Steamboat booksellers share thoughts on e-books, online sales
March 21, 2010
Steamboat Springs — When Ron and Sue Krall completed their move to Steamboat Springs last summer, one set of items took a lot of lifting.
"We moved 54 boxes of books. We don't have room for 54 boxes," Ron Krall said. "We have a really hard time parting with physical books. … There's something very comforting about having them. They're part of who you are."
The Kralls own Off the Beaten Path Bookstore & Café, on Ninth Street just off Lincoln Avenue in downtown Steamboat Springs. Around the corner on Lincoln is Epilogue Book Co., where owner Erica Fogue has a similar love of tangible pages bound between two sides of a cover.
"I don't think I've ever been without three books," Fogue said about her travel habits, which always include several books because she can't decide on just one for a trip.
The owners of Steamboat's two independent bookstores, not surprisingly, are devoted, arguably fanatic lovers of books in their physical form. They'll talk at length about the joys of getting comfortable with a great book and the desire to keep it on the bookshelf for future enjoyment.
But they know their industry is changing dramatically, and their business models are changing as a result.
Independent bookstores face a two-headed dragon, consisting not only of online sales of physical books but also online sales of electronic books, or e-books, and their portable devices. The popularity of electronic books and reading devices is surging this year.
The online business management site BNET and the mobile ad company Mobclix reported this month that for the first time, the number of e-books surpassed the number of games in Apple's iTunes store, in a tally of about 27,000 to 25,400. Apple's book applications for mobile devices are skyrocketing in anticipation of the iPad, a tablet-size computer that's slated to go on sale April 3 and could challenge the current, overwhelming Goliath of e-books, Amazon.com and its Kindle device.
The trend — which includes other e-book devices such as Sony's "Reader" and Barnes & Noble's "nook" — spurred BNET to call 2010 the "year of the e-book" and quote one industry leader's estimate that 15 million electronic book devices could be sold this year.
Ron Krall acknowledged the convenience of e-books.
"If I was still in my corporate job and traveling like I used to … I would own a Kindle and read most of my books that way," Krall said. "I've read a book on my iPhone."
Fogue said several longtime customers have come into her store somewhat shamefaced and "confessed" to owning a Kindle while still, fortunately, buying a book at Epilogue.
The stores are changing their business models in similar and different ways.
Both stores have Web sites featuring staff recommendations and local events. A sign inside Off the Beaten Path reads "if you like us when you're here, shop with us when you're away," portraying the Kralls' efforts to boost Web sales.
Krall said those sales aren't as strong as he would like and said "it would make a huge difference" for the store if customers mixed in one or two purchases at http://www.steamboatbooks.com with their purchases at other sites.
Part of the value in that, Krall said, is shopping locally and supporting the city's economy and workers.
"We know we can't compete on price — we don't do the volume, and we don't get the deals," Krall said, referring to mega-retailers such as Amazon.
Fogue said her Web site mostly drives sales inside the actual store.
"I think for independent bookstores, it's more of a marketing tool," Fogue said about epiloguebookco.com. "We don't really make money on Web sales."
Krall sells e-books on Off the Beaten Path's Web site and said he's considering the idea of selling "bundles," where a customer can pay one price of an e-book online and the hard copy they pick up in the store; or online shopping cards that people buy at his store and then use for online purchases.
The surge in e-books and online sales is having widespread impacts on e-commerce regulations and the publishing industry.
Earlier this month, Amazon drew national headlines for firing its Colorado affiliates in response to a tax measure, HB10-1193, passed by Colorado Legislature and signed by Gov. Bill Ritter. The new law requires online retailers to either collect the same sales tax sold in physical stores or inform their customers annually of the sales tax amount owed.
Fogue and Krall said the law is intended to provide sales tax fairness for brick-and-mortar businesses competing with out-of-state online retailers. The American Booksellers Association, which lobbies nationally on sales tax equity issues, sent a letter to Ritter this month asking for his continued support against "the bullying tactics of Amazon." Opponents of the tax measure have said it is over-regulation that stifles the free market, hurts Amazon's affiliates in Colorado and has a negative impact on statewide jobs.
Bookstores across the state, including Off the Beaten Path and The Tattered Cover Bookstore in Denver, signed the ABA letter.
Krall said regardless of the dispute, the tax law passed this year was a compromise that could be strengthened.
"I think we'll be back in the next legislative session," he said.
Fogue said she strongly supports the ABA, as well, and said the recent dispute is only one example of business hurdles for small bookstores. The publishing industry has long offered discounted bulk rates to large chain bookstores but is now drawing a line in the sand with the rise of e-books, Fogue said.
"With digital books, publishers are finally saying, 'This is a fixed price,'" Fogue said. "Digital books will hurt Barnes & Noble more than it hurts us. … The publishers can't survive not charging the actual value of the book."
In February, Amazon considered dropping Macmillan Publishing because of price disputes but ultimately continued selling Macmillan products.
Amid the industry turmoil, both Steamboat stores continue to emphasize their core values.
On Thursday, a customer came into Epilogue on her way to a baby shower. Fogue helped her select a colorful book for the baby.
"I think we should stick to our forte, which is physical books," Fogue said. "We need to focus on what we do best. … Books are not widgets. They are our legacy, our heritage — they are our culture."
Krall said in his opinion, "there's still a significant chunk of the reading public who will prefer a printed book."
But that sentiment might not be permanent.
"You roll the clock forward 50 years, and I don't know about that," Krall said.