{"id":16722,"date":"2015-08-19T08:30:18","date_gmt":"2015-08-19T12:30:18","guid":{"rendered":"http:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/?p=16722"},"modified":"2015-08-19T08:30:18","modified_gmt":"2015-08-19T12:30:18","slug":"guest-post-straight-talk-on-amazon-and-communities","status":"publish","type":"post","link":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/?p=16722","title":{"rendered":"Guest Post: Straight Talk on Amazon and Communities"},"content":{"rendered":"

Today’s guest post, by Eight Cousins Bookstore founder and longtime bookselling lioness Carol Chittenden, is not to be missed if you want a rational, fact-filled, beautifully articulated article about the effect Amazon is having\u2014beyond local bookstores\u2014on entire communities.<\/em>
\nIn July, Carol was invited to address a community group at the Woods Hole (Mass.) Library’s annual meeting. The following is her talk, very lightly edited for length and to omit some specifically local content.<\/em>
\nI was a bookseller in Falmouth through some challenging years. The reason Falmouth still has a bookstore, unlike many other towns, is because of loyal customers. There were six bookstores in town when Eight Cousins opened in 1986. The reason Eight Cousins is now the only one left is Amazon. Ursula K. LeGuin and others have spoken eloquently about the censorship issues <\/a>connected with concentration in the publishing industry. Today I\u2019d like to talk a bit about the impact of Amazon not on bookstores, but on communities.
\n
\nYour presence here indicates that you like being part of this community: you enjoy good schools, a relatively well-run town, active civic associations, fire protection, world-renowned scientific institutions, a state government no more or less corrupt than most, and a library that connects to a vital, up-to-date regional network. You like a good parade, a community theater, a handy post office. You know the secret places to park! Chances are you support organizations like the radio station, this library, the scouts, etc. with your taxes, your donations, and your participation. When things don\u2019t go the way you think they should, you like having some say in fixing the problems.
\nAccording to the Institute for Local Self Reliance, \u201ccase studies have found that about $45 of every $100 you spend at locally owned stores stays in your community\u2026\u201d The best figures I can find about what stays in the community when you spend $100 at Amazon ranges from \u201cpennies\u201d to \u201calmost zero\u201d. Let\u2019s take a look at how that $45 difference affects five parts of this community: jobs, rents, taxes, shopping experience, and donations to community organizations.
\nJOBS<\/strong><\/span>
\nFirst of all, jobs. The buzz about \u201cjob creation\u201d goes on endlessly. Who among us doesn\u2019t know someone who\u2019s looking and hoping? The need never ends. Consequently, Amazon touts each warehouse opening as \u201ccreating jobs.\u201d There\u2019s an office in Cambridge. A warehouse opened in Stoughton in 2014. Another one is about to break ground in Fall River. Good news, right? But according to ILSR, for every $10,000,000 spent at independent businesses, 47 jobs are generated. That compares to 14 for the same amount spent at Amazon. 47 to 14: what\u2019s wrong with that picture? Ask your friend or relative who\u2019s praying for an interview.
\nRENTS<\/strong><\/span>
\nAfter jobs come rents. Since a great deal of our community functions are paid for with property taxes, commercial rents are a huge part of the town\u2019s revenue base. Rent, that is to say income, from commercial property, depends upon the income that property can generate. When rents go up, valuation goes up, and tax revenues go up. When businesses fold, and storefronts and offices stand empty, of course the reverse is true. Real estate investors back off, property values slide, revenues drop, and the community has to choose between cutting services and increasing tax rates. The School Committee will be happy to discuss the details with you.
\nTAXES<\/strong><\/span>
\nJobs and rent lead directly to the third point, Amazon\u2019s impact on taxes overall. I\u2019m guessing that most people here are in the 25% income tax category. The latest information I could find is that Amazon.com pays 3.5% to 6% in federal taxes, and presumably about the same for the state, so you\u2019re paying a chunk of Amazon\u2019s instead. Since 2012, Amazon has had to collect sales tax here [in Massachusetts]. However, there are still 22 states where it doesn\u2019t, states that are cutting services left and right even as Amazon fights tooth and nail to keep it that way.
\nIn Stoughton, a Boston suburb, the promise of 125 new Amazon jobs was enough to attract a 10-year, $2.9 million personal property tax exemption.\u00a0Amazon leans hard on states and localities for tax breaks, and it would just as soon you look the other way.\u00a0Selectman Bob O\u2019Reagan announced it, saying, \u201cIt\u2019s been in negotiations for many months,\u201d but also explained that the project had been under a non-disclosure agreement until the day before the selectmen voted to approve it.\u00a0\u00a0The state Dept. of Economic Development also approved $600,000 in tax credits.\u00a0\u00a0For an equal volume of sales, local businesses would have generated almost 300 jobs at no cost in tax credits or state agency salaries.
