der Buchhandel
book trade
The entire industry concerned with the production, distribution, and sale of books.
Der Online-Versand hat den traditionellen Buchhandel stark verändert.
Online shipping has greatly changed the traditional book trade.

book trade / bookstore
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book trade
The entire industry concerned with the production, distribution, and sale of books.
Der Online-Versand hat den traditionellen Buchhandel stark verändert.
Online shipping has greatly changed the traditional book trade.

The word is made up of 'Buch' (book) and 'Handel' (trade). So it literally means 'trade in books' and describes either the entire industry or an individual shop.
Der Buchhandel in Deutschland hat eine lange Tradition.
The book trade in Germany has a long tradition.
You can tell from the context whether the whole industry (meaning 1) or an individual shop (meaning 2) is meant. If the topic is business, culture, or the industry as a whole, meaning 1 is meant. If it is about a specific place to shop, meaning 2 is meant.
Die Digitalisierung stellt den gesamten Buchhandel vor große Herausforderungen.
Digitalization poses major challenges for the entire book trade.
In the context of the industry, a distinction is often made between 'stationärer Buchhandel' (brick-and-mortar book trade/local bookstores) and 'Online-Buchhandel' (online book trade).
Viele kleine Läden gehören zum stationären Buchhandel.
Many small shops are part of the brick-and-mortar book trade.
publishing house
'der Verlag' and 'der Buchhandel' both have to do with books, but they do not mean the same thing. A Verlag publishes books or other media and organizes their publication. Buchhandel usually refers to the industry in which books are sold and distributed. More rarely, 'der Buchhandel' can also mean an individual shop; in everyday language, people are more likely to say 'die Buchhandlung' for that. The words can be confused because publishing houses and the book trade work closely together. As a practical rule: the Verlag makes and publishes the book, while the Buchhandel brings it to buyers.

Viele kleine Läden im Buchhandel bestellen neue Bücher direkt beim Verlag.
Many small shops in the book trade order new books directly from the publishing house.
Der Verlag hat den neuen Roman im Frühjahr veröffentlicht.
The publishing house published the new novel in the spring.