Article 3 of 200
Books: Rumble in the bookselling jungle AMAZON .CO.UK
JOHN LANCHESTER
10/31/98
The Daily Telegraph London
Page 05
(Copyright 1998 (c) The Telegraph plc, London)
FOLLOWING the opening of the first Borders "cultural superstore" in
Oxford Street, about which I wrote a few weeks ago, the second big
American player has entered the UK bookselling marketplace. This is
Amazon , the Internet bookshop whose arrival on the US bookselling scene
caused many a gloomy prognostication about the future of conventional
bookshops in the States.
Last week, Amazon , whose American company is called Amazon .com,
opened their British branch, Amazon .co.
uk, which now stands only a mouse-click away from supplying the customer
with any British book in print, and a good selection of foreign books too, up
to a total of 1.4 million titles.
It is this selection of stock which is Amazon 's Unique Selling Point as a
bookshop; obviously, no actually existing bookshop can supply more than a
fraction of that number of titles. (The biggest bookshops in the UK at the
moment are a tenth of that size.) None of the books at Amazon costs more
than its cover price, including postage and packing, and some of them are
discounted beyond that - in other words, postage and packing are free.
Amazon are able to do that because they hold almost no stock of books.
When you buy a book from them, they order it from the publisher and then
send it on to you, usually within a couple of weeks. (If they actually have the
book in stock, which they tend to in the case of self-evident bestsellers, you
will get it in two or three days.) This means they have no storage or
warehousing costs, which represents a colossal saving over other bookshops.
The other reason they can absorb the p&p is because the booksellers margin
on books is around 50 per cent, so there is still room for profit after the
costs have been absorbed.
That's the theory, anyway. But it isn't as easy to make money selling books
as people think. In practice, Amazon are an example of the kind of Internet
business success which looks a bit funny once you consider the figures.
The company has been in business for four years and has a market
capitalisation of $5.7 billion; many of its employees are, based on their
holdings of stock in the firm, millionaires. (In the course of an American
book tour, I went to their headquarters in Seattle to be interviewed.
Afterwards, it occurred to me that the pleasant, bejeaned, sneaker-wearing,
coffee-swigging Amazon employees were probably the largest
concentration of millionaires I would ever see gathered together in one
office.)
From one point of view, this isn't surprising, since Jeff Bezos, the founder of
the company, is a former investment banker who had no inherent interest in
books or bookselling, but picked it as the likeliest retail business to succeed
over the Internet. No one has really worked out how to make money selling
things over the Net, as yet, and Bezos was determined to use Amazon as a
way of cracking the conundrum.
But the valuation of the company at $5.718 billion is surprising, given that is
hasn't, so far, made so much as a single cent of profit; indeed, its loss last
year was $27.9 million. Do not be tempted to apply similar mathematical
manoeuvres to your own levels of debt. So, although Amazon is sometimes
described as the nemesis of the conventional bookshop, I'm not so sure.
That said, a great many people swear by Amazon . The enthusiasts I know
tend either to live in remote or bookshopless places, or to have a need to find
recondite books. To anyone in that position, Amazon is an absolute
Godsend. One example: a chum of mine, who had needed to buy copies of a
collection of critical essays that he had edited himself, found that he could get
the books from Amazon for two thirds of the price, and three weeks
quicker, than from the publisher (who were, as it happens, Oxford
University Press).
It's fun to use, too - not as much fun as browsing in bookshops, but still
highly diverting. The American site, Amazon .com, is not surprisingly at
the moment more highly developed than its British cousin, but this will no
doubt change over time. At the moment, the most entertaining British
bookshop Web site belongs to Waterstones, at Waterstones.co.uk. A third site
is that of the Internet Bookshop at Internet.bookshop.co.uk.
AMAZON .COM has an enormous selection of reader reviews and
comments, and reports how highly their customers have rated the book on a
scale of one to five. The comments are by no means all favourable (for
instance, from a review of Jonathan Raban's excellent Bad Land, about
Montana: "Many farms remain profitable in this dry Big Sky country today,
a testament to Raban's wrongheaded, feckless, narrow-minded,
from-across-the-pond, limey, eco-sheik pandering thesis. The author gets the
direction of causation exactly backward.")
Amazon .com does, however, have one feature that can only have been
thought of by someone who absolutely hates all writers: it tells you where a
book ranks in sales terms.
I can't think of anything more likely to put thousands of writers into the
foetal position in the corner of the room, silently gnawing on an electric
cable for reassurance. Bear in mind that some poor sod is going one day to
look up his/her own book and come across the words: "Sales rating -
1,500,000 out of 1,500,000." Note to all Internet booksellers: this feature we
don't need.
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