Bryan Caplan  

Bye Bye Borders?

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Economic Naivete... On "job creation"...
When I read this Amazon review, I got a Christopher Walken-like premonition that Borders will soon die:
The bright red cover caught my eye. The title made me smile ("how clever!") and the first sentence I read inside made me laugh out loud in the bookstore. So I went home and ordered it on Amazon.
But don't worry, creative destruction will save us.  Like Superman, it never fails in then end.


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COMMENTS (13 to date)
Jacob Oost writes:

You're assuming no brick-and-mortar subsidies.

Brandon Robison writes:

Hey, that's how I've been doing my book shopping for years! (I might be an even more terrible person because I will often ask for help finding a particular book, then still not buy it and order it on Amazon instead.)

agnostic writes:

Ah, not so fast in this case. If book buyers are using brick-and-mortar stores to sample an experience good, but buying it from an online store (if the sample was good enough), that will indeed tend to drive brick-and-mortar stores out of business and online stores to expand.

But what if brick-and-mortar stores really did disappear? You wouldn't buy the book online because you couldn't sample it at the brick-and-mortar store first. This causes the online stores to die off after the brick-and-mortar ones have already died off. It's like a parasite that kills its host. Of course, once the parasite was wiped out, that would allow the host species to thrive again, continuing the cycle.

We won't see that extreme case, but it tells us what the issues are. In order for online bookstores to represent creative destruction rather than retrograde destruction, they will have to let buyers sample the books before buying. For high-profile books, they already do this, and presumably they could do this for lower-profile ones too (at a cost; can't be trivial, else they'd already be doing it). Or they could outsource it to Google Books, who's already digitized lots of non-superstar books.

So, the empirical question is can online stores implement a sample-all-of-the-goods technology at a faster rate than the rate at which brick-and-mortar stores die off? If so, no big deal. If not, they themselves will fall into decline.

david writes:

@ adrian

You can already sample the books. Even this particular book, for instance: just go to its Amazon page, click the book image, and you can look at the front cover, table of contents, the first few pages, back cover, etc.

Max writes:

[Comment removed for supplying false email address. Email the webmaster@econlib.org to request restoring this comment. A valid email address is required to post comments on EconLog.--Econlib Ed.]

Jacob Wintersmith writes:

Is Catfish an unusually clever spambot? Or has reading past the headline before commenting gone out of style?

[The comment was removed for irrelevance.--Econlib Ed.]

Amazon themselves might be due for some creative destruction if they don't reduce their shipping costs and speed up delivery to international customers. I do my book research at Amazon. Then I buy the book at a UK outfit called Book Depository. It's the cheapest way even though I'm based in Oz.

jakeruss writes:

Bryan,

Also look at the price differential between Amazon and Borders. I've wondered for a long time how Borders "competes" by charging higher prices online for books. You'd pay for better service, but a book shipped is really standard fare.

I use your book as an example, the price of a new paperback copy, Borders has it for 17.95 and Amazon 12.21. Do people really not comparison shop? Or is brand loyalty that strong?

Sheldon Richman writes:

Who goes home first? I order from my phone on the spot! But lately, I just pull out my Kindle and order the book on it. (Or a free sample chapter first in some cases.) I have it in under a minute.

Doc Merlin writes:

I've done that. Heh, I was at a Barns and Noble and ended up buying a kindle book that I saw at the bookstore.

geckonomist writes:

Since I started buying at amazon, I also started visiting the local bookstore more.
Often the books I want to read are not available or too expensive at amazon, and then I just order them at the local bookstore.
I'm just reading much more thanks to amazon , and other bookstores enjoy part of it.

Dan Weber writes:

Am I the only one who thought that "Borders" in the title was going to be BC talking about the boundaries between nations?

I thought we were going to get a free immigration post! Took me a while to correct for that. . .

Tom West writes:

In fact, destroying the market by destroying the bricks and mortar has occurred time and time again, although usually in niche markets. (it used to happen via mail order, now its the internet).

Creative destruction might simply mean that books as we know them will cease to exist. It doesn't guarantee that you personally will be served better. Whole classes of product that I purchased ceased to exist because of consumer electronics. If I want what everyone else wants, its ten times cheaper. If I want something a little off the beaten track, it's not available at any price. Creative destruction, yes, but it doesn't mean in that case it has served *me* well.

Personally, for the book market, I expect big problems.

If bricks and mortar dies, the last great divide between self-publishing and publishing disappears, specifically, the ability to get it into a bookstore. (At present, you can't practically buy your way into bookstores.)

After that, most books have next to no advertising budget.

What happens when Amazon effectively becomes the only way to purchase books? Either browsing dies, or more likely Amazon makes you purchase your virtual "shelf space".

Want to bet that most self-published authors are willing to pay for a bigger marketing budget than most mid-list authors?

Even if the B&M stores die, the book industry will live off the existing authors for quite some time. But after that, good luck getting a shot at success if you aren't don't have a recognizable name or have a big chunk of personal money behind you.

And we all know what that means for books.

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