Barnes & Noble Sync UP pairs ebooks with print – for a price

17 November 2014

From TeleRead:

Barnes & Noble has introduced another service to lever off its bricks-and-mortar presence into greater ebook market share with the rollout of B&N Sync Up, which offers ebook pairings with a selected series of paperback titles – but for an additional $4.99. “Buy the paperback, get the eBook for $4.99. Keep both or gift either,” explains the B&N site.

Link to the rest at TeleRead

Leveling the Playing Field

12 November 2014

From author Steven Pressfield:

Throughout the 1990s, the American Booksellers Association—the trade organization that represents independent bookstores across the country—spent more than $18 million dollars suing publishers and big box book retailers. (read: “Booksellers Settle Lawsuit Against Chains“) The controversy concerned the third line item of my recent samples of book publishing Profit and Loss reports:


In 1994, the ABA accused Random House, St. Martin’s Press, Penguin, Houghton Mifflin, and others of giving special rebates and discounts to Borders Group and Barnes & Noble that were not offered to its membership. While publishers were extending independent stores a 40% wholesale discount off the retail cover price of an individual title, they granted chains secret additional discounts and credits that in some cases resulted in 50% off.

Wholesale discount policies, credit calculations and payment terms make up what is known as a publisher’s terms of sale. Every publisher has a one-pager that outlines their policies for retailers to order and pay for its books. The term sheets have lots of small type but the bottom line is pretty much the same for all of the big six publishers and their distribution clients. (When I was a publisher, I was distributed by two of the big six and the biggest mini-major).

But today there are two terms of sale models…wholesale and agency.

The wholesale model is the traditional model for orders of everything but eBook titles. Publishers, for the most part, invoice physical books to third party sellers (Amazon, B&N, Mom and Pop’s Independent story) at 50% off the retail cover price. So for a profit and loss report using the wholesale model, you can figure out how much revenue a book will generate by multiplying the total number of orders shipped by the retail cover price of the book and then cut it in half.

The agency model is different—it’s commissioned based—and brand new. It is exclusively for eBooks and I’ll get more into it next week.

. . . .

Back in the 90s, Mom and Pop stores had to pay $12.00 (40% off) for a $20.00 title from a publisher. The chains could buy the same book for $11.00 or even $10.00.  The profit margin is the difference between what a store pays the publisher to offer the title and what price it sells the book to consumers. In this case Mom and Pop got $8.00 for every hardcover book they sold while the chains were getting $9-$10 per book.

This discrepancy led to the birth of the “deep discounting” era. Publishers favored chains because they are capable of ordering a thousand copies of an individual title for every single copy an independent can order. This favoritism allowed the chains to out-price the independents. The chains took the extra discounts and credits from publishers and passed them on to consumers with big displays that trumpeted 20% off! Because of the volume of sales, it could pass on a discount and still maintain a healthy profit margin. In fact, Barnes & Noble began discounting New York TimesBestsellers 40%. Unless an independent store was having a “going out of business sale,” you could pretty much count on paying full retail price for a book at Mom and Pop. That’s a big disadvantage.

The superstore discounts of the 90’s drove readers to chains instead of Mom and Pop’s stores. Buying there was cheaper. Over time, the independents started closing up shop. Estimates put their numbers at about 1,400 today. But in 1991, they numbered 5,400.

The side deals between publishers and chains were wink-wink, nod-nod arrangements, and they helped the publisher as well the chains. In many instances for the extra discount along with a publisher’s commitment to pay for “cooperative” advertising (front of store placement), the chain would increase its order. Instead of ordering 2,000 copies of a big book that a publisher was desperate to get onto the bestseller list, it would take 10,000.

. . . .

If you look at the under the table deals from the publishers’ point of view, favoring the chains back then made sense. Instead of having to employ an army of sales people to canvass thousands of independent stores for single or two or three copy orders, they could send one salesperson to Borders and get a 10,000 order for the entire country. It was more efficient.

The economies of scale that the chains brought to the table were irresistible because publishers were able to increase print runs (more orders meant bigger first printings and cheaper per unit costs) and decrease overhead (lay off sales people).

. . . .

