I probably see your name on a daily basis, especially if your house is part of my extended “family” that prints about 80% of the childrens books in the world. I am horribly curious now, care to share? My email is on my profile.
My children’s books are with a fairly small publishing house, drachillix so I’m probably not one of those names you see every day. I’ll shoot you an email with the details…
Convenience is a big factor, as is instant gratification (not having to wait). A lot of people like having a local bookstore, and they patronize the store just to keep it around.
Amazon’s “infinite selection” is often illusory. There are books on there that Amazon doesn’t know how to get, and not everyone is comfortable ordering used or “like new” copies from some unknown affiliate. Also, their very size makes organization difficult. It’s much easier to go into a bookstore that has all of the Native American books sorted by tribe than to struggle with the searching on Amazon, especially when names are counterintuitive. For example if you search on “crow” to find books about Crow indians, you’ll find “Fools Crow” (about a Blackfeet man) and “Crow Dog” (about a Lakota man) near the top of the list. It takes a lot of digging to find the right stuff. In my store, the Native American books are shelved by tribe.
Human service means a lot, too. People come in to the store and ask questions. We know our stock and we know our local area. We sell a lot of books that you simply can’t find in stock anywhere (Amazon would takes weeks to get them), and we stock darned near everything by local authors and about local subjects, even when they’re self-published without an ISBN. We also deal with “there was this book in the paper last month–I think the author’s name was Smith or Smythe or something like that and it was about some disease” questions a lot.
We don’t have a coffee shop. I don’t like the smell of coffee, and I don’t want to get up at 5:00 in the morning to open up. 
Besides, we’re in a small town and there’s a perfectly good coffee shop a block away.
Again, Amazon’s selection works against midlist authors when it comes to discovering new books. With ten thousand new children’s books out there, how are they supposed to spot mine?
If you’re talking about affiliate programs, why on Earth would an author want to set up an affiliate program with Amazon instead of doing it with a local store and keeping the profits in their own community? I don’t know about your town, but mine needs economic stimulus, and we sure don’t get it from Amazon!
That’s where “brick and mortar” stores make a difference. I own a bookstore, and I write books. Even though Amazon sold several orders of magnitude more J.K. Rowling books than my books last year, my store sells ten of mine for every one Harry Potter. In fact, we have at least three or four other local authors who outsold J.K. Rowling in my store last year.
Besides, great selection and discount prices weren’t created by Amazon. Virtually every mainstream bookstore buys through the same distributors and publishers. Whether your local bookstore has what you’re looking for in stock or not, they can probably get it in a few days or a week. Almost all bookstores have sales. And if you’re buying a $6.99 paperback from Amazon, the shipping will cost far more than you’re saving in discount (if, in fact, they’re discounting that particular book).
Thanks for answering my questions, gang; I find this pretty interesting.
Final muddled thoughts/ sporatic summary:
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I’m guessing “midlist” is defined as rankings between 101- ~10,000 (30,000?); go far beyond that and the brick and mortar chains won’t stock them.
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While total demand for books has gone up (due to the Amazon effect), a lot of that has been channeled into the used market.
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WAG: If you are an academic or specialty author (i.e. in the 100,000(?) range), you are helped by Amazon due to price and availability effects.
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Drop below a certain threshold (300,000???) and boutique shops might regain their edge.
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a. A lot of people won’t bother “saving” 20% off of a $7-12 book via Amazon. Brick and mortar shops might do decent business in that territory.
b. WAG: Local shops may find more price resistance at $30+ than they used to. -
One used bookseller once told me that the biggest online challenge he faced was simply that people spent less time reading books than they used to. Instead they’re posting on fricken message boards. (Ok, I made that last sentence up).
------- We sell a lot of books that you simply can’t find in stock anywhere.
-Er, wouldn’t you want to post them at Amazon at an appropriate markup? Or is the demand so regional that you wouldn’t want to bother? (Obviously, you would rather have the foot-traffic --unless the marketplace markup was high enough). Or does Amazon itself not handle certain titles as a matter of policy? Or does setting up an Amazon page for a given title just encourage people to sell their used books there?
-------- Again, Amazon’s selection works against midlist authors when it comes to discovering new books. With ten thousand new children’s books out there, how are they supposed to spot mine?
Gotcha. OTOH. Narrower niches might benefit. For example, I was looking for a nonfiction scientific children’s book for my niece, and wasn’t overwhelmed with options (though I seem to recall there was a nice book on the wind which won an award). I’m speculating that writing in a niche that is likely to be reviewed by someone online might help.
That’s it: we need more critics! 
I think ABE (and to a lesser extent, ALibris and half.com) are to be credited with the phenomenal decline in price for used books of late. Amazon pushes used on their site because it’s more profitable for them, but they still haven’t caught up with the sheer volume of used books moved through ABE.
Of course I don’t want it on Amazon. I want it on my own site (which has 2-1/2 million titles, by the way). People looking for information about our specific area are more likely to use Google than Amazon, and Google finds my carefully-designed site better. Why share profit with a competitor?
Take a look at www.booksense.com to see what the indys are up to these days. You’ll have to put in your zip code, and it will take you to the closest member site.
Yeah, that’s very true. Wearing my other hat (author), I try to get my books on Amazon, and we do pick up some sales there. Again, if you’re specialized enough, people will find a dedicated Web site (which I’ve set up for my books) with Google before they’ll find your book amidst all the chaff at Amazon.
With my tech books, I sell far more from my own Web site than Amazon sells. With my children’s books, the numbers are reversed.
I should clarify something in the previous post. When I mention “my” Web site in the 2nd response above, I mean my bookstore’s Web site (the one with all the titles).
When I mention “my own” Web site in the final paragraph, I mean the dedicated sites I’ve created for the books I’ve written. Sorry if that was confusing.