\nAs for Fall River, the Providence Journal reported this past March: Amazon on Tuesday won $3.25 million in tax breaks in Massachusetts from the state’s Economic Assistance Coordinating Council. [\u2026] In return, Amazon agreed to create 500 permanent jobs at an average wage of $35,000 and keep them for at least five years. […] The $3.25 million in state tax breaks includes a $1-million job creation credit, which the company is allowed to sell for cash
\nUsing the same formula on job creation, local Fall River businesses would generate over 1100 more\u00a0<\/span>jobs than Amazon on the same anticipated sales volume.
\nSHOPPING EXPERIENCE<\/strong><\/span>
\nBut as the courteous civil servant at the Assessor\u2019s Office said the other day when I was asking about mechanics of local property taxes, \u201cOh, I use Amazon Prime all the time. It\u2019s so easy, and I don\u2019t have to pay shipping costs.\u201d Well, she\u2019s only paying what, — $99 per year? — shipping costs. Whereas shopping online or in person on Main Street and picking things up locally, customer shipping cost is $0. She went on to touch on other aspects of the shopping experience: convenience, price, selection, and personal interactions.
\nConvenience<\/strong><\/span>
\nThe convenience of 24\/7 shopping is a big attraction. That\u2019s why about 80% of our town\u2019s Main Street retailers have websites where you can shop online. I won\u2019t even ask for a show of hands for how many people here have ever ordered online from one of them. Again and again and again I have mentioned to local customers that they could place their orders with Eight Cousins at eightcousins.com, only to meet an astonished look and a blurted admission, \u201cOh! You have a website?\u201d
\nPrices<\/strong><\/span>
\nAs for prices, I did some spot checking between Amazon and local retailers.\u00a0It was a wash.<\/strong><\/span> Yes, Amazon offers whopping discounts (extracted from their suppliers) on certain high profile items. For the rest, prices are generally equal or higher. [Elizabeth adds, Yes, this is so true! Often, we will comparison-shop items for sale in our store and discover that Amazon charges more. But the erroneous perception–fueled by marketing and early discounting that was weaned away once market share was won\u2014is that Amazon is always less expensive.]<\/em>\u00a0Amazon will blackball any business that doesn\u2019t meet its discounting demands. Furthermore, any Amazon affiliate such as a used book dealer or small appliance manufacturer will find itself liable to \u201cinvestigation\u201d and blackout right about the time it begins to compete, especially around the holiday season.
\nAnd do you know what \u201cshowrooming\u201d is? It\u2019s the practice, actually encouraged by Amazon, of a customer looking over the merchandise in a real store, checking its price, and then ordering online. Not only is Amazon paying no rent on that display space, it\u2019s actually exploiting it. That, my friends, is viewed among retailers as theft of service<\/strong><\/span>.
\nSelection<\/strong><\/span>
\nWhile it\u2019s true there are more different products offered on websites than in stores, those are all virtual<\/em> products. The real ones all come from the same manufacturers and warehouses as the ones you find in stores. So Ace Hardware can order that fancy weed whacker just as easily as website X. Of course there are always unusual items that have unusual supply chains, and therefore are more difficult for local shops to order. Fine, go to the wider pool of the web. That\u2019s its area of excellence. On the other hand, do you really want to spend the time to sort through six hundred different refrigerator models? Or will you simply let a digital algorithm (weighted by promotional money) decide for you?
\nPersonal interaction<\/strong><\/span>
\nOne of the pleasures of small town living is the casual encounters with a friends. At a time when digital devices push solitude on toward isolation, shopping experiences are mingling experiences. Some people go to bars and cocktail parties for that. In this community, it\u2019s easier<\/strong><\/span>. Just go shopping.
\nDONATIONS AND COMMUNITY SUPPORT<\/strong><\/span>
\nLocal businesses respond more or less weekly to charitable requests, and for the most part they donate those gift cards and merchandise willingly within their means. They lend their payroll hours to help out with parades, displays, programs and projects. They watch over the child waiting anxiously for a ride, and they offer an antsy little kid the succor of a restroom or a tissue. They put out bowls of water for dogs, tidy up their flower beds, and volunteer for town committees. They do so much that even Amazon has noticed.
\nAmazon\u2019s response has been utterly cynical<\/strong><\/span>:<\/strong>\u00a0they have set up a program called \u201cAmazon Smile,\u201d which offers to donate a portion of your purchase price to the charity of your choice when you click on Amazon Smile before placing your order. Evidently they downloaded from each state\u2019s website the name and contact information of every registered non-profit and made this offer to each of them. Many took them up on it, and promote the program in glowing terms. But read the fine print: it applies only to \u201celigible\u201d purchases. Guess who defines eligibility. And the donation is one half of one percent. To donate $100.00, you would need to spend $20,000 on \u201celigible\u201d purchases.<\/strong> If you spend $20,000 locally, not only does it generate money and participation toward worthwhile organizations, it also adds at least $9,000 to the local economy in wages, rents, and taxes.