There was only one problem. The different kinds of PUBLISHER/CHAIN “terms of sale” shenanigans were illegal. The Robinson-Patman Act of 1936—an era when small businesses were viewed as important job creators and vital components of a community—expanded on the old Sherman Antitrust Act of 1890. Robinson-Patman forbade anticompetitive business practices.

. . . .

What appeared to happen when a single market was dominated by just a short list of companies was either intentional or unintentional collusion.  The steel industry was a perfect example. The price fixing became so outrageous that the U.S. would eventually lose the entire industry to foreign markets. Once J.P. Morgan’s U.S. Steel raised prices, so did Bethlehem Steel and Jones and Laughlin.

. . . .

Book publishing, though, is not La Cosa Nostra. It’s not that efficient. At least not in the 1990s.

Citing the Robinson-Patman Act, the ABA sued publishers in 1994 for unfair business practices. The legal “discovery” process—a defendant has to turn over all its correspondence, record keeping etc. to the court—soon revealed the obvious. The publishers knew they’d been caught, so they settled out of court and agreed to abide by the same terms of sale for all of their wholesale customers. Estimates place the ABA’s reparations from the publishers of upwards of $25 million.

Since then, to the best of my knowledge, the publishers have kept their word. Ironically, the penalty for colluding with Barnes & Noble and Borders resulted in an unintentional collusion among publishers. In order to level the “terms of sale” playing field, the lights in the publishing stadium had to be turned on (the ABA’s lawsuit did that) and all of the publishers were able to see what terms of sale their competitors were offering. So today, retailers of all stripes order and pay for a book in just about the same way from all of the big six and their distribution clients.

All of the big players came down to essentially the same place. So Random House and Simon & Schuster and Penguin and Macmillan and Hachette and HarperCollins don’t compete with each other in the ways they “sell” a book.

. . . .

Back to the ABA.

In 1996, emboldened by their victory over the publishers, the ABA took on the chains—Borders and Barnes & Noble. One of the bones of contention for them was predatory pricing. Predatory pricing is selling a product cheaper than it costs until you drive off competition.  The chains settled their case with the ABA, too. But for pennies on the dollar of what it cost the ABA to litigate.

The judge in the case didn’t buy the ABA’s argument that the chains’ behavior hurt consumers, a critical element of Robinson-Patman. Prices went down not up because of the chains’ behavior. It was clear he wasn’t about to even consider awarding damages to independent bookstores. So in 1998, the ABA accepted $4.7 million as reimbursement of court fees from the chains. But the problem was that the case cost the ABA more than $15 million to take to the judge.

Link to the rest at Steven Pressfield and thanks to SMH for the tip.

Here’s a link to Steven Pressfield’s books

His and Hers Bookstores

11 November 2014

From The Bridge:

Many people love walking around Montpelier and poking around the little shops, especially the book shops. Downtown Montpelier has two well-established bookstores: Bear Pond Books (est. 1973) and Rivendell Books (est. 1992). It turns out these stores are owned by the husband and wife team of Rob Kasow and Claire Benedict. To local Montpelier residents this might be old news, but if you live outside city limits, this might be something of a romantic surprise.

Kasow told The Bridge in a recent interview at their joint office on the second floor of Bear Pond Books that they started off in the bookselling business when they bought Rivendell 12 years ago after seeing it for sale on the Internet. However, the couple had never been to Montpelier before. Rob said he had been working in another state as the owner of three paint and wallpaper stores at the time. The couple said they saw the store for sale online and decided to buy it in 2002. Then, in 2006, they bought Bear Pond Books from long-time owners Michael Katzenberg and Linda Prescott. Each store has its own niche and Rob runs Rivendell while Claire runs Bear Pond.

. . . .

Rivendell also has a large children’s section in the back that shares space with an enormous male Russian Desert tortoise named Varuca. The front has a wide selection of books, with the most popular being fiction, spirituality and cooking, according to Rob. As for personal reading preferences, Rob likes to read history, biography and political science while Claire leans toward fiction.

Therefore, Claire keeps a large fiction section in her store.

Link to the rest at The Bridge

Black Friday Leads to Publishing Push

11 November 2014

From MSN TopStocks:

With Black Friday looming ever closer, the dash to claim space on crowded holiday bookshelves intensifies this week as some of the season’s most anticipated titles go on sale. What’s unclear is whether any blockbusters will emerge that prove as irresistible as the Steve Jobs biography a few seasons ago.

