By now the entire world knows of the struggles and woes of Borders Corp. The bankruptcy, the closed stores, the dishonor. Yes, there is a crapload of dishonor.
Let’s talk about the bankruptcy first. The result of the latter mentioned issues have put the superstore company in grave danger of total destruction. Please keep in mind that this is only my take on the situation, but observations I have been establishing for many years. Borders claims to have run out of money, unable to pay their rent, or their vendors. They continue to order books from authors and publishers when they have no money to pay for them. Of course it has been my experience that they stopped paying their bills long before the bankruptcy. There have been plenty of complaints and actions against them for just this. This lack of money has fueled the fire under their big skillet.
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Quite some time ago, readers were fortunate to have the option of going to Waldenbooks within their local malls to browse and buy books. Then everything at Borders changed and they began to kill off the Waldenbooks, first slowly, then whoosh, they were gone. These little gems of comfort and the only good service you could get from a Borders corp store were eliminated. Employees who had been in these stores for years and built relationships were uprooted and given the heave-ho. Readers lost their havens and publishers and authors lost many valuable places to actually sell books. These Waldenbooks either disappeared or were replaced by the little fart stores called Borders Express. We all know Borders stores as big superstores with lots of employees who have no idea what they sell or where to find most of it. Borders followed their misguided instincts and filled many of these locations with employees who neither understood or cared about the book business. How sad. Now, they have closed hundreds of their express and superstores.
Finally, there is the dishonor. Having built a reputation for bad customer service in their stores, they have gone on to excel at even worse service and tactics on their website, including Kobo. With the rise of eBook sales, it is only natural that Kobo use this venue to help finance its floundering company. Everyone knows that the distributor/reseller makes the bulk of the money with regard to eBook sales. Yet, Kobo has felt it necessary to stick a red-hot poker into the eye of the very people who feed its coffers. The publishers and authors. Many other online sellers of eBooks have very strict rules about competitive pricing. If you price an item with them it cannot be priced any lower elsewhere. If it is, they will reduce their price to meet the competitor. Not that big of a deal, unless said discount affects the income potential from the other venues. Say you have a base retail price you must pay: $2.99 to receive a 70% royalty (this is part of a pricing agreement with the vendor that is not Kobo), which a publisher then shares with the author in the form of royalties. Kobo comes along (knowing full well what will happen when they price the $2.99 book at $2.69) and discounts the book, hoping to gain the support of the reader by charging less. What they have actually done, is they have forced the other venue to discount the retail price to meet the lower and knocked the item down from a 70% royalty to a 35% royalty for the publisher. It is not easy to split 35% of $2.69 with an author and keep them happy.
What Kobo doesn’t understand that when they back a publisher into a corner like this is that they force certain actions. One thing that could happen is that a publisher could remove ALL of its titles from the Kobo venue, thereby giving Kobo and Borders what they deserve: ZERO!
Another thing that could happen is that a publisher could write a scathing Blog post asking readers and eBook buyers NOT to make purchases from Kobo because it would kinda make them an accessory to premeditated robbery. That publisher could also ask readers to tell their reader friends who may not read said Blog about the unethical tactics of Kobo.
One would have to ask though, why Borders execs are not smart enough to know that if they want to save their sinking company they should be making friends and not bending publishers, authors, and readers over the proverbial cash counter without giving them flowers first.
Journey of the Heart 
I seldom leave responses, however i did a few searching and wound
up here Borders: You Break My Heart (Publisher Rant) | Life as a Publisher.
And I do have some questions for you if you do not mind.
Is it just me or does it seem like a few of the comments
look as if they are coming from brain dead visitors?
😛 And, if you are writing at additional online
sites, I would like to follow everything new you
have to post. Would you make a list of all of all your social pages like your twitter feed, Facebook
page or linkedin profile?
I feel positively simple-minded to say: More books. More bookstores. How can we go wrong?
Yes, I do know how.
I loved Waldenbooks, too.
Santa Cruz,, where I live and the home base of my protagonist, Regan McHenry, has wonderful indie bookstores which are popular and well supported. A few years back we got a Boarders one block away from our big name, Bookshop Santa Cruz. The town was in a tizzy. Windows were broken. Borders pored on the deals. We all had to go see what the competition looked like.
You nailed it, Karen. The store was huge, impossible to navigate, and the employees were clueless and, for the most part careless. Bookshop fought back with their own deals.
We said goodbye to Borders last year. I know many writers and small publishers in town who placed books in Borders. They never got paid. (Some were not allowed to remove unsold books after it was announced the store was closing.) Bye-bye Borders. You won’t be missed.
