Strange Brew

By G. David Doran

Starbucks, Barnes & Noble, Circuit City--they're not called category killers for nothing. So imagine bookstore entrepreneur A. David Schwartz's surprise upon learning that the big guys aren't always the bad guys.

When the president of Milwaukee-based Harry W. Schwartz BookShops learned late last year that his biggest supplier, Ingram Book Group, was being bought by his biggest competitor, Barnes & Noble, he was certain his days were numbered.

But nearly six months later, Schwartz's four-store chain is still going strong. That's due in part to a business deal with his former Goliath--as Schwartz now receives a credit toward service usage fees. Although he's grateful, Schwartz knows Ingram/Barnes & Noble isn't being friendly for the heck of it--Schwartz happens to be one of the distributor's better customers, and severing the relationship would probably harm the parent company's bottom line.

"It's a difficult emotional issue to have the success of your number-one distributor rely on the success of your number-one competitor," says Schwartz. "But this is capitalism, and there's no room for emotions."

Contact Source

Harry W. Schwartz BookShops, (414) 270-3434, http://www.schwartzbooks.com

This article was originally published in the June 1999 print edition of Entrepreneur with the headline: Strange Brew.