\nINTEGRITY<\/strong><\/span>
\nWe all know that some business somewhere in this town is cutting some corners somewhere. But on the whole, a local business can\u2019t get away with much, because there are too many eyes on the operation: staff, customers, accountants, bankers, newspapers, and Town Hall.
\nAmazon is notoriously opaque, but if you skim through The Everything Book: Jeff Bezos and the Age of Amazon<\/em>\u00a0by Brad Stone (2013), you will soon see Bezos\u2019 pattern of pressing absolutely every angle \u2013 legal interpretation and lawsuits, labor regulations, taxation, leaning on politicians, misleading language, gathering intelligence about competitors, stock market regulations, pressuring competitors, shipping contracts, abrogating pricing agreements with suppliers, leveraging capital, harvesting and selling marketing data, and more — to its absolute limit in the name of his \u201cGet Big Fast\u201d strategy, with the goal of dominating world retailing. Secrecy is the angle that protects all the rest<\/strong><\/span>.
\nBOOKSTORE HISTORY<\/strong><\/span>
\n\u201cGet Big Fast\u201d meant grabbing market share by hook or by crook. As a customer, Amazon became powerful bait first of all to the publishing industry, because Bezos felt books had the advantage of being easy to ship, the same item wherever they are sold, generally seen as having positive value, and relatively cheap to start with as a trial balloon. Prices were printed right on the product, and thanks to encouragement from Barnes & Noble in the early 90\u2019s, prices had been inflated to allow for so-called discounting. The publishing industry, ever strapped for cash, was thrilled at first at Amazon\u2019s rapid growth. Soon Amazon was selling 20, then 30, and now over 40% of the new books in the US annually. But one big customer is not a good thing for any business: it allows that customer to demand concessions: prices, payment terms, and in the case of publishing, advertising subsidies. Laws require publishers to sell to all customers at the same prices, but Amazon, building on the practices of Barnes & Noble, quickly learned to exploit the more permeable areas of promotional support. Within about five years the publishers found themselves facing some very unpleasant new realities. One after another they learned a bitter truth: you don\u2019t work with<\/span> Amazon, you work for<\/span> Amazon. But by then the quicksand was shoulder deep.
\nThose five years were long enough for Amazon to gain a huge head start. Public infatuation with the technology of online ordering and digital reading created a tsunami that drowned many, many small bookstores. Some of them were so inefficient, with their undisciplined business practices, romantic notions of sitting and reading all day, manual card files, and dusty corners, that they deserved to go under. Others, including Eight Cousins, were forced almost to the wall. Upgrading computers and software every couple of years, creating a functioning website and e-newsletters, rising rents, dealing in a product whose price is printed right on the package, and competing with deep discounting \u2013 it seemed like there was a new hurdle every six months.
\nAny retailer has four areas of cost: occupancy, inventory, operations, and payroll. Rent can be negotiated within narrow limits. The cost of inventory is highly regulated, but the selling price to the customer is adjustable in most cases. When the price is printed on the product, though, adding a nickel here and a dollar there as a clothing or craft store can do, is not an option. Paring down electric bills, insurance, and printer paper use yields a tiny benefit for a huge effort.
\nThe one area that can really be controlled, especially in a bookstore, is payroll. And so retail payrolls are dismal, always under pressure. During its first eleven years my parents, Betty and Al Borg, took no wages at all, which kept payroll under control. But when they left, in early 1998, I was filled with doubt about being able to pay for what they had freely given. Could we reduce store hours? Institute more self-service? Automate more of our operations? Was it worth the staff time to claim more promotional subsidies? Could the owner work eight days a week instead of seven? Keep people minimally scheduled so we don\u2019t have to give them any vacation or sick leave? Health insurance? Out of the question. Forget raises! If it\u2019s a good season we\u2019ll give a bonus!
\nThanks to extremely dedicated staff and a strong trade association, Eight Cousins held its own, has a decent website, offers e-readers and e-books, and an up-to-date digital inventory system. And thanks to customers like you riding to the rescue, twice a year I was able to give modest bonuses. Not that they amounted to enough to keep some of our staff off food stamps and Mass Health. Amazon took that money, and those funds will never touch Falmouth again.
