News (AP) - Online competition forces price cuts on used books

By Louis Aguilar

The Detroit News

An AP Member Exchange

DETROIT (AP) -- The rise of the digital book has prompted one of Detroit's last independent bookstore operators, John K. King, to promote cutthroat pricing in an attempt to keep alive his two satellite used bookstores.

Signs declaring "Everything Must Go" or "Every Book Must Go" are displayed in the storefront windows of John King Books North in Ferndale and the Big Bookstore near Wayne State University, which King says is Detroit's oldest continuously operating bookstore. The stores have always sold cheap used books, with prices today as low as 50 cents apiece. Last month, the stores started a 20-percent discount on any sale of more than $10.

"If we don't move the entire inventory in a fairly quick time -- a couple months -- then I don't know what I will do," King said.

He hopes the lower prices will drive higher sales volumes, generating the revenue he needs to stay in business.

Cheap prices used to be the niche of used book stores like King's, but digital books -- also known as e-books -- have begun cutting into the new and used book business.

E-books are books consumers can read online or through increasingly popular electronic reader devices such as Amazon's Kindle, Apple Computer Inc.'s iPad or Borders Group Inc.'s Kobo.

Most new e-books sell for $9.99, but some top $20. Many older books are priced at $7.99, and classics in the public domain, such as Herman Melville's 1851 book "Moby Dick," can be free.

Recently, Inc. said it sold more e-books than paper books in the second quarter. The Internet retailer attributed the spike to reducing the price of the Kindle e-reader to $189 from $259. Selling more e-readers creates more demand for digital books.

"First it's the Amazon stuff, the state's bad economy and now all this e-book hype," King said as he stood in front of his Ferndale store on Woodward Avenue.

There is too much hype about e-books replacing real books in the immediate future, said Alberto Greco, a marketing professor at Fordham University in New York who studies the book publishing industry.

"But it will have profound impact throughout the industry," Greco said.

While the digital revolution has endangered King's satellite stores, he is not considering closing his flagship facility, John K. King Used and Rare Books on West Lafayette Boulevard in downtown Detroit. Customers can browse through one million books in two adjacent buildings, one a former glove factory and the other once home to Otis Elevator Inc.'s Detroit offices. King has operated there for 27 years.

The downtown store is less threatened by the e-book boom because it still does solid business selling rare and used books. Plus, additional revenue comes from providing parking for events at Joe Louis Arena and King recently renting the facility for a movie shoot.

Selling a bookstore's entire inventory is a big task. King's Ferndale store alone has 60,000 books, magazines, maps and other items. The Big Bookstore has 10,000 items. The two stores represent about six percent of King's overall sales.

"At the moment, the Big Bookstore has negligible sales," King said.

The store is just a few blocks from a Barnes & Noble store, which has a cafe, music and apparel section, at Wayne State. King has operated the Big Bookstore, which first opened as a bookstore in the 1930s, and the Ferndale store for 22 years.

Since putting up the "Everything Must Go" signs, store traffic has doubled.

"In terms of sales, now some days are OK and possibly good," Ferndale store manager Jason Schusterbauer said. "Before, most days were just bad for a couple months."

King said the deep discounts will last for at least another month before he decides what to do.

"What I can't stand is the free pass the e-books are getting," King said. "Like they are the greatest things and they have no negative aspect. Besides the closing of bookstores like mine, what about the toxic nature of those devices? Books are biodegradable."

Initial research shows the devices are adding to the growing problem of "e-waste," said Gregory Keoleian, co-director of the University of Michigan's Center for Sustainable Systems.

E-waste refers to electronic devices that are not recycled properly and end up in U.S. landfills or in developing countries, where they often are dissembled in unsafe conditions, Keoleian said.

The devices contain elements that can be harmful, he said.

Published: Tue, Aug 3, 2010