# B&N Expects Nook Business to Lose More Money This Year



## Steerpike (Feb 14, 2013)

See story, here:  http://mashable.com/2013/02/14/barnes-and-noble-nook-sales/

For those of you self-publishing, does something like this make you more likely to try Amazon's Kindle Select program? Do you think story sales via B&N, Kobo, and others will put a dent in the sales you get through Amazon?


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## Devor (Feb 14, 2013)

Amazon is all-in with its dedication to the Kindle while still maintaining strong alternative revenue streams.  Looking at Barnes & Noble, the same just doesn't seem to be true.  I don't know if the Nook is a stronger product or not.  I do know that B&N doesn't have the same grasp of the ebook market while it's struggling with failed stores and a web presence that just isn't as competitive.

If the Nook continues to falter long enough, B&N will go under.  That's not a chance I want to rely on, either as a book-buyer deciding on a product marketplace or as a potential publisher considering the best options to promote a work.


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## Mindfire (Feb 14, 2013)

B&N needs to swallow their pride and play it smart by trying to partner with Amazon rather than compete with it I think. Amazon + B&N would be a cool combo. But it'll never happen because then they'd lose cool points with big publishing.


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## Devor (Feb 14, 2013)

Mindfire said:


> B&N needs to swallow their pride and play it smart by trying to partner with Amazon rather than compete with it I think.



Did you have something specific in mind?


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## Steerpike (Feb 14, 2013)

Mindfire said:


> B&N needs to swallow their pride and play it smart by trying to partner with Amazon rather than compete with it I think.



I don't see that happening. B&N was looking into partnering with Microsoft at one point, I thought. A partnership of some sort may certainly be in order, but I can't see it being with Amazon. You never know, though, I suppose.


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## Mindfire (Feb 14, 2013)

It's quite simple. B&N stops their failed Nook project and sells Kindles instead. Work with Amazon so that any innovative or convenient Nook features are included in the next Kindle model. Patch compatibility between the two devices so that people who already own Nooks can move their books to Kindle or buy new books from the Kindle store while granting Kindle users the ability to buy previously Nook exclusive books. Amazon and B&N combine their inventory so if you want a book B&N doesn't have, they can get it for you via Amazon. If you want a book from Amazon but don't want the shipping cost/wait, they can recommend a nearby B&N. B&N can hold events for Amazon authors,  attracting potential customers in the process. 

Amazon gains new assets,  B&N doesn't go bankrupt. Everybody wins.


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## Steerpike (Feb 14, 2013)

They're already entering into a venture with Microsoft apparently. I just looked it up. No word on the nature of the partnership, from what I saw. 

Still don't see B&N and Amazon partnering.


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## Ankari (Feb 14, 2013)

I read an article discussing how the Amazon shareholders were growing restless with the lack of profits from Kindle.  The CEO, by sheer will, is keeping the Kindle going at the current price point and author disbursements.  The B&N Nook will not go anywhere.  If anything, B&N will go under but the Nook will still be around.  Microsoft has already invested into the Nook and will, as a last resort, buy the entire division and spin it off as part of the Microsoft store for Windows 8.

Everyone is talking about the failure of the Nook.  What about the Kindle?


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## Steerpike (Feb 14, 2013)

I think B&N already announced it was spinning off the Nook business, right?

Amazon has the finances to keep doing this for some time; I'm not sure B&N has that same ability right now.


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## Mindfire (Feb 14, 2013)

I realize a BN Amazon partnership is unlikely in the extreme, but if a Christmas miracle occurred and it happened, it would be the awesomest thing in publishing since the printing press.


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## Xaysai (Feb 14, 2013)

BN will eventually be spinning Nook off because they don't want the Brick and Mortar business weighing it down. Microsoft recently invested $300M into the Nook.

The problem that BN has is that it's relying on Nook sales to keep the company afloat while Amazon has a profitable business keeping the Kindle alive.

BN CEO recently said that BN will be closing ~33% of its stores within the next 10 years. The company is run poorly.

Amazon would be foolish to enter any type of partnership with the sinking ship which is BN.


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## Mindfire (Feb 14, 2013)

The question is, why is BN doing so badly?


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## Steerpike (Feb 14, 2013)

Mindfire said:


> The question is, why is BN doing so badly?



Brick and Mortar stores generally are doing badly. I don't know how well their online book business does, but it seems like their brick and mortar business is a drain on the entire company at this point.


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## Xaysai (Feb 14, 2013)

Mindfire said:


> The question is, why is BN doing so badly?



Ohhhhhhhh, don't get me started.


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## Ankari (Feb 14, 2013)

B&N is the only store I've seen that allows anyone to walk in, take a product off its shelf, and consume it without paying a dime.  I love B&N, but I can't stand navigating through the maze of human bodies laying on the ground as if it's their bedroom.


