The rise of Barnes & Noble.

On Taming Dinosaurs
By Robert Ringer

Once upon a time, there was a ferocious dinosaur known as Publishsaurus rex who roamed the Earth, devouring everything in its path. Bookstores and authors were especially attractive prey for this carnivorous monster.

While scientists believe that most dinosaurs disappeared as a result of some catastrophic natural disaster about 250 million years ago, the Publishsaurus rex not only managed to survive, but prosper. In fact, it’s still around today, though it has been tamed.

It took the cleverness of an entrepreneur by the name of Leonard Riggio to accomplish such a feat. The story of how Riggio brought the book-publishing industry to its collective knees would rival Jurassic Park on the big screen. And you can learn how to position your own business in a bigger industry just by watching what Riggio did.

I don’t know how book publishers ever got themselves trapped into such a bad deal, but since the beginning of time, most books have been “sold” to bookstores on a consignment basis. From a business standpoint, this arrangement is so absurd that whenever people who aren’t familiar with the book-publishing industry hear about it for the first time, they’re amazed. Nevertheless, publishers were always able to live with the obscene consignment arrangement, because they were so powerful they could keep bookstores in line.

In earlier days, when large bookstores chains hadn’t yet been invented, many bookstores were fearful of returning too many books to a powerhouse publisher for fear of being cut off from future shipments. But, as Waldenbooks and B. Dalton developed into large chains in the seventies, the bookworm slowly began to turn. Even so, the publishing dinosaur was so busy with other more important matters that it didn’t even notice what was happening to its own business.

By “important matters,” I’m referring to publishing executives attending sales conferences four times a year in such fun-and-sun locations as Puerto Rico, Miami, Los Angeles, and Las Vegas… the Frankfurt Book Fair once a year in Germany… the annual London Book Fair in the U.K… and having lunch and dinner with literary agents at New York’s finest gourmet restaurants.

Then, one day, a funny thing happened to publishing executives on the way to lunch at 21 Club in Manhattan. Leonard Riggio bought a little bookstore company called Barnes & Noble. He moved stealthily until, little by little, Barnes & Noble maneuvered itself into a position where it was able to tighten its control over the gates that stand between book publishers and retail customers.

Riggio’s next major move was to begin building superstores. And, as of October 2006, Barnes & Noble has 801 of these monster retail outlets spread through every major metropolitan area in the U.S.

As part of his master plan to become the industry’s gatekeeper, Riggio also added two new twists. First, he put small cafes in his retail behemoths so customers could have a croissant and cup of coffee without ever having to leave Barnes & Noble. Second, he had overstuffed lounge chairs strategically placed throughout each store so customers could relax and read to their heart’s content.

By the time well-fed, lethargic publishing executives woke up to what was going on, it was too late. They already had a huge Barnes & Noble chain around their collective necks, and Riggio was giving them harsh commands to heel and toe.

As a result, if a publisher wants to assure that its books will be given reasonable nationwide distribution nowadays, it had better be prepared to pay homage to Barnes & Noble. And if it desires decent placement for a particular book in Barnes & Noble’s superstores, that homage must come in the form of hard cash.

For example, if a publisher wants a book to appear on the third table from the front of the store, it has to pay extra for that privilege. If it wants the book to appear on the front table, that’s even more expensive. And, finally, a publisher can purchase a rack at the very front entrance of B&N superstores for about what it would cost a family of five to tour the world for a month.

Basically, all Riggio did was copy the legal bribery system that has been used by supermarkets for decades. When you go to a supermarket, wherever you see a prominent display of, say, Pepsi or Coke, be assured that those companies paid serious money for that placement in that particular store.

So, is Riggio an earthly version of Lucifer for ruining the cushy lives to which publishing executives had become accustomed? I think not. After all, for centuries publishers have played the role of gatekeeper vis-a-vis aspiring authors, with a ruthlessness that makes Riggio look like a Boy Scout.

The arrogance of major publishers is legendary. But now it’s the longtime bullies of the publishing industry who are getting bruised and battered and drowned by returned books coming from every direction. They haven’t even come close to figuring out a way to deal with Mr. Riggio’s way of doing business.

And, to make matters worse, Borders and Books-A-Million are doing their best to imitate Barnes & Noble. If this were a prizefight, the referee would have called it a technical knockout by now.

The lesson the little guys on the sidelines can learn from Leonard Riggio is that no one has such a stranglehold on any industry that it is invulnerable. If your plan is clever enough, and you’re prepared to do whatever it takes to execute it, anything is possible.

The secret is to keep a low profile and move quietly – but keep moving forward. And if the companies currently ruling the roost are arrogant – which is almost always the case – it gives you a huge advantage to move stealthily into position to upstage them. Even a college dropout by the name of Gates (as in gatekeeper) proved it could be done.

[Ed. Note: Take a gigantic step toward achieving all your personal and professional goals – faster than you ever imagined – with Robert Ringer’s best-selling personal-development program. And sign up for his Voice of Sanity e-letter here.]

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