was placed to pay, an industry standard.
Two recent lawsuits, however, could help put independents on a more equal footing with chains. The first was a lawsuit filed by the ABA and its members against Penguin, St. Martin’s Press, Houghton Mifflin, Rutledge and Hughlauter Levin in 1994; Random House was added to the suit in 1996. It alleged the publishers violated antitrust laws by giving secret discounts, more favorable advertising and marketing reimbursements (co-op funds) and credit terms to chain stores. All six publishers eventually settled with the bookstores by signing a consent agreement that barred favorable treatment. Last year, Penguin made a voluntary $25 million settlement with the ABA after finding it had violated the agreement.
The second suit, which is still active, was filed by the ABA and 25 of its member stores against Barnes & Noble and Borders this past March. It contends that these chains solicited and received extra discounts from publishers, including special terms for new stores and expansions; obtained better credit terms than were available to independents; and solicited co-op funds on more favorable terms than were made available to independents.
Ideally, the two actions will position independent stores to better compete with chains. But even with legal protection, buying inventory will continue to be the most costly expense for booksellers.
Of all the perks that chains offer, lower price is the one that usually attracts loyal customers away from independent stores. “If you talk to most black consumers, they’ll tell you they don’t like going to the chains, but it’s where they get the best discount,” says Barron.
While discounting best-selling titles as steeply as a chain may be impossible for small stores, Barron suggests that independents take a book that isn’t moving quickly, make it a book of the month and substantially discount it. By purchasing deeply discounted backlist titles from distributors or publishers, or buying new titles by popular authors directly from publishers, indies can pass the savings on to customers in those first few weeks when readers are really buying up the title.
But industry experts and successful bookstore owners say one of the most important things independent stores can do is to tap into technological advances. “The more [a store] is able to computerize, the more it’s able to become like a Borders Books, which grew [into a chain] because they were able to keep track of their inventory, rapidly reorder what ran out or return what wasn’t selling,” says Fugate, who began using the Wordstock computer system to keep track of Eso Won’s sales in 1995.
Computerizing is also the way to build a customer mailing list by databasing information each time a sale is made. That list can then be used to promote a store’s events, sales and or send out newsletters.
Black book retailers must also look seriously at developing Web sites to expand their customer base by sel
ling to those outside their immediate market area. “I think the expansion of superstores has already had its effect. The next area of competition