my two penneth on the world of heavy discounting

Musings on the discounting of books.

Although new to the retail side of the book trade I have been a lover of books for more than 40 years, from the days of my local bookshop in Scarborough, Hardings, to the advent of shelves full of books in supermarkets.

 

Since we opened the shop it has baffled me the whole situation of books being discounted heavily on day 1 of their release. Where else can you find a flagship product at 50% off upon its release (if ever!)? What does that say about the perceived value of the printed word and indirectly education (we all learn something from ANY book we read)?

 

I will hold my hand up and admit I have bought books from (insert supermarket chain here) but would like to defend that by saying that for at least the last 8 years we had no local bookshop to be able to support. I understand the lure of the cheap paperback, indeed we have customers who have admitted that they have bought the odd “3 for a fiver” selection, but they were paperbacks and were usually bought as catch-up reads ready for the next/final in a series, or books that were then passed on rather than kept. Honestly, I kind of get that, in much the same way I get the wonderfully fickle nature of book lovers who, while they may have their favourite bookshop that they like to support, still can’t walk past a bookshop when away or in a new town. I do love the fact that some of them feel a little bit guilty! Heavens knows it was the same with me and the only reason I don’t buy these days is I own a shop! (Does that mean I am being hypocritical because I’m getting it cheaper... discuss!)

However, the idea of taking the biggest product(s) of the year and being able to let everyone have it for less than most of the industry can buy it for, on the day of its release, is totally and utterly preposterous. Not only does it make little to no business sense in the long-term (unless we have taken the turn down which Double Glazing and sofas have gone and have never any intention of selling anything for the price it is advertised at), it doesn’t make sense to alienate and price out of the market 800 retail outlets!

 

As a former teacher it was a huge bug-bear of mine that schools were judged on exam results. I accept there should be accountability but it shouldn’t come as a surprise that schools play the game and work solely to improve results, sometimes to the detriment of learning. Similarly, until there is a way of finding the bestseller on the TCM charts other than raw numbers then publishers are going to play the game of selling as many as possible regardless of the price. Walliams, Rowling, Hawkins (to name but 3) have all been at the top of the TCM charts for weeks and weeks at a time, but how many spent any time anywhere near the top of the indie’s chart put out at the same time? And how many of them had an ASP of more than ½ price? Indeed, during the “Debate on Discounting” article in the Bookseller (Aug 2), Juliet Mabey in suggesting special edition books for indies immediately saw a problem as it would mean 2 ISBNs and "splitting a big sale between editions and potentially jeopardising an author's chances of retaining a number one chart position”. Considering the number of books that proclaim themselves to be a “BESTSELLER” is being the top of the TCM really that important?

 

Now, I accept that most of this has already been discussed and there are lots of people that are blue in the face already. Indeed, it has been something I have been trying to get answers from publishers and authors since we opened. I sent an email to an establishment who has been offering a brand new book (the 1st by the author for 20 years) at half price 3 months before its release date, to ask why they felt compelled to devalue the price of the printed word so much, but am still waiting for a reply 2 months later! Another High Street store promoted a pre-order campaign whereby you could order the book in advance for half price and yet on publication day had the book in the shop at half price anyway, meaning the pre-order scenario was irrelevant (unless they wanted an idea of numbers to order)! Now I suppose there may be an issue of firm sales (non-returnable stock) in the case of the larger retailers or online sellers, which I can see the publishers being more interested in as it means they get the sale guaranteed. However, they don’t go on to TCM until the general public have bought them, so large quantities of firm sale stock doesn’t assist having a bestseller, so which is more important, bestseller or cash in bank? One publisher who sent me AI about a new autobiography out in the autumn got it in the neck a little when I asked them what they planned to do that meant we could stock it rather than glare at it on the supermarket shelf and to be fair I got a reply “so far we’ve had no interest from .... and we’re not giving giddy discounts to ... for it”, which then leads to the next question of loss leaders. Are the shops I am refusing to name, but we all know who, actually getting the huge discounts that they are passing on to the consumer or are they just using books in the way they seem to be using milk – getting people in to their store?