Nancy Lynn Jarvis
Well said, Karen. My worst booksigning ever was at a Borders. I think they got just what they deserved.
Excellent post, Karen. I had no idea they were up to this with KOBO! From my experience around here, Borders is going downhill fast. In 6 years, I’ve never felt welcomed in the store and haven’t gone back there for a booksigning in more than a year.
http://www.marycunninghambooks.com
Karen,
Your comments were backed up this weekend by a well known mystery and Hollywood writer, Lee Goldberg, at the California Crime Writers Conference, which I attended. He said when KOBO reduced the price on his eBook, Kindle (Amazon) matched it and he lost a lot of money. He threatened to pull his stuff off KOBO and they relented.
Well said, Karen. My only experience is with a Borders Express; the staff was very nice, but the selection was so limited it just wasn’t a place where we wanted to shop. As an author, I really disagree with their discounting the price of eBooks and messing up the royalty agreements with other distributors.
It’s a new world, and we all have to adjust. So far, I like it very much.
Great blog and I hope you pull all our stuff.
cmr
I will miss Borders because it offered a little bit different variety than B&N. I also miss Waldenbooks. I noticed throughout the years how much their stock reduced time after time until I stopped going. As for Kobo, never heard of them.
Borders needed to stay watchful and keep on top of the game with the eBook situation.
Karen,
As one of your authors, I am thrilled to know you’re looking out for all of us. I was unaware of the antics of Borders (and was actually mourning the loss of the one in Anchorage, although I’ve never had a chance to visit it), but now, having the info you gave me in the post, I’m sorry ONLY for those employees at Borders who may have been knowledgeable and interested in books. Keep up the great work. Those of us who have a vested interest in these matters–but who (like me) don’t have a handle on the background–need and appreciate you for keeping us in the loop!
Blessings,
Deb Harper
My son worked at the local Borders. He loved books, and was always able to point the customer in the right direction. They let him go, by the simple tactic of never assigning him any hours. After a while he stopped checking and they were able to say he quit.
This Borders is closing.
Part of my previous response to George was removed from the post.
I am fully aware that Indigo owns 58% of Kobo, but Borders is also an investor, so…
As for George’s claim that Indigo is showing strong numbers. Not so much. There earning peaked in 2010 and have been steadily declining ever since. I have no beef with Indigo, done business with them in the past, no problems. Unless of course they are the reason Kobo is doing business the way they are.
Their current stock value (as of 6/10/2011) is 12.63, which is hardly strong, even in this economic climate.
http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C124E6770
Ahh George, (how funny that you share my father’s name.) A few things…
I am quite familiar with the royalty structure as I am a publisher and I deal with it on a daily basis.
>> Also, look into WHO OWNS KOBO!!!!! Indigo Books and Music.<>THE PUBLISHER’S DETERMINE THE PRICE OF EBOOKS!! NOT THE RETAILER.<<
That is very true. The publisher does set the retail price, and as the publisher, I set the retail price at $2,99, not $2.69, which is what Kobo discounted it for, which put my company in breech of agreement with Kindle because I signed a contract stating I would not sell an eBook for less money on any other online retail site than the price I set on Kindle. Which I DID NOT. Kobo, already aware of the pricing issue with Kindle, lowered the retail price with their discount. When Kobo did this, Kindle had every right to match the price and they did, which lowered our earnings from Kindle by 35%.
As for inveistigative journalism. Do YOUR research, I am not a journalist. I am a publisher who is being rooked by Kobo. As are many other authors.
First, do some research in regards to the whole royalty ideology you speak of. It is incorrect. You also put down Kobo as you think it isn’t a healthy company. Do research. Please, before you write again. Do Research!!!!!!!! Site sources.
The problem isn’t the retailer, nor the distributor. The publishers have no one to blame but themselves by not protecting their content. Also, look into WHO OWNS KOBO!!!!! Indigo Books and Music. Canada’s flagship bookstore. They post strong numbers, even in today’s climate. I cannot believe you say Kobo is UNETHICAL?!? Oh yeah, I will finish off my rant by saying THE PUBLISHER’S DETERMINE THE PRICE OF EBOOKS!! NOT THE RETAILER. Terrible investigative journalism.
Very informative post! Thank you. B&N is also laying off the most helpful people in their stores – the CRMs. I realize bookstores are trying to survive, but it seems like what they need are more people who can help readers.
I never hear about Kobo and probably with good reason. I, for sure, if were going to e-publish, would not use them!
And I thought it was just me who thought Borders service stunk. I haven’t bought from Kobo yet, and now I won’t for certain.
