During a recent visit to a Border’s book store, I began to understand why Border’s recently filed Chapter 11 bankruptcy as a direct result of increased competition from on-line retailer Amazon. Now, I may have a bit of a bias towards Amazon. I purchase almost all of my books, electronics, magazines and toys from them. I like Amazon because their prices are fair, it is convenient and they have a vast selection. When I search for books, I can read reviews and watch videos from the author.
The irony is that brick and mortar bookstores like Barnes & Noble and Borders shrugged off the competitive threat Amazon posed during their early beginning in the late 90′s. In fact, Amazon did not generate a profit for 4 years. Jeff Bezos took a long-term view when it came to the success of his company. Barnes & Noble and Borders, like other big Corporations sometimes concentrate on the short-term and focus too much of their time on P&L spreadsheets and quarterly forecasts. These financial statements are important, but satisfying customers, not Wall Street is the most important function of a successful business. If you satisfy your customers, the P&L and quarterly profits will correlate directly with the quantity of customers you satisfy in a cost-effective manner.
Borders thought that Amazon was going to be another dot-com disaster, but they underestimated Jeff Bezos’s unwavering dedication to customer service and his long-term vision of a successful business. The world’s largest river, the Amazon, has unleashed the deadly piranhas to eat up Border’s and other brick and mortar bookstores that are not willing to be flexible and adapt to the technological cultural shift being fueled by on-line retailers.
