How To Compete With the Amazons

Mar 10, 2009 8:09 PM  By

Barnes & Noble quietly announced last week that it acquired e-book seller Fictionwise. The deal brings up a good question: Now that a giant bookseller is in the e-book game with Amazon and Google, can the little guy survive?

They can if they are nimble, and if they are able to carve their own niche in the marketplace.

And this is important, says Forrester Research analyst Sucharita Mulpuru, because the smaller merchant won’t be able to compete on things like price.

“Small pure-plays are not well positioned in this economy,” Mulpuru says. “They generally cannot compete on price, so the only advantage they may have is selection. But in the book space, that’s not all that impressive, because Amazon already dominates the space online.”

The best chance for an independent player to compete in the e-book segment, Mulpuru says, is to join forces with the bigger players through programs such as third-party merchant programs.

“So at least on an individual SKU basis there’s an opportunity to compete—even though consumers won’t likely choose unknown Web stores without a clear value proposition,” Mulpuru says.

E-books and audio books merchant CEO Bob LiVolsi says that’s the position he’s in right now. The advantage his company has over the major players, he notes, is lack of corporate clutter that could keep it from making changes on the fly.

“We were one of the first e-booksellers to sell in the Adobe format, and one of the first to sell e-books for the Sony e-book readers,” LiVolsi says. “Because we’re smaller we don’t have all the company baggage. We can respond more rapidly.”

LiVolsi says customer service is another way a small player can compete online with the big guns. He says his company does not offer live support, but has responsive e-mail support available 24 hours a day.

BooksOnBoard can’t compete with the promotional power of Amazon, which includes celebrity endorsements from the likes of Stephen King and Oprah Winfrey to sell titles. But by working with smaller independent publishers that LiVolsi says Amazon won’t touch, BooksOnBoard can carve out its own niche.