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## Mindfire (Feb 14, 2013)

Xaysai said:


> Ohhhhhhhh, don't get me started.



No, please. Elaborate.



Ankari said:


> B&N is the only store I've seen that allows anyone to walk in, take a product off its shelf, and consume it without paying a dime.  I love B&N, but I can't stand navigating through the maze of human bodies laying on the ground as if it's their bedroom.



Hey! I've been one of those human bodies! It's fun. You should try it. Though generally I do it at Books-A-Million, since they're closer to my house.


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## Xaysai (Feb 14, 2013)

d





Mindfire said:


> No, please. Elaborate.



Let me preface by saying that until 6 months ago, I managed a BN for 5 years, and it was infuriating.

In a nutshell, BN doesn't want to run a profitable company, they want to run an inexpensive one. Now don't get me wrong, I understand the need to run a lean business, especially in this economy, but their heavily operationally biased philosophy was ingrained in their business long before the economy tanked (and they've failed to adapt).

Examples of where they go wrong:

1) ~85% of my review was based on operational criteria: payroll, boxes received per hour, shelves of books shelved per hour, task completion (tracked through an online action planner), management of daily staffing assignments, etc.

The other 15% is sales. Two of the main reasons they scaled back the sales weight in the review process were a) they often times couldn't get us our sales budgets until *nearly 2 months* into the fiscal year (so it's hard to hold us accountable for hitting goals when you don't have them for 1/6th of the year) and b) their budget setting was so flawed that horribly run stores were getting amazing year end reviews because their plan was set absurdly low and well run stores were getting horrible reviews because their sales budgets were set absurdly high.

So what do managers do? They game the system so they don't sabotage their review by focusing on less desirable statistics...like sales...

2) Shipping. Walk into BN and try to get an out of stock book shipped to you in less than 5-7 business days and see how it works out for you. Amazon can get you books absurdly fast. So am I going to pay more for a book that's going to take almost 2 weeks to get to me, or less for a book I can get in 2-3 days?

At a time when BN should have stepped up their shipping to compete with Amazon, they actually slowed it down. When I first started with BN, shipping time quotes were 2-3 business days. They got a cheaper shipping deal by sending their items through the USPS and a third party shipper, which caused an extra 3-5 business day delay and they took it.

3) Unethical Practices. 

Example a) 6 months into the year you are busting your butt and BARELY scraping by sales and payroll and they say "oh, by the way, we're increasing your sales budget (which your payroll is tied to) and retroacting it to the beginning of the year." So now the +2% to sales budget and the +200 payroll hours you had banked is now -7% to budget and -600 hours for the year. Oh, and did I mention that if you don't come within 1% of your payroll budget, no matter how strong all of your other numbers are you get a "Needs Improvement" review and NO RAISE. Oh, and did I also mention that 2 consecutive "Needs Improvement" reviews is pretty much a termination? And it gets better on the payroll front...

Example b) We performed 2 store reflows (moving all the sections around, usually involved taking down and setting up bookcases). One year it was a 500 payroll reflow, the next year it was a 600 hour reflow. Neither were funded by the company, meaning I needed to take it out of my store budget for the year. 

4) Lack of leadership training. There is no management or leadership training whatsoever. Too many of their managers are bean counting morons with the people skills of a rock. I mean it in the most sincere way possible, but I believe very strongly in the value of high morale, engaged associates and leaders who take a genuine personal interest in the growth of those they lead, and at BN there is none of this.

5) Lack of reporting data. Almost any other retail company you work for will have sales reporting data, but at BN you needed to track almost everything manually. For instance, the company places little value in selling attachments with the Nook (you know, all the accessories - the items which actually have a decent profit margin?), so I had to make up tracking sheets and have my Nook people track it manually so I could followup on our sales culture.

The bottom line: the number of times my district manager came into my store to meet with me and discuss sales = 0. The number of times I had to listen to her crap on about useless operational garbage = uncountable.

I'm sure there is more, but I doubt anyone is going to even make it this far, lol...


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## Mindfire (Feb 14, 2013)

Wow. Just wow. I almost _want_ them to tank now.


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## ALB2012 (Feb 16, 2013)

Interesting. I hadn't heard any of this but then again being in the UK we have only just got nook here as it is. 
I buy virtually all my books from Amazon now, I have a kindle so all my e-book come from Amazon, unless they can be converted and most of my paperbacks come from Amazon. Sadly the only time I go into a "real" book shop is if someone gets me gift vouchers or it is a second hand shop.

I used to work in a book shop, which is where most of the books I own came from but it closed, as have many in the town I live in. (Although it was some time ago and the company was in trouble anyway, bought by another and the extra shop closed). Waterstones is usually where I go but they are quite expensive and as I don't drive it is a trip especially into town to go to the book store. Or I could just order from Amazon...

