How should an online bookstore be operated well?

by chenodeu3 on 2012-03-09 16:15:20

According to reports, dangdang.com lost 2.2 billion yuan in 2011. The CEO of dangdang.com, Yu Yu, stated that publishers, for the sake of protecting their own interests, have already stopped e-commerce websites from selling below cost. Dangdang will not sell books below cost but will take advantage of cost superiority. The media has also reported that member of the Chinese People's Political Consultative Conference and State Council advisor Zhang Kangkang has submitted a proposal, one of the contents being: "Facing malicious price competition from online bookstores, the government cannot be inactive. It can definitely formulate corresponding policies and regulations based on international pricing laws to impose price limits on online bookstores as well as any other type of bookstore. Relevant departments may introduce access measures for online bookstores to constrain and penalize such actions." She further cited examples where the South Korean government stipulates that online bookstores must synchronize prices with physical bookstores and cannot offer discounts lower than 20%. The German government stipulates that after a new book is released, it must first be sold in physical bookstores for a certain period before being sold online, with strict restrictions on discount levels, ensuring that sales prices are not below cost.

From the "Wind Enters Pine" bookstore to Dash Xia bookstore, from Guangzhou Sanlian to Photosynthesis bookstore, from Chengdu Time Simple History Bookshop to Shanghai Wuxiang bookstore, from Shanghai Book City Huaihai branch to the main store of Hongwen Bookstore in Sichuan, there have been too many bad news stories about physical bookstores closing down in recent years.

In light of the current situation, the task at hand for relevant supervisory departments is undoubtedly to establish a fair set of rules for this disorderly competition, regulate book discounts, and allow e-commerce and physical bookstores to compete on the same platform, preventing them from engaging in loss-leader strategies. Of course, implementing tax cuts for the book distribution and sales industry would also be highly necessary. As a reader, while chasing low prices, I understand an important truth: without reasonable profit, what can publishers use to produce excellent products?

According to Yu Yu, dangdang.com has not sold books below purchase price. Despite e-commerce not having storefront costs, courier and packaging transportation fees are still significant expenses, possibly totaling more than the storefront costs of physical bookstores. On the surface, e-commerce book prices have not fallen below purchase costs, but extremely low profits clearly cannot sustain the wages, taxes, couriers, and packaging transportation costs of those involved. It is well known that unlike traditional bookstores, e-commerce plays capital games. Under conditions of large capital investment, unfortunate books have become the top choice for e-commerce to gather popularity and influence, and low discounts have become an infallible method and mantra. In the absence of game rules, e-commerce engages in overall loss-making promotional price wars, disrupting the entire book publishing industry’s supply chain. This even affects authors, as some publishers and authors sign agreements specifying that the royalties for books sold to e-commerce platforms must be several points lower.

It cannot be denied that business philosophy, operating methods, heavy taxation, unequal competition, and rising labor and storefront rent prices are all important reasons for bookstore closures. Besides these, low-discount network customer grabbing has also dealt a fatal blow to physical bookstores. Having bought books in Beijing for over ten years, whether it was Wan Sheng Book Garden, Wind Enters Pine, Guo Lin Feng, Third Pole, or Sanlian Bookstore, Han Fen Tower Bookstore, or Beijing Book Building, except for special-priced books, the lowest discount was always at least 80%. Since the price wars among e-commerce platforms like Joyo, Dangdang, and JD.com began, I became a regular customer of these e-commerce sites. Regarding academic books, which I buy the most, few have ever been priced above an 80% discount. Many readers now jot down book titles in bookstores and then purchase them online. Taking myself as an example, last year I spent about 20,000 yuan on books. Apart from two sets of books with higher code values purchased wholesale from publishers, approximately 15,000 yuan worth of books were all bought from Dangdang, JD.com, and Joyo. Yan Bofei, the president of Shanghai Jifeng Bookstore, once asked me, "If physical bookstores and online bookstores had the same price, would you still buy online?" I immediately answered, "If that were the case, many books might be directly purchased from physical bookstores."

Last year's price war among online bookstores allowed many readers to happily buy cheap books, and dangdang.com's 2.2 billion yuan loss was probably not unrelated to this. The group most affected by this was likely the physical bookstores.