Proposed merger between Borders Books and Barnes and Noble

Borders Books takeover bid for Barnes and Noble

Yesterday the book industry was met with the astounding news that the number two bookseller, Borders, was bidding for ownership of industry leader, Barnes and Noble. On the news B&N shares shot up nearly 20 percent as investors weighed in on the proposal.

Why would the two largest book chains merge?

First, sales of physical books sold in conventional stores have been falling. This is because online sellers like Amazon.com have been grabbing huge chunks of book sales and major retailers, such as Walmart and Target, have been selling large numbers of bestselling book titles at discounted prices. Add to this the growing number of electronic (e-book) book sales To put it mildly, this has caused a perfect storm for traditional brick n' mortar booksellers who have always prided themselves as the place to go to find books. Now, more and more, the least profitable part of their business is book sales with more profits coming from their in-store coffeehouse along with ancillary sales coming from gift items and greeting cards.

If this deal goes through it will be reminiscent of the merger of K-Mart and Sears over six years ago as orchestrated by real estate investor Edward Lambert.

Depending on whether you were a customer or investor, the results of that merger could be telling when it comes to the proposed Borders - Barnes and Noble deal. In the Sears - K-Mart merger, operations were consolidated in the Sears headquarters in suburban Chicago and the corporate offices of K-Mart in Michigan were shuttered. They then changed the name to Sears Holdings to reflect the ownership of its real estate. To Ed Lambert the Sears - K-Mart deal was all about leveraging their properties by closing underperforming stores then selling the property. This drove the stock price up and satisfied most investors.

On the other hand, the surviving physical stores operating under the Sears and K-Mart names continued to languish right up until today with their stores continuing to lose any competitive advantages. Other than hard goods lines like Craftsman and Kenmore, there are few reasons to shop one of their stores.

If a Borders - Barnes and Noble merger result in similar results, over time there will be fewer bookstores filled with fewer book titles. Some have imagined their bookstore of the future consisting of a cafe, gifts, periodicals and a small number of books. Rather than look through stacks of books customers will instead be ushered to download stations where they would be able to purchase e-books while sipping on a cup of coffee.

Stores would be half the size of today with fewer employees.

However that would be a short term situation as other big box chains such as Walmart and Target add their own download stations.

That could force the Borders - Barnes and Noble stores to downsize once more resulting in a Panera Bread style cafe with gifts and book downloads.

Whatever happens, for some time it has been speculated that the end of the conventional bookstore was on the horizon. All of which has been hastened by the technology that has led to eBooks and eBook readers.

Lessons from Willy

I want to share with you something that happened last night. 

Anyone who really knows me understands that for me, life is all about the journey. My bike has become a large part of that journey because it allows me to see life in slow motion without the frantic speed of life we all have gotten so dependent on while driving around in a car. 

Late yesterday afternoon the ice and snow had cleared enough so I could chance riding 20 miles to Holland. About eight miles from home, along a lonely stretch of backroad suddenly I heard the one sound every cyclist fears. Pop! Sure enough, I had blown a tire. And, worse yet, it was my rear tire--the one that is hardest to change. Like many cyclists I carry a spare tube and tools to change it. Unfortunately the temp was around thirty and the sun was about to set. After flipping my bike over on its handlebars I began to remove the rear tire. Down the road I noticed a young man in hunting fatigues walking a small dog. He came within 50 feet or so then turned around. Without thinking much about it, I continued to work on my bike. 

A few minutes later along came the young man, this time without his dog. He asked, "can I help? I have a garage just around the corner. It would be easier to change your tire there." Looking at my options it seemed like a good thing to do. He then proceeded to hoist my bike into his arms and carry it down the road all the way to his garage; leaving me to follow along with the spare parts. 

When we arrived at the small country house with the garage out back, he opened the overhead door revealing a neatly arranged garage with an older SUV. I asked his name. Willy. Then I asked what he did for a living. "I just like to help people." Did he attend school? No, school didn't agree with him. For the next half hour we worked at removing the old tube and replacing it with the spare. When I pulled out a small hand pump to fill the tire, he offered to use his electric generator. A time saver, for sure. But once we hooked up the generator the new tube only partially filled. Drat! The new tube was defective and had a hole in it. I made some remark about buying cheap replacement tubes at Walmart. He said his aunt just got some sour milk from there. 

He asked, "do you have anyone to call." It was time to throw the lifeline. I produced a cell phone from my pocket and called Anne to pick me up. Luckily she was at home and had not left for our pickup spot in Holland. It would be twenty minutes and she'd be here to save the day. Lucky me. 

