea Centre. It was an aggressive tactic. Together, the Women’s’ Bookshop and Unity Books have a contract to operate as sole booksellers at the festival, which attracts tens of thousands of book buyers. Carole Beu, owner of the Women’s Bookshop, was alerted to the Book Depository’s presence by customers. “They were outraged about it, and had told them to fuck off,” she said. Beu contacted festival management. They had a word with Book Depository and asked them to scram.

That was overt; some of its marketing is done by stealth. If you Google “booksellers”, Book Depository will be the first hit that comes up, thanks to a strategically placed Google ad. And let’s not even get started on the behavioural retargeting. How long must you be reminded to buy that ill-advised book, toy, or dress you looked at once?

Here’s another thing: according to Nielsen data, books are the fifth most-purchased item online behind airline tickets, clothing, entertainment and travel services. According to an article in The Register, almost 600,000 Kiwis bought a book online last year. Where from? The data isn’t available, but while some of the purchases come from the 47 bricks and mortar stores in New Zealand that have online shops, many are from Book Depository which claims that New Zealand is its second largest international market.

Melanie Laville-Moore, director at Allen & Unwin, told Stuff’s Rob Stock that she believes Book Depository might account for as much as 15-20% of all books sold to New Zealanders.

It all comes down to price and the cheapest offer. The bottom line is that bookshops can’t compete with Book Depository. Of course they bloody can’t. As any economics graduate can tell you, one of the biggest reasons that some shops can offer products at lower prices is, quite simply, economy of scale. If Book Depository pre-orders 20,000 copies of Past Tense, by Lee Child, and Wardini Books in Havelock North pre-orders 30 copies, it doesn’t take rocket science to work out why one can afford to sell it at $24 and the other $38.

This also hurts publishers. In exchange for the privilege of having their books stocked by Amazon and its international subsidiaries, they have to cut into their own margins which could otherwise be put towards publishing titles that may not be commercial sellers, but encourage and promote literary talent. A lower margin also means a lower royalty pay-out for an author, as their pay is usually a percentage of the book price.

Bookstore Depository will have to start adding GST to their books from October 2019. Good. But it still won’t be a level playing field with bookstores, which have other costs that international warehouses don’t have to pay.

The Spinoff’s Duncan Greive illuminated the issue when he wrote about the sale of T-shirts: “The tees from the New Zealand-based competition attract GST and duty on the product itself. The staff handling them are employed here, and thus contribute PAYE. Assuming they’re profitable, all those businesses pay company tax. The same is likely true of the commercial spaces they lease, and of the courier companies used to transport the goods to you.”

These taxes, as well as rent and rising staff costs are why you don’t see booksellers riding down the high street in their Teslas, books piled high beside them.

US research tells us for every $100 spent in a local business, $68 is likely to stay in the community, versus $43 when spent in a national business. In New Zealand, we’re talking about spending within the nation versus internationally. The moment you type your credit card details into Paypal for Book Depository, you lose sight of where that money goes. The only piece of the money that may return to New Zealand for an internationally-published book is the bit that goes to the New Zealand courier company who’ll be the final carrier for your item.

Bookstores have been disappearing here and overseas at a fast rate. In the US, only 58% of the number of bookshops open in 2004 were still open in 2017. It’s a similar story for independent bookstores in the UK – from 2005-2017, only 56% remain open.

New Zealand figures are available at figure.nz but don’t include individual stores, just legal business entities. It shows 736 legal entities were operating in 2004, and only 366 this year. One result of this decline is that there are now many towns in New Zealand that don’t have a bookstore at all – including my childhood hometown of Westport.

If you’re lucky enough to live near a bookstore that has a wide range of new books published here and overseas, then head on in for your Christmas book gifts now. Spending your money there is building your community. If you live too far away, search for a New Zealand bookstore that has an online service. As for Book Depository, if you leave it until after December 5 (Thursday) to start your Christmas shopping, it can’t guarantee your book will get to you by Christmas. You’re better off local.

Sarah Forster works for Booksellers New Zealand


The Spinoff Review of Books is proudly brought to you by an actual bookstore with knowledgeable staff and a brilliant selection of books published in New Zealand and overseas, Unity Books.

Related:


The Spinoff is made possible by the generous support of the following organisations.
Please help us by supporting them.