Friday, March 11, 2011

On Borders Bankruptcy

I have mixed feelings about the Borders Bankruptcy. Or rather, I have many negative feelings about the Borders Bankruptcy.

First of all, Borders was a major player in the devaluation of the book. By using the greater volume of sales possible for a national chain, Borders generally sold their books at a price below that which would sustain the book industry itself. (And, of course, how much does a life-changing epiphany really cost, but, that's another essay.) They were part of a movement, along with Barnes and Noble and Amazon that actively devalued what they sold. Most businesses spend a lot of money to convince customers their product is valuable. Take cheap, watery, disgusting beer. Millions and millions (billions maybe?) of dollars are spent every year by big beer companies to convince potential customers that they're flavorless alcohol delivery systems are worth buying. Borders, et al., however, told customers, “Our books are cheaper and that's the only thing that matters.”

Lots of businesses make mistakes. Lots of businesses choose poor business models and, as a result have to declare bankruptcy. Innovation is only possible in the presence of failure, so there's nothing weird about this. I can have sympathy for businesses that try something new and fail. The thing is, though, Borders brought hundreds of independent bookstores, who had sustainable business models, down with them. Borders sold books that really, truly cost $25.00 to make everything work, for $15.00 or less. You can make something like work for a while if you're a big enough business, but in the end, you can't make a lasting living selling something for less than what it's worth.

But I'm not happy about this either. If I believed there were independent (sustainably priced) bookstores to benefit (and hire people as a result of) from the hundreds of Borders locations that are closing, that would be one thing, but most of those independent bookstores went out of business years ago. Which means that in most of these locations Borders was the only bookstore in the area. Which means that the business most likely to benefit from these closings is Amazon, perhaps the most destructive force for a substantial (and important) portion of the book world.

But another increase for Amazon's market share (which they already use to bully publishers for better discounts) isn't the only negative (though, the way Amazon operates is a pretty big negative) side effect of the Borders bankruptcy. Right now, Borders owes millions of dollars to most major publishers, and though there is no indication there will be a cascade of bankruptcies from this, it will still most likely mean that publishers will lose millions of dollars. (Just a side note. What would the bookstore world look like if publishers extended that kind of credit to everyone? How many indie bookstores were just one holiday season or one strong quarter or even one “Help us we're struggling” sale from getting back on track? Would there be wide swaths of the country now without a single bookstore? We'll never know, but you gotta wonder about extending millions of dollars in credit to anybody selling anything.) In an industry that is struggling to prove its value to the world, these kinds of losses could have a significant effect on publishing. One of the reasons why great works of literature get to the public, is that publishers have the resources to take risks on a books with more quality then profitability. Now, many publishers will have less resources to take those risks than they once did.

So to sum up on a bit of a downer, Borders was bad for books and Borders bankruptcy is bad for books. 

Hooray for the classic lose/lose. Now, on to some kind of action.

If you love books and your local Borders closed, the best thing to do is start shopping at a locally owned, sustainably priced, independent bookstore. There are a couple of ways to find one. You could go to this list or you could go to and use their store finder. Of course, as I mentioned earlier, the decades long decline of independent bookstores coupled with these Borders closings will leave whole swaths of the country without a bookstore within a reasonable driving distance. If you live in one of those places, instead of going to Amazon, go to Powell's or The Strand first. Both stores sell online and both have massive inventories, meaning you'll almost always find the book you're looking for at one or the other. They also both do used books, so you can find good deals if that is your thing.

Like pretty much everything else, the bankruptcy of Borders isn't just one thing; its recent changes in technology, long term shifts in American culture, and the particular decisions made by Borders. Prices at Amazon. Supermarkets selling Harry Potters at next to nothing. Erosion of book coverage in the media. Hopefully something positive will come from the Borders bankruptcy. Maybe publishers will become more assertive against Amazon. Maybe more book buyers will shop at indie bookstores. Maybe the book as objects sold in bookstores will continue to diminish and eventually be replaced by something else. It is far too early to tell, but as with all news making events, the Borders bankruptcy gives a chance to ask big questions. The question here: how important are books to society? And, since we're asking: what are you willing to pay to make sure there are books around for your grandchildren.

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