 

I am interested to know a little more about the makeup of the author contract, which will no doubt be a huge minefield (and I’m not expecting any answers). Do authors get a set amount per book regardless of selling price? Or, do they get a %age of the selling price or ASP? If the 1st then you can see why they might be interested in widely promoting their wares at a well known online site regardless of whether anyone else in the industry can buy it at that price or not. If it’s the 2nd, then I fail to see they logic in said promotion, it is surely doomed to failure?

 

So, what are the thoughts on the suggested solutions, and the solution, of a musing bookseller?

 

Well, earlier this year we tried to get our customers to consider the idea of #1in4. The idea that every 4th purchase was a high street purchase (not just books), but in order to get people back on to the high street and supporting local business. Maybe that is something we could all get behind more. People are feeling the pinch and we all love a bargain so maybe we have to try convince the general public to make small steps instead.

 

There have been rumblings about the return of the Net Book Agreement (NBA), but where does that leave businesses that have built a model around selling discount books? Do they go out of business (not what any of us want) or do they continue as a bookshop in a town where there might be another indie, and in all likelihood at least one more high street chain store, therefore flooding the market? If that’s the case, then which business is it that would fall?

 

Stephen Lotinga, chief executive of the Publishers Association, said: “There is no prospect of a return to the NBA and we believe efforts are better focused on matters such as supporting booksellers in their call for a reduction in business rates, which could make a genuine difference for independent retailers up and down the country.” To be perfectly honest I am not sure this works. I appreciate we are very lucky (as I think a few bookshops north of Watford might be) but the recent change in business rates was actually in our favour and still doesn’t solve the issue of “why should I have to sell something at a loss in order to be able to compete?”. Also, there is a big high street chain that has said they have been hugely hit by the change in rates, but they don’t appear to have stopped offering Book of Dust at half price, for example! The only real way business rates will benefit bricks and mortar is if online only retailers have higher rates to pay, but then there are independent businesses there too.

 

Some people have suggested a period after the publication date whereby all books have to be sold at full price. This is an option, but could see people holding out until the heavy discounters can get the price down, though I guess this is less likely as fans are notoriously impatient people and the heavy discounters are really only interested in numbers of books. It would be really interesting to see what this would do to turnover. ½ the number of books would reach the same amount takings-wise, and to be fair the TCM charts would still have the same book at the top of the chart, just with a lower number (or would it? Is part of the reason the books that reach the top of the TCM because they are so cheap?). This would still be only to abuse, after all as The Secret Bookseller pointed out there are shops who seems to be happy to trample over an embargo, so why would they wait until the required date to discount?

 

For what it’s worth, my suggestion would be to cap the level of discount that could be taken off an RRP. If you maxed the level at say 20% (totally arbitrary) for the 1st year of a book’s life (again totally arbitrary), which would mean that the days of the £20 hardback would probably be gone. Liz Kremer, vice president of the Association of Authors’ Agents was quoted in The Bookseller (Aug 2) as saying “publishers don’t believe all hardbacks are worth £20 either”. Limiting the discount would allow the hardback to be priced ‘sensibly’ and mean that ALL bookshops would be able to decide if they wanted to stock something based on its high saleability rather than watch from the sidelines as thousands are sold for a few pence. This also means that the discounter stores can still continue to exist.

Finally, and this is plea from the owner of an independent business and not just a book appeal…

For every £1 you spend with a local, independent business, between 50p-70p circulates back into your local economy.

Shopping locally supports local traders, their suppliers and the people they depend on to run their businesses.

Buying locally boosts your local economy, rebuilding confidence in the community, enabling local businesses to prosper and grow.

 

Shopping online or out-of-town may save you a little time but for every £1 you spend, only 5p trickles back into your local economy.

 

“Sadly it really is a case of ‘use it or lose it’.” (and to be fair to large parts of Stockton they are using it!)

 

N.B. The above post is, as the title suggests, musings and no more. I accept (while not claiming to fully understand) that there are laws, regulations and legal precedents that mean that there is a free market and that laws would need to be passed before any change could happen.