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R.I.P. for a bookshop
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May 22, 2000: 3:15 p.m. ET
The 'new economy' forces an old-time bookseller to go out of business
By Staff Writer Allen Wastler
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BLOOMFIELD, N.J. (CNNfn) - For bookseller Dan Di Domenico it isn't a "new economy." It's no economy.
"I've been losing $1,000 a month for the last 10 months ... I've let my inventory run low to pay bills. You just can't go on that way, you know?" He plans to close his Bloomfield, N.J., bookshop, "Daniel's Den," next month, ending a 23-year run.
 It's not an unfamiliar situation for a small business. In 1998, the most recent year for available statistics, roughly 870,000 businesses ended operations, according to the Small Business Administration.
Domenico's case gives a real world example of how the "new economy" and its accompanying culture changes can adversely affect, even erase, a small business.
"There's this whole new psychology - a kind of mall psychology - going on," Domenico said, shuffling papers on the counter at his bookstore. From home to car to mall, people want to have a controlled, comfortable environment, he theorizes. "People are all too willing to shop outside the local community, to go to the highways. That's given rise to the superstores ... Barnes & Nobles, Borders, those guys with the lounges and cafes ... It's that comfort thing."
He motioned to the rear of his store, where he keeps children's and reference books shelved. "Some people suggested I put some tables back there," he chuckled. "I think that'd be a little much for me."
Beyond comfort, superstores have an additional competitive edge as well, he conceded. They can use their size to buy in volume and sell at a discount.
"The nature of publishing has changed. It's about marketing and mass media ... Publishers do big campaigns on certain books and create spikes in demand. The publishers make sure the big booksellers know about it and are ready for it with inventory ... But I don't have that pull or the resources."
 Add into the mix the Internet, and Domenico thinks his problems get worse.
"It's only a baby now and it's already taking a chunk out of my business ... I've lost some long-time customers. They just like the convenience of having stuff come to their house."
And, of course, it's cheaper. That is a sore point with Domenico. Not only can't he get the volume discounts big bookstores command, but he also believes publishers have followed a bad pricing model in general.
 "Many publishers are content to sell less books as long as prices are up high enough to keep making a profit. The problem is, they are shrinking their readership. The high prices discourage readers," Domenico said.
The Association of American Publishers, citing antitrust concerns, declined to comment on pricing issues.
"Small retail booksellers are having a tough time, no question," said Bruce Phillips, director of economic research at the Small Business Administration. "They've gotten hit by three waves: the malls, superstores, and the Internet. It's a tough, tough business."
According to a recent SBA-commissioned study, those small book businesses that survive do so by moving into niche markets -- like rare books or specialized publications.
 Specific book-industry issues aside, Domenico believes that a general cultural shift is making his business obsolete. Years ago he used to get traffic from kids and young adults interested in science fiction or romance novels. In the age of computer games and MTV, these customers have vanished. Despite his store's proximity to a small college, his customer base - what's left of it -- tends to be the older generation.
"All things change," Domenico sighed. "Maybe I'm hanging on to something that isn't there anymore." 
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