Willy asked if I wanted to come into his house for a cup of coffee. I agreed. Inside sat his aunt. My guess is she's in her late 70s. My intent was to pay Willy for his help but I didn't have any money. Willy had mentioned he loved dogs so I used that as an excuse to ask him to write his name and address. "I want to send you a picture of my dogs." His aunt told me she'd write down his name for me. Then she said, "Willy suffers from seizures and can't work." She also said he was mentally challenged. His parents had abandoned him at age 3 and she took him in. "When I took Willy in he was not even potty trained." I mentioned he had said he likes to help people. "Yes, he's a good kid. They took his moped away because of the seizures so it is hard for him to go anywhere to work. So instead he helps neighbors with their lawns and other chores." She went on. "Willy likes going to church. It's a long trip to make but we do it because he loves the Lord so much." I found out his church is located a good 20 miles away. It's a large church located in a suburb just outside Grand Rapids. I wondered why he had left school. Probably was made fun of by the other kids, that's pretty normal for someone who is challenged and can't keep up. He had probably used what the system could offer then was left to his aunt. I imagine when she can no longer care for him he will be placed in adult foster care. In the meantime they are there for each other. Not perfect, for sure. But better than other options. He's in a loving home and can help his aging aunt.  

We continued to talk until Anne drove up. Willy helped me put my bike in her car and we were off. I looked at the house and there was the aunt, waving goodbye. 

I believe things happen for a reason. How many times over the years had I passed by that house without ever noticing it? Hundreds, I suppose. It's one of my favorite back roads to take while heading out on a bike trip. I'll send him a card with the shot of our dogs. Maybe I'll include a gift card. 

As we all rush through life we often fail to notice the little things that make life so worthwhile. Yesterday I was blessed by a young man and his elderly aunt who offered me hospitality without expecting anything in return. In these times of rough financial waters with politicians ranting and raving, and with seemingly uninterrupted bad news followed by more bad news, isn't it great to know that when all the screaming stops there are still good people out there who truly care about their fellow human? Truly, yesterday I was blessed. May you also be blessed today.  

Christmas Food Court Flash Mob, Hallelujah Chorus - Must See!

The difference between "push" and "pull" marketing in book publishing

Having worked with hundreds of authors I can say there are few who understand the differences between marketing a typical small press book and one published by a New York publishing house.

First, a major New York publisher has the ability of placing huge numbers of books in brick n' mortar stores while smaller presses try to avoid all the hoopla and instead publish books that appeal to a distinct market niche. This is because the book business differs from most because it is an industry that allows retailers to return unsold books for credit. And since small presses use distributors (rather than selling direct as many larger publishers do) a book that is returned is generally replaced by one from another publisher while books sold by the big houses are replenished by books they themselves publish. That in itself is huge when it comes to a publisher's bottom line.

What large publishers do is "push" massive numbers of books into the marketplace with the hope a good number will sell. If they don't they can always replace one book title with another.

Smaller publishers instead try to create demand for a book prior to producing large numbers with the hope customers will become interested and order a copy. Classic "pull" marketing.

For pull marketing to work a book needs to create interest through events (such as signings and speaking engagements) or occupy a distinct market niche that is search friendly.

Both push and pull marketing are viable ways to market books. The important thing for prospective authors for them to determine which will work best in their own situation. For example, if you have written the next great novel, but do not want to be bothered with marketing it, then you will want to hire an agent and pursue a major publishing house. If, however, you like getting up in front of a crowd, have a way to engage the public and realize your book has its own distinct niche, then you might better pursue a small press or self publish because you will be far more successful than if published by a major publishing house.

Bottom line: There are viable opportunities with both the push marketing of a major publisher and the pull marketing of smaller presses or self publishing. Key is knowing the difference between the two types of marketing and not trying to force the wrong kind of marketing into the marketplace.

Biking and selling your book

This may be a stretch, but follow my logic.

Yesterday I biked the White Pine Trail which runs over 90 miles from Cadillac, MI to Comstock Park just north of Grand Rapids. The trail is part of the Rails to Trails Conservancy which is transforming abandoned rails to bike trails. http://www.railstotrails.org It is a tremendous program we should all support.

For myself I have experienced some issues with the systems of trails. Mostly it is because rail lines were built on a flat plain so trains did not have to endure the ups and downs of conventional roads. As a result when riding on these trails you do not experience the normal climbing and descending of the natural terrain. It is almost as if riding a stationary bike with moving scenery.

