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The corner bookstores take on the book chains

(Page 2 of 3)



He turns and pirouettes into ''Poetry.'' ''The chains are weak here. You'll find Rod McKuen, Kahlil Gibran, and maybe T. S. Eliot, but you won't find Ferlinghetti, Philip Levine, or Czeslaw Milosz. . . . In fiction, name an author and we've got it. The chains have mostly mysteries and science fiction. You won't find many of the classics.''

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He surveys the store with his outstretched arm. ''These books need personal salesmanship. How can you get that in the chains, which pay minimum wage and have inexperienced clerks, not booksellers? They central order their books by formula and computer from some place 3,000 miles away. The stores are homogeneous in character. You can walk into one in San Francisco and one in Dallas, Texas, and they look identical.''

Back in his small, windowless office on the second floor above the ''Environment'' section, Ross doodles while explaining why he and the NCBA filed the antitrust suit last April 13 and took on Avon (a division of the Hearst Corporation), which in 1979 had sales of $55 million.

''In the 1970s we didn't feel the pressure because chains opened up in the suburbs and regional malls. There weren't any independent bookstores there, because they couldn't afford the rent. But now no one is building malls, and the chains are moving in down the block from us.''

Just when independents were scraping by with a scant 1 percent profit, Ross says, they discovered most publishers were charging them up to 10 percent more for their books than they were charging the chain stores down the street. On mass-market paperbacks, Avon, like most other publishers, offers every bookseller a flat 40 percent discount off the list price on orders of at least 25 mass-market paperbacks and a 43 percent discount on orders of at least 15 trade and 20 mass-market paperbacks.

Ross charges that since the early 1970s, Avon has maintained a discriminatory two-tiered pricing structure, granting larger discounts to Dalton, Walden, and other leading chains - regardless of the volume of books purchased - than to Cody's and other members of the NCBA. He has invoices showing Avon has given the chains 44 percent discounts on mass-market books and 48 percent off on trade paperbacks. This translates into Cody's and other independents' paying 7.1 percent more for mass-market paperbacks and 9.6 percent more for trade paperbacks than the chains. Every point of discount is a matter of survival for the independent bookseller. An economic profile commissioned by the American Booksellers Association (ABA), showed an average after-tax profit of less than 1 percent among independent booksellers. In contrast, Dalton reported in 1980 an after-tax profit of percent. The chains' larger profits, Ross contends, are a result of their competitive advantage from the discounts.

Ross believes the publishers' discrimination extends beyond discounts to return policies and cooperative advertising, which favor the chains. The NCBA chose to focus its suit on the ''most blatant violations,'' Avon's discount policies, he says. Avon openly admits to granting preferential discounts to chains. It claims, however, that the discounts are not only ''cost justified,'' but that they are ''meeting the competition.'' Thus what Ross sees as ''censorship of the marketplace,'' Avon and the chains view as nothing more nefarious than red-blooded capitalism.

According to Avon's attorney, Royce Schulz, ''any discount Hearst ever granted was only to meet discounts of competing publishers.'' The discounts are ''cost justified,'' he says, because Avon ''has to give far less services to the chains, and in some cases, no service at all.'' Furthermore, ''in court, their 'David and Goliath' argument will carry no weight. They must deal in real, legal issues.''