According to the Techleader blog on South Africa’s Mail and Guardian website, e-books are about to do to the publishing sector what iTunes did to the music industry. According to the blog post, e-book readers like Amazon’s Kindle is ‘single-handedly changing the way books are distributed, bought, sold and read’. What will this mean for publishers and book stores? From the publishers’ view, distribution costs almost disappear, as well as the prohibitive cost of physical storage and holding inventory.

From the bookstores’ point of view, retailers can both reduce physical inventory, but at the same time offer customers access to limitless list of titles without the need to hold them in inventory. The blog post further comments on how book retailers will need to re-access their business strategies, viewing themselves as content delivery services or pursue the licensing of an in-house e-reader device. For example, the largest US book retailer Barnes and Noble, reported that its Nook e-book reader has been the biggest selling item in company history. The Techleader blog comments too that e-book readers may provide a possible solution to poorer students in South Africa. A free e-reader and downloadable books may prove cheaper in the near future.

Questions 

1 Consider a book retailer typically held stocks for transaction and precautionary motives.How might the advent of the e-book reader affect its inventory holding in the future?

2 Does the e-book reader present any inventory problems itself?