Can bookstores survive financial challenges?

Sunday, December 15th, 2013 By

Bookstore

Local bookstores face serious financial challenges in a struggle to survive. Image: Flickr / yosoynuts / CC-BY-ND

With over $431 million in sales and over 22 million units shipped in 2009, the e-reader market is exploding. This is leaving many wondering — can bookstores survive? The short answer is, with creative marketing and short-term loans, some bookstores might survive, but it won’t be easy.

Can bookstores survive major changes?

There are dozens of major challenges facing brick-and-mortar bookstores. E-readers are often called out as the biggest challenger to a traditional brick and mortar store. Estimates are that about 30 percent of books are currently sold online either in paper or e-book format. However, bookstores are already feeling the crunch — Borders, the original big chain bookstore, is restructuring in an effort to survive. Asking can bookstores survive is really asking if bookstores can find a way to capture a changing market of readers.

Financial challenges facing bookstores

Books, like many other retail products, are a high-cost product to keep on the shelves. Many independent bookstores end up taking out short-term loans just to meet overhead and inventory costs when sales aren’t making ends meet. From Baltimore, Maryland to Reno, Nevada, bookstores are having to find new ways to bring people in — most of which require longer hours and more employees, which in and of themselves cost money. Authors present another unique financial challenge, as they are often coming out of e-book deals with only pennies per copy for their life’s work.

Are e-books the solution for independent bookstores?

As the e-book market grows, some say that bookstores can survive by selling e-books. The Google e-bookstore offers an affiliate-style program that allows bookstores to get a portion of the sales of an e-book. Google puts these bookstores in a unique position of both competing against and making use of the Google system. Bookstores will not get nearly the margin they usually do on a product, but because the e-book does not require physical inventory, it may have lower overhead. The challenge is convincing customers to spend money through the online home of a local bookstore, rather than an internet juggernaut bookstore.

Soures:

Simba Information
Finding Dulcinea
Becker-Posner

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