Great post Karen – and totally agree on all points. Readers and too many writers have no idea what happens in the industry and how little authors actually make on book sales. I’m in a small city and we only have 1 book store and its a joke. I went in to ask for contact information for the corporate office and one employee gave me the 800 number. Another employee made a point to tell me their toll free number was not meant for use by authors – it was only for their customers. Duhhh – where would a book store be without authors?? I understand that may be a complicated scenario for her, but writers write books, and book stores sell books — hmmmm, doesn’t seem that confusing to me.
Dave, I was not going to mention names, but since I posted this as a publisher, I will slip that hat on and be candid.
Kindle has a price/royalt structure: books priced below $2.99 earn a 35% royalty payment for sales. Any books, $2.99 and up receive a 70% royalty. They have a VERY strict policy that if an eBook is priced lower anywhere else on the web, Kindle will meet that laower price.
Kobo’s lower price of $2.69 for a $2.99 eBook, Kindle drops its price to $2.69 which is below $2.99 and thereby no longer qualifies for the 70%.
I always complain about authors giving too much info in the public forum that readers don’t care about, and I apoloize for going against that comment, but I think readers might be interested in this because if the publishers of their favorite authors continue to lose money, they will make those books more expensive to readers to make up that lost income. So, in this instance, it is in the reader’s best interest to support those sites that work with the publisher, as opposed to those that don’t.
Did this help?
Karen,
Thank you for your detailed reply. Yes, that explains quite a bit! Thank you!
So, one course of action could be for publishers/rights-holders of various e-Publications to pull them from Kobo entirely? That would make sense.
I don’t own an eBook reader, yet, although I do know that Kobo is now much further down the list than it used to be. If only Kindles had the screen size of an iPad! (My poor vision demands iPad size…)
Again, thank you for clarifying.
Yours,
Dave
Great Post Karen. I hardly knew the Borders in my town. It was a little far and I had to drive by Barns and Noble on the way where I like to go for Starbucks+Danish+sit in comfy chairs and peruse books. So no loss to me personally. But I feel your pain that the loss of Waldenbooks, replaced by a Mega Book store with no heart is a shocker. Maybe all authors should get together and start a author owned chain of bookstores. Get a clue Borders.
I’d be willing to license the Author Guy name…
Actually, some Borders had (and I say ‘had’) dedicated employees. I’ve always favored Borders over B&N for my own signings and had some great times, great support and great fun. But even these employees labored under management (top management) who didn’t give a crap or didn’t understand. I’m sorry about what’s happening to them and wish they would have better guidance.
Oh, and I like the way you slipped ‘fart’ into your post. I’m afraid I’m a bad influence on you.
Norm
http://www.normcowie.com
I’m not sure I understand. If the eBook reader Kobo discounts a book at 2.69 from the industry standard price of 2.99, how does this reflect a decrease in royalty from 70% to 35%? Is there some sort of typically-used tiered percentage that authors/publisher’s get based upon the price?
Could you explain this, please? I’m having a difficult time figuring out how the industry works in this regard and, therefore, not really understanding your conclusions.
Thank you,
Dave
Unfortunately, Smashwords is not the only distributor that Kobo gets books from and it appears the others do not have pricing agreements to protect us. Our titles in question came from a source other than Smashwords, but that source has been as quick and pleasant about getting the titles removed as SW. Both sources have been great to work with.
Kobo on the other hand, knows exactly what it is doing and doesn’t even feel bad about it. They can’t get us with one venue, they get us with another.
I was a huge fan of the Waldenbooks division and it did break my heart to watch them disappear.
I’m not usually one to play favorites, but I can tell you that Kobo is nowhere on my list of good things…
I was lucky in that the staff of the Borders near me (now closed, alas) was knowledgeable and very supportive of me. But I had the same problem you did with Kobo (through Smashwords). They lowered the price of my book, and still didn’t sell any– but that caused Amazon to lower the price to compete, costing me a very nice piece of change until I could force SW to remove the book from Kobo.
I agree with everything you have in this post. Long before Borders filed bankruptcy I would rant about refusing to go into one of their stores to buy anything.
A Borders application for employment must read like this;
Are you the rudest, inconsiderate, and most uninterested person you know? Do you have zero interest in helping someone? Are you clueless on the literary industry and not even sure what a book is? If you answer yes to any or all of the above you are a person Borders will hire.
That store drove me nuts. Even now as an author I am not bothered they are going OOB, I said way back then I wouldn’t feel comfortable placing one of my books on their shelves. I don’t have enough time or ability to hire that many people to inform customers “my book is here”
Loving your posts of late, Karen! Blog, blog, blog! I want more!!!!!