One problem independent bookstores have but which hasn’t been much discussed: consumers benefit enormously from online options. (Thanks to Marginal Revolution for the link.) The end of the abstract states:
Our analysis indicates that the increased product variety of online bookstores enhanced consumer welfare by $731 million to $1.03 billion in the year 2000, which is between seven to ten times as large as the consumer welfare gain from increased competition and lower prices in this market. There may also be large welfare gains in other SKU-intensive consumer goods such as music, movies, consumer electronics, and computer software and hardware.
For non-economists, that essentially means that you benefit from being able to find what you want and discover what you might want far more than you gain from having Amazon knock 10 – 40% off the cover price of a book. Learning this reminds me of a professor who marveled at how he had spent too many hours of his youth searching poorly organized used bookstores as he wrote his dissertation, while these days he can find virtually any book ever printed and buy it used, often for a few dollars. No wonder it’s hard for independents to survive based on having an eclectic selection of books these days: the Internet undercuts their prices and obviates some of the need for them.