It isn’t for a lack of trying. On Monday, Dutton, an imprint of Penguin Random House that is majority-owned by Bertlesmann SE & Co., will publish an estimated 300,000 hardcover copies of “No Hero: The Evolution of a Navy SEAL.” The book was written by Matt Bissonnette under the pseudonym Mark Owen in collaboration with Kevin Maurer. It is Dutton’s largest single nonfiction bet of 2014.

“We wanted to time it to Veterans Day and the holidays,” said Brian Tart, Dutton’s publisher.

. . . .

Retailers say it is now or never. “If you want to make a splash, you’ve got to have your book out before Black Friday,” said Sarah Bagby, owner of Watermark Books & Cafe in Wichita, Kan. “With the elections over, people are ready for entertainment.” Ms. Bagby estimated her store generates 30% of its annual sales in the month of December.

It is shaping up to be a holiday season with many tangled subplots. Will Hachette and Amazon sort out their differences over e-books or will their bitter fight extend for weeks to come? Will consumers shop the stores as passionately as they did in 2013, or will they instead turn in larger numbers to the Web for their purchases? And how will Barnes & Noble Inc. fare: Leonard Riggio, chairman and largest shareholder, earlier this year said this will be a “really, really critical” shopping season for the nation’s largest bookstore chain.

. . . .

Some publishers are pulling out all the promotional cards in their playbook. William Morrow, an imprint of HarperCollins, sent T-shirts to the Watermark Books & Café to help gin up excitement about the Patricia Cornwell novel, the first work the author has written for William Morrow since signing an eight-figure, two-book deal in 2013.

“Patricia Cornwell is big in the Midwest, and the publisher sent some swag that got our attention,” said Ms. Bagby. The bookstore owner said she would leave it up to her staff to decide whether to wear the shirts on Nov. 11 when the book, the 22nd featuring medical examiner Kay Scarpetta, will be published.

. . . .

“People over the last few years have started shopping later and that’s a trend,” said Jamie Raab, publisher of Hachette’s Grand Central Publishing. “What’s happened is that things really kick in on Black Friday, which is why everything is really revving up now.

Link to the rest at MSN TopStocks and thanks to Terry for the tip.

Why I Own Barnes & Noble Stock

6 November 2014

From The Motley Fool:

If you need a book right now, you have a limited set of options. Buying it online is out, as it doesn’t fulfill the “right now” requirement. A used or local bookstore would be a great bet if the book is popular, but if it’s not — and sometimes even if it is — you’re probably out of luck. I’ll put in a plug for the local library, but let’s say you want to own the book. What are you left with — Barnes & Noble.

Barnes & Noble runs over 650 retail locations and another 700 college locations across America. There is probably one near where you live or work, and if you want a book right now, it’s probably where you’ll have to go. That’s not to say that is a non-factor, but it still lacks the immediacy of Barnes & Noble.

. . . .

Having a lot of locations and being the number one brick and mortar book chain goes a certain distance, but if history has taught us anything, it’s  that bookstores aren’t guaranteed a future just because they exist. The failure of Borders is the prime example of a business that rested on its laurels and was punished for doing so.

I hold onto Barnes & Noble because I think that it’s more than just a large system for distribution. It’s also a business that can make mistakes and not go out of business because its fundamental operations are strong. Even with the failure of the Nook and the rise of Amazon, Barnes & Noble has managed to survive and thrive.

. . . .

Amazon is selling an estimated $5.25 billion in books annually, giving Barnes & Noble’s $6.4 billion a run for its money. Amazon’s revenue is likely to continue increasing as the company generates more e-books, more e-readers, and develops faster shipping. In order to believe that Barnes & Noble isn’t a company that was good but that it is still good, we need to know what it’s doing to fight for that market share.

First, it’s given up on the Nook. The company is ditching the cash sucking Nook division in a spin-off that should be complete by spring 2015. The end of the Nook at Barnes & Noble is recognition that Amazon and other device manufacturers simply do it better and cheaper.

. . . .

I own Barnes & Noble because it does what great companies do, it learns from its failures, and it plans for a future that focuses on its core strengths.

