Final chapter ... Amazon's takeover of The Book Depository could mean the end of free shipping.THE big two online booksellers, Amazon and Book Depository, are joining forces in a move likely to increase pressure on Australia's bricks-and-mortar bookshops.
Traditional bookshops have long bemoaned online retailers selling stock at large discounts and without having to charge GST. When REDgroup, owner of Borders and Angus & Robertson, went into administration in February, it partly blamed the drift to online shopping.
Reader's Feast in Swanston Street this week became the latest chapter in that collapse, lending weight to the prediction of federal Small Business Minister Nick Sherry that bookshops will be extinct within five years.
While Amazon may be the original internet behemoth, British upstart Book Depository has grabbed a large market share by offering free postage.
Industry sources estimate that Australians spend about $250 million a year on printed books from the two sites.
Amazon gave no details of the deal to buy Book Depository, which has customers in more than 100 countries and 6 million titles. British industry website theBookseller.com says Book Depository's sales rose by more than 70 per cent in the second half of last year. It is expected to double revenue for 2010 to £120 million ($A180 million).

But only about a third of that figure came from British sales. UK competition watchdog the Office of Fair Trading said it was too early to say whether it would investigate the proposed deal, but Book Depository's percentage of sales in its domestic market may work in its favour.
The company said it would operate independently of Amazon.

Australian Booksellers Association chief executive Joel Becker said the industry was apprehensive about the deal. ''They both make us nervous already, so collectively they make us more nervous.''
One industry source said free postage was crucial to Book Depository's success. Australia Post bears the cost of deliveries within Australia as part of international postal agreements (and Australian goods sent overseas receive similar treatment.) ''That's why Book Depository uses individual packages for books,'' he said.
He claimed this had contributed to Australia Post's decision to increase package rates in Australia. ''And that directly impacts on Australian booksellers who are trying to sell online.''
Mr Becker confirmed his association would write to the Australian Competition and Consumer Commission asking it to look at Pearson Australia's purchase of REDgroup Retail's online business, which includes the Borders and Angus & Robertson websites.

Read more: http://www.smh.com.au/entertainment/books/amazon-deal-makes-local-bookshops-more-nervous-20110705-1h0t4.html#ixzz1RLoIcfJ6