HERI Committee Report
If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.
APPENDIX J
THE IMMEDIATE
CONSEQUENCES OF
ELECTRONIC COMMERCE
There is little up to date information about the sale of books over the Internet in Canada. From the information that is available it is possible to prepare a rough estimate of Internet sales in Canada over the past year. A reasonable estimate would be as follows:
While this figure is clearly an estimate it seems reasonable to assume that Internet sales of books in Canada were at least $70M during the past year. They could be considerably higher but they are certainly not less than $40M.
If the average independent bookstore has sales of approximately $700,000 then the estimate of $70M in Internet sales represents (on average) the total sales of approximately 100 independent book stores.
If the net profit of an independent bookstore is approximately 2% of sales (e.g., $14,000 on sales of $700,000), it is possible to quantify the modest level of change represented by changes in technology (e.g., Internet sales or POD) to see how quickly the 2% profit margin will evaporate. For example, the store only has to lose about five sales a day ($10 per sale is $50 per day; for 300 days is $15,000) for a year to move from being profitable to losing money.
1 Publicly available figures for sales for period ending April 2000.
2 Conversation with Larry Stevenson February 2000
3 Estimate
4 This is a cautious estimate. The Web sites at Barnes & Noble and Borders are visited by a large number of Canadians so it would be unreasonable to imagine that sales of all other Web sites (e.g., Renaud-Bray, Borders, and Barnes & Noble and so on) would be less than $7M.