Powell’s says it won’t sell books on Amazon anymore: ‘We must take a stand’

Powell’s Books says it won’t sell on Amazon anymore, declaring that the online retail giant undermines communities by siphoning business from the real world and replacing it with internet commerce.

“For too long, we have watched the detrimental impact of Amazon’s business on our communities and the independent bookselling world,” CEO Emily Powell wrote in a note to customers Wednesday.

“The vitality of our neighbors and neighborhoods depends on the ability of local businesses to thrive,” Powell wrote. “We will not participate in undermining that vitality.”

Portland-based Powell’s is among the world’s largest bookstores and is the city’s signature retailer. But it’s dwarfed by the inventory available through Amazon’s website.

So Powell’s, like many other retailers, supplements its business by listing its products on Amazon’s own site – and giving Amazon a share of each sale.

That puts smaller retailers at an obvious disadvantage, given that they’re depending on a much larger competitor for an important share of their sales. But many feel they have no choice but to list on Amazon given that company’s dominant market position online.

Seattle-based Amazon did not respond to a request for comment and Powell’s declined to elaborate on Wednesday’s statement. However, Emily Powell told CNBC that Amazon had been a “big sales generator” for the Portland bookstore.

“It was hard to give up, sort of like smoking,” she said. “We knew we shouldn’t be doing it, but, you know, we sort of needed it from a sales perspective to keep going. We couldn’t face the possibility of not having that sales channel.”

The pandemic changed the landscape, Powell said, with Amazon prioritizing cleaning supplies and other essential goods -- slowing the shipment of books. Powell said its Amazon sales slowed so she decided to focus on the bookstore’s own website.

“We just decided to make that a permanent business choice,” Powell said.

Powell’s closed all its stores in March, when the pandemic hit Oregon. It has been reopening slowly, first allowing in-person pickup of books ordered online. This month it reopened its Cedar Hills Crossing store and part of its flagship store downtown.

Powell’s sells books through its own website, too, and enjoyed a surge of business online last spring as customers all over the country raced to show support for the business, so much so that Powell’s took many weeks to ship the backlog of orders amid new coronavirus safety precautions. Emily Powell said in May that online orders fell off considerably in subsequent weeks.

That illustrates the predicament Powell’s and other businesses find themselves in, especially during the pandemic, as online commerce steals sales from their physical business. While Powell’s stores remain largely shuttered, Amazon reported $50 billion in retail sales last quarter – up nearly 40% from a year earlier.

In hearings last month, Congress examined the sales and marketing practices of big tech companies including Amazon, Apple, Facebook and Google. No additional legislation appears imminent, though, and Powell told CNBC she isn’t waiting for federal action.

“I’m going to do my best to find a way to compete and hope that at the end of the day the value to our community is enough to keep us going,” she told CNBC. “If in the meantime our political systems realize that this business is having a detrimental impact on our economy, even though it looks the opposite, i’ll be pleasantly surprised.”

Online commerce has added pressure on all manner of retailers, from big department stores and suburban shopping malls to small-town retailers.

“We understand that in many communities, Amazon — and big box retail chains — have become the only option,” Emily Powell wrote. “And yet when it comes to our local community and the community of independent bookstores around the U.S., we must take a stand.”

This article has been updated with Emily Powell’s comments to CNBC.

-- Mike Rogoway | [email protected] | twitter: @rogoway | 503-294-7699

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