November 6, 2014
The darkest timeline: Powell’s Books, a wholly owned subsidiary of Amazon
by Liam O’Brien
Oregon had two new stories to celebrate today. The non-cannabis one is in an unassuming piece in the Willamette Week that describes the moment when indie bookselling almost signed its own death warrant.
In order to fully appreciate this story, you have to flash back to 1996. 1996 was a long time ago, guys. Infinite Jest was on tour. Kobe Bryant had just been drafted. Dole/Kemp was a thing. And a young Seattle website that sold new books was looking to expand into selling used stock. That website was Amazon, and their target was Powell’s Books, then run by Michael Powell. Powell’s had beaten Amazon to the book e-tailing punch by two years, and Jeff Bezos invited Powell to a meeting. This itself is no secret; Powell has spoken of it before to the PNBA, and refers to it in broad terms in the store’s press kit.
We do a lot of business with Amazon. Amazon has been a good partner for us. I had a sit-down meeting with Jeff Bezos when he started his company and talked to him about how we could work together. They took some of our growth away in new books, but we just refocused on used books and kept charging ahead.
The Willammette Week piece, however, goes into greater, terrifying detail.
Bezos wanted Powell’s to be its sole supplier [of used books]. He estimated it would translate to $200 million in sales annually.
There was a catch.
“The condition was that we couldn’t do it under our name,” Powell says. “It had to be under the Amazon name. We would in effect have been a warehouse distribution center for Amazon. We wouldn’t be Powell’s.”
At the time, Amazon’s largest competitor was Barnes and Noble, who were seriously outflanking Bezos’ enterprise in revenue; in Brad Stone’s Amazon history The Everything Store, he describes another 1996 meeting, this one between the B&N brass, Bezos, and Amazon board member Tom Alberg:
[B&N] were going to launch a website soon and crush Amazon. But they said they admired what Bezos had done andnsuggested a number of possible collaborations, such as licensing Amazon;s technology or opening a joint website. “They didn’t come right out and offer to buy us. It was not particularly specific,” Alberg says. “It was a pretty friendly dinner. Other than the threats.”
Had Amazon capitualted to B&N’s threats/offers, we’d surely be living in a massively different publishing landscape. Instead, Amazon and B&N spent the next few years in a series of legal/innovation clashes, and we know how that ended. Powell, meanwhile, took a canny approach to the two retail giant’s struggle, concentrating on used and out of print book sales and partnerships with both retailers – and in 2014, all three are left standing, though one clearly dominates in overall sales.
However, had Powell’s agreed to partner with Amazon, there’s no question that the future of indie bookselling would have been dealt a crippling blow. Like John Connor, or George McFly, Powell’s isn’t just a beacon of hope. Imagine no Kyle Reese, no Marty McFly guitar shredding. Powell’s is the household name when considering how large indies survive in the age of Amazon, and it employs massive staff of talented and vital booksellers. And while their history of labor relations hasn’t been sterling, there’s no doubt that the union they currently have wouldn’t have a snowball’s chance in an Amazon fulfillment center of forming, had Powell agreed to the deal on that day in 1996.
I don’t even want to imagine the rest of the implications for the indie world, had this deal been made, so feel free to send your most terrifying ideas to me at [email protected] so I can read them through my fingers, which will be firmly clamped over my eyes.
Liam O’Brien is the Senior Sales & Marketing Manager at Melville House, and a former bookseller.