In 2003 I gave a talk at DucKon about the changes in the bookstore business, and how I felt they affected my shop (The Stars Our Destination) and why I eventually decided to close down. I did keep notes from back then, but of course I can't find them now that the topic was brought to mind by james_nicoll.
Let's start this essay off with some background: in 1988 I used my lifelong interest in science fiction, the support of my marvelous husband, the partnership of an excellent friend from Minneapolis and a small amount of savings (~$10K) to launch a speculative fiction bookstore in Chicago.
Remember back to those misty days, where the big chain stores were those pocket-sized Waldenbooks, a scattering of Daltons and that pinnacle of savings: Crown Books. The internet wasn't around yet, though some of us would ftp files to each other. A diligent reader of SF used a combination of new book store, used book store and mail order to feed their habit, unless they were lucky enough to be near one of the dozen or so independent specialty shops in various cities.
I opened with the goal of keeping in stock at least one copy of every science fiction, fantasy and horror book in print. No, don't laugh so hard - it was actually achievable then. The only areas I had to skimp on were the fabulously expensive (special limited editions) and narrowly focused scholarly works (expensive AND hard to sell).
There were about 15 major publishers, pretty much all based in New York City, and a scattering of half a dozen or so small presses that would publish one or two books a year. There were 80 to 100 new books a month, mostly mass market paperback.
Rather than go through each change as it occurred I'm going to zip all the way forward to 2003, the year I decided this just wasn't working any more. At that time, I had observed five major factors that affected my business and influenced my decision.
Our scuzzy, run-down neighborhood gentrified, property taxes quadrupled, and even before the rent hike would have hit, we saw a 65% loss in storefront sales over the space of nine months, pretty directly attributable to our customers being forced out of the area. Mail order continued strong and steady, but that's not enough to cover a 3000 sqft shop in what's now a prime district. While being the largest factor to affect the shop, it was also the only one I had any control of, which is why we moved about four miles north to a smaller location with better parking and equally excellent transit. Didn't help.
Now here my memory may not properly reflect reality, but I remember the Big Two, Del Rey and Bantam, being about half of the new book sales with "we try harder" Tor and the rest adding up to the other half. Jump ahead 15 years: Del Rey and Bantam are both owned by the same multinational conglomerate, and have drastically reduced their output. Previous major players like Questar/Popular Library/ Aspect/ Warner Books (that's just one publisher) drop down to one book every other month or so. Many more books come out as hardcovers and tradepaperbacks - wonderful for selection, but hard to pay for the increase in inventory costs. Tor becomes the leader in both quantity and quality. Big publisher titles are a much smaller percentage of sales compared to 1988.
In the '80s a small press book was a rare and wonderful thing. A new Arkham title would ship, and we'd sell 50 to 100 copies. Nowadays it's still wonderful, but many of the "small" presses are producing as many or more books that the "big" guys, and the number of presses putting out quality work is staggering. As a bookseller, this was disastrous. Most small publishers don't have the staff to solicit shops for orders, many don't even produce a catalog. In the worst cases, I had to psionically determine they had a new book coming, then harrass them until they sent some. Sales terms were usually much worse than with the big publishers, as books were usually non-returnable AND had a smaller discount AND charged shipping. If only they weren't so beautiful...
The explosive growth of the chains had a multi-layered affect. Barnes & Noble and Borders each opened their largest-ever flagship stores 50 feet away from each other, and three blocks south of me. New release sales took an immediate hit (which is really too bad, since it's where the greatest profit is) but they did draw more readers to the area, and used book sales saw a modest increase.
Amazon, other booksellers whose success depends more on their stock prices and ad revenues than actual profit on sales.
No one factor was "the killer", but taken all together, it was time to find something else to do.
Ah, I've run out of energy - more later perhaps ...