ALERT: Borders Will Announce Online Plans
I have been following the big boxes’ online overtures for some time now. As reported back in November, Borders is mapping out plans to end its Amazon partnership and sell on its own site. New readers to the blog and non-bookish types, may think they are reading an old post at this point — but this is correct — Borders is light years behind EVERYONE in this regard.
Shareholders, book lovers, online sellers alike should finally be prepared to hear what Borders intends to do. Either before or on their investor conference call on 22 March, you will see a major press release/announcement outlining their plans for an online site. I remain unsure of the exact details, but it will involve its own site at Borders.com. Investors should be relieved, if still disappointed, that this important change is coming. If Borders slices off even a small percentage of online book sales it will be significant for the stock.
Now, let’s help Borders take it to the next level- If they really want to see significant growth in this venture and bring some respite to its shareholders, then they should also have cogent plans to open a third party marketplace on its site. The marketplace should start with no sellers fees for 1 year and take 15-20% of all sales. This move alone would bring a flood of independent sellers to the site. What good is that? Well a thriving, highly competitive marketplace will allow Borders to offer used books at low prices and succeed in a manner similar to Amazon and Half. Obviously this will not cannibalize its own book sales online (none), but rather, foster an immense amount of traffic and buzz.
If Borders moves too slow on this, and the stock price falls below $20, you may see someone take this company private and swiftly move online. An efficient process could help increase the value of this company significantly.