I currently have my novel on Kindle only but thinking of branching out via SW and I think they cover B and N. Interesting to know though


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## ALB2012 (Feb 16, 2013)

Barnes & Noble hit by Nook&rsquo;s tale of woe - FT.com
Barnes & Noble Nook Business Is Suffering


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## Devor (Feb 16, 2013)

Mindfire said:


> It's quite simple. B&N stops their failed Nook project and sells Kindles instead.



Selling Kindles wouldn't save B&N's brick and mortor business.  With the industry changes currently underway, what's likely going to happen is a "next wave" of book stores and libraries which look nothing the current ones.  B&N stores are going to shrink for a while, and when the "next wave" emerges - whatever it looks like - the B&N brick and mortor business will go belly up.  




Xaysai said:


> The bottom line: the number of times my district manager came into my store to meet with me and discuss sales = 0. The number of times I had to listen to her crap on about useless operational garbage = uncountable.



I took one class on Operations and a couple where metrics was briefly a topic.  Point by point, they basically said not to do all that.  I feel for you because that's crap.


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## Kevin O. McLaughlin (Feb 21, 2013)

B&N has two really bad problems:

#1 - They remain primarily a brick and mortar business in an industry was has already moved mostly online, and is moving increasingly online each month. The little sop they fed the media about closing 33% of their stores in ten years? Guys, if there is even ONE B&N superstore left in five years, I'll be amazed. In five years, we'll still see some niche/small bookstores floating around, but the day of the big bookstore is over.

The reason is simple: People who shop big bookstores do so because it's how one gets the best selections and prices. Except, it's not how one gets the best selection and prices anymore. Niche stores may stick around longer because they'll be targeting people who couldn't care less about a big selection - they just want the next /Insert Hot Author Here/ book.

#2 B&N's online store sucks. It's hard to work that out any other way. If they want to compete with Kindle effectively, they need to have at least as good an online store as Amazon does. They don't. Their search is not as good. Their browsing is not as good. Their pages are less cluttered looking, but more difficult to navigate. Online book browsing is replacing in store book browsing. The ebook stores which best enable customers to browse will win. Right now Amazon has set the bar very high for that, and none of the other retailers are matching it yet.


BTW, about B&N and Amazon "cooperating"? B&N stopping the Nook and selling Kindles instead? That would *really* be the end of B&N. Their only long term hope is to upgrade their online store into a better product than Amazon's. The retail stores are toast; that's why they hived off the online stuff and the profitable college bookstores - those have the potential, at least, to make money in the long run when the rest of the company goes bankrupt.


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## Mindfire (Feb 21, 2013)

Kevin O. McLaughlin said:


> BTW, about B&N and Amazon "cooperating"? B&N stopping the Nook and selling Kindles instead? That would *really* be the end of B&N.



How would that be the end for them? They'd still exist after all, even if only as Amazon's sock puppet.


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## Zero Angel (Feb 22, 2013)

Steerpike said:


> See story, here:  http://mashable.com/2013/02/14/barnes-and-noble-nook-sales/
> 
> For those of you self-publishing, does something like this make you more likely to try Amazon's Kindle Select program? Do you think story sales via B&N, Kobo, and others will put a dent in the sales you get through Amazon?



(sorry to get back on the original post questions, but...) I think as indie authors, we can't afford to pass up a market that might help contribute buzz, goodwill, or even the occasional sale, while if we were successful, why would we want to limit ourselves to Kindle Select anyway? Five days of free promotions isn't THAT good, especially since they nerfed it. 

Still, you can always go the route of giving Amazon exclusivity for 90 days and then extend the release to everywhere else. This has the nice advantage of getting two releases, but has the disadvantage of not having much goodwill for non-Kindle owners.


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## Kevin O. McLaughlin (Feb 22, 2013)

Right now, about 40% of the sales for my Starship series are coming from B&N, Zero Angel. I agree - I don't think discounting any retailer makes sense. Hard to tell where sales will be highest. I know some folks who see more sales on Apple than anywhere else, and they're a much smaller market than B&N.


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## Zero Angel (Feb 22, 2013)

Kevin O. McLaughlin said:


> Right now, about 40% of the sales for my Starship series are coming from B&N, Zero Angel. I agree - I don't think discounting any retailer makes sense. Hard to tell where sales will be highest. I know some folks who see more sales on Apple than anywhere else, and they're a much smaller market than B&N.



Wow! That's an incredible ratio! Is Amazon still higher? Every statistic I've ever heard is that Amazon is far and away the majority, with anywhere from 60% Amazon to 90% Amazon. I'm about 76% Amazon, 24% BN, and I haven't released to other markets yet. I mean, I plan on it, I'm just a bum I guess.


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