\nWhich brings us back to our starting point: the impact of Amazon on communities. Here\u2019s what happened when I tried to shop online locally and at Amazon. I picked random items: a garden hose, a dog collar, a pound of fudge, a t-shirt with an anchor motif, a paperback book, a pound of Zamorano cheese, and a pair of garnet earrings. These came to $170, give or take a bit. The items purchased locally were 74 cents less than those shown on Amazon<\/strong><\/span>.
\nI was shocked, so I tried again, narrowing it down to books and hardware, where products are more uniform.
\nThree items from Ace Hardware \u2013 a picnic tent, a dozen jelly jars and an electric ice cream freezer \u2013 come to $41 more at Amazon. Six books at Eight Cousins come to $63.49 less on Amazon. So I \u201csave\u201d $22.49 out of pocket by shopping on Amazon \u2013 BUT, and here\u2019s the big one \u2013 that little spree sucks almost $420 out<\/span> of our town, less whatever the UPS and FedEx guys spend on coffee. But no arts grants. No extra library hours. No addiction rehab programs. The slightly higher $440 spent locally leaves about $200 in this community toward the things that benefit us all. The money spent on Amazon? Pennies at the most.<\/span>
\nSo to help you return to ground zero here, allow me to hand out hundred dollar bills, one per listener, please. Sooner or later, these hundreds will be spent, even if it\u2019s by your heirs. The money will be spent. The choices are yours.
\n[The bills below are ‘spend locally’ reminders that Carol handed out to her audience members after the talk. Front and back sides:]
\n\"one<\/a>
\n\u00a0<\/a>
\n 
\n\"one<\/a>
\n 
\n 
\n 
\n 
\n 
\n 
\n 
\nThank you.
\n***
\nHere are the details of the online selections made for comparison purposes:
\nGarden hose at Eastmans, can be ordered online Ace\u00ae Flexogen\u00ae 5\/8in X 50ft Garden Hose (1058050A) Item no: 71928 | 034411112038 $23.99
\nComp on Amazon.: Legacy HFZG550YW Flexzilla 5\/8 X 50 Zilla Green Garden Hose with 3\/4 GHT Ends by Legacy $50.35\/$53.99 Free shipping, Get it by Tuesday, Jun 16
\nBlack Dog: Boston Sneaker dog collar, $26.00,
\nComp on Amazon: Hunter MFG Boston Red Sox Dog Collar, Small, by MLB, $14.95
\nGhelfi\u2019s Chocolate Fudge, $12.99\/lb
\nComp on Amazon: $11.25 – $15.00
\nPuritan, CLASSIC ANCHOR T-SHIRT, $30.00
\nComp at Amazon: Makaya Men’s Anchor T-Shirt by MAKAYA $18.95
\nEight Cousins book, Euphoria, $14.95
\nComp at Amazon: $11.17
\nFalmouth Wine & Spirits, Zamorano cheese, $11.99\/lb.
\nComp at Amazon: $13.99 – $22.99\/lb.
\nHannoush Jewelers, PANDORA Birthday Bloom Garnet Earrings, $50.00
\nComp at Amazon: $50.00
\n[second set of selections]
\nHardware at Ace comes to $248.97. The same choices at Amazon are $289.97, or $41.00 more at Amazon.
\nShade Tech 10ft x 10ft Instant Canopy (157514), $59.99
\nComp at Amazon: $89.99
\nBall\u00ae 12oz Regular Mouth Quilted Crystal Jelly Jars 12\/pk, $8.99
\nComp at Amazon, $19.99
\nWhite Mountain 4 Qt Ice Cream Freezer (PBWMIMH412), $179.99
\nComp at Amazon, same price
\nSix books at Eight Cousins come to $190.75, including current Bestseller discounts. The same books at Amazon are $127.26:
\nGo Set a Watchman, $27.99 (bestseller discount would bring it down to $22.39) Comp at Amazon: $16.07
\nContemporary Cape Cod Artists: On Abstraction, $59.99 Comp at Amazon: $41.11
\nCapital in the Twenty-First Century, $39.99
\nComp at Amazon: $26.22
\nFlora and Ulysses, paperback $8.99, hardcover $17.99
\nComp at Amazon: $7.64, $11.08
\nAll the Light We Cannot See, $27.99, less 20% as bestseller = $22.39.
\nComp at Amazon: $15.88 (44% discount)
\nThe Oregon Trail, $28.00, less 20% as bestseller = $22.40
\nComp at Amazon: $16.90
\n <\/p>\n","protected":false},"excerpt":{"rendered":"

Longtime bookseller Carol Chittenden tells it all… about Amazon and communities.<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-16722","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=\/wp\/v2\/posts\/16722","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16722"}],"version-history":[{"count":0,"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=\/wp\/v2\/posts\/16722\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.publishersweekly.com\/blogs\/shelftalker\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}