This experience reminded me of authors marketing their books. There is a common perception among authors (and publishers) that if a book is properly marketed upon release, after an initial high rate of sales it will settle down to an even rate that it will maintain throughout its lifetime.

In my experience, nothing could be further from the truth.

I have found that books have sales cycles that begin with great promise as the first copies are sold. But then, after that initial period of exhilaration, there is a slowdown as a book begins to find its long term market. In my opinion this is the most crucial time in the life of a book and when the author must be most involved, even if a book is published by a traditional publisher.

This is because a book, like any new business start up, starts its sales journey with some initial marketing intended to make the market aware of its existence. But, unless a book is continually marketed, it will soon disappear from the consciousness of the market. This is because every second of every day, someone else is also launching their book (or product). As a result the general public is overwhelmed with new marketing messages which then get in the way of you selling your book (or product). Even in the case of having your book published by a traditional publisher, they will only market your book during its first publishing season before moving on to its next list of books.

It is like the comparison of riding a bike along an abandoned rail as opposed to riding on the open road. Marketing can be compared to dealing with the challenges a bike rider experiences when riding the natural terrain. It is easy to descend a hill but hard to climb back up the other side. Those who have the willpower and strength to learn to climb hills enjoy the ride much more than those who do not. Book marketing (or any other type of marketing) is not like riding on flat ground. One cannot expect good results unless they are willing to do the hard work.

That is what marketing is. It is all about the things you do once your book (or product) is available. Yes, there are initial steps that are taken prior to its launch which need to happen with every new venture. But today it could be argued that good marketing is all about what is done on an ongoing basis.

Does Proctor and Gamble stop marketing its Crest brand toothpaste just because it dominates sales in its category? Absolutely not. I imagine the company spends at least as much now to promote its Crest brand than ever before. That is what good marketing is all about.

If you are an author or publisher are you still marketing your book as much now as you did the day it was released?

Take Away Points:

Selling a book (or any product or service) requires continuous marketing.

Books (and many other products) do not have due date nor do they expire on a particular date.

As I've said before; sadly, authors are usually the first to give up on their own book.

Sales cycles are like roads with rolling hills. Those who push hard when sales tick downward will have the most success.

Blogging: Note to Self

I fear that I've become like the plumber who fixes his own house last. In January I pledged to myself to post a new blog every week throughout the year. But, as we reach the beginning of the last quarter of the year, I am averaging less than two per month.

Seems the doctor is not taking his own advice.

Each day, during conversations with colleagues, I tell them to keep writing their blogs.

Yet, I seem to find every excuse not to post new blogs of my own.

Like...

riding my bike


Or...

shooting photos


Or even....

walking the dog

But no matter the excuse, obviously I am not taking the time to follow through on my own promise to myself.


Take Away Thoughts:

What excuse do you use to avoid doing what you promised to do?

How will you get back on track?

Do you have a plan that is doable?

Learning about learning from Benjamin Franklin

Last week I viewed a remarkable interview of Ralph Nader on C-SPAN's In-Depth program. While I do not agree with much of what Nader says, I respect him for his unwavering commitment to his beliefs.

During the interview Nader talked about Benjamin Franklin, who is one of his heroes. Nader said:

Franklin is the demonstration of the power of self-education. He came from nowhere—was curious, observant—and taught himself. With all the current talk about education, there was never any reference to self education, which, of course, is the only way to learn. Instead we have a bureaucratic process of education when self education should be the progenitor. Anyone who wants to teach their children should learn from the autobiography of Benjamin Franklin who once said "he was born too early and in the wrong century." Franklin was a diplomat, writer, negotiator, merchant, printer, publisher, inventor—all self taught.

While we must continue to embrace all forms of education, it is most important to stress life-long learning and the value of having a curious mind.

The world of publishing is undergoing a revolution with new technologies and devices to provide accessibility to learning we would not have dreamed of just a few short years ago.

At the same time the value of great intellectual content is as important as ever. Now, though, we can imbed huge amounts of content through the use of technology and broadcast it instantly around the globe.

Devices like the iPad allow publishers to insert video, photos, audio clips, links to websites, blogs, you name it within and next to the written word. Unlike one dimensional e-readers such as Kindle and Nook, iPad type devices can provide a much richer experience. Within the next year or two there will be an incredible number of new products with even more capabilities. We are just scratching the surface.

While some my bemoan the transition from printed books to these multichannel electronic devices, we must embrace this new technology and use it to its utmost. After all, what would Benjamin Franklin do?

My bet is that ole Ben would be at the forefront of this new technology.