I was in Borders recently (which is not the surprising because I spend at least 10 hours or so a week in bookstores) enjoying a hot cup of coffee in the early morning (who am I kidding, it was already ten).

I walked into the bathroom and on my way saw a huge sign for the Borders Visa credit card you can sign up for. The way this probably works is Borders gets a commission fee from Visa for every card they sign up. There may also be some back-end profit sharing from each account they are responsible for–in other words a percentage of the person’s debt.

They may even have their own financing company like many car dealerships have. But this arrangement is more of a profit sharing venture with a bank, than it is their own company.

Then I picked up a book and a magazine and looked for one of the black leather chairs that were constantly being rearranged. Now they were over by the DVD section against one of the walls of the store. I sat and read for a while. I was so startled by the loud and confident sounding voice of Oprah Winfrey from the TV set that jutted out of the wall a few feet above my head that I almost spilled my coffee.

Oprah was talking to a celebrated author about his latest book. The next segment on the tv was a short excerpt from a new documentary about The Rolling Stones. The next was a short piece about a new cookbook.

I was just trying to read and drink my coffee, only to be blindsided by this–advertising!

In-store advertising. I had been wondering how money was made in books. It seems like the actual sale of the book doesn’t make anyone rich–especially not the author. Unless, of course, Oprah gets on board.

Borders isn’t a bookstore. They’re a website. The credit card is their affiliate marketing link. The tv advertising is the ads in their sidebar. And their shelf space (that they sell to publishers) is where they make their profit.

Borders is thinking in terms of multiple revenue streams, which is necessary these days, and is similar to a website that receives a lot of traffic and sells CPM (cost per thousand impression) advertisements.  The real job is to get people into the stores looking at products.

It’s like a newspaper.  The New York Times doesn’t make money from the paltry $1.25 it sells each paper for, it makes money from the full page ad Tiffany takes out hawking their newest silver bracelet.  It’s all about providing an audience.

So next time you feel guilty about thumbing through several magazines that you don’t plan on purchasing as you sip on your coffee, remember that you are doing exactly what Borders Books wants you to do.  So my advice is just enjoy it–that is, if you can find somewhere to sit.

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