Link to the rest at The Motley Fool

Barnes & Noble forced out of The Bronx

22 October 2014

From Welcome2TheBronx:

Imagine a borough of over 1.4 million people without a single book store.

We keep hearing our Borough President mentioning The “New” Bronx when he talks about all the developments going on in our borough —  something which many find rather offensive.  When the Mall at Bay Plaza opened back in August, he used it yet again.  Since the mall opened, several businesses have been forced out by rising rents at the malls developed and run by Prestige Properties and now our last bookstore has fallen victim to this “New Bronx” mantra.

Welcome2TheBronx first heard about this from Amelia Zaino, a 24 year old graduate student at Lehman College studying Geographic Information Studies who lives in Co-op City. Zaino posted about it in the Facebook Group Bronx Movers & Shakers(after reading about it in the Co-op City Times) and immediately started a petition, along with her friend Jessica Cruz, addressed to Prestige Properties to keep Barnes and Noble in place at Bay Plaza.

. . . .

In a statement issued to Welcome2TheBronx, Barnes and Noble’s VP for Development, David Dearson said, “Our lease is expiring and we worked diligently to extend the lease. The property owner informed us that they had other users who were willing to pay in excess of what Barnes & Noble was paying for the leased space. We operated our Bronx store and were happy to serve the community for 15 years. We’ll look to re-open as soon as an opportunity presents itself.”

Link to the rest at Welcome2TheBronx

Thriving in an Amazon world

21 October 2014

From Fortune:

Don’t tell Sharon Anderson Wright that bookstores are a dying industry. The 56-year-old CEO of Half Price Books took a disorganized collection of stores co-founded by her mom—they started by selling used paperbacks and hardcovers out of a dingy former laundromat—and transformed the operation into a chain that is defying a seemingly inexorable tide. While bookstores are shuttered around the country and industry revenue has decreased an average of 3.2% a year over the past five years, Half Price Books is growing. It opens about five stores a year, with revenues rising from $50 million in 1995 to $240 million in 2013. The company is able to resist the tsunami by diversifying its offerings and preserving an in-store experience, while keeping its real estate costs low and remaining debt-free as it expands beyond its 120 retail locations in 16 states. And today the stores still honor their founding promise: They’ll buy virtually anything that is printed (or recorded), excepting newspapers. That’s a proposition that keeps customers returning—in any era.

I was born in Tulsa, the youngest of three girls. When I was 5, we moved to Texas, and my dad became a cuckoo-clock salesman. In 1968 my mom [Pat Anderson] decided to get her psychology degree. Ken Gjemere [pronounced jim-ree] was a buyer for Zales, which my dad sold to, and our families hung out together.

Ken was a World War II vet who was awarded the Silver Star for valor. He became an environmentalist and a staunch peace activist during the Vietnam War years. I always called him our fearless leader. My mom was a protesting hippie type, and they both loved books and recycling.

. . . .

They found a 2,000-square-foot location on Lovers Lane in Dallas. It was a ratty old laundromat. The monthly rent was $174. We cleaned it up, built our own shelves, and painted it. We’d load the trucks, unstop the toilet, everything.

As a teenager, I read Kurt Vonnegut, Robert Heinlein—anything science fiction and strange. I was 13, and my job was to sort out the books and shelve them. I became kind of an anthropologist, watching what people read, what they sold and bought.

There weren’t many bookstores at all back then. Ours was an original concept. Pat and Ken wanted to make sure there were affordable reading options for everyone in a comfortable, inviting place to shop. By buying all the items people brought in, they weren’t censoring anyone. We’d pay cash for anything printed or recorded except yesterday’s newspaper, which meant we had current offerings to sell. It was different from other used bookstores, where you traded for books, or high-end antiquarian stores, which intimidated people. We did so well, we opened our second location eight months later in a former meat-storage place.

. . . .

In 1976, after I graduated from high school, I became the manager of our store in Richardson, Texas. My dog Dylan and I were the only ones there most of the time. I’d hide the money in a coffee can behind a section somewhere when I needed to go out to get something to eat. In our music section, we bought 45s, eight-track-tape cassettes, Beatles records. Now we have iPads as well as high-end vinyl. It’s come full circle.

. . . .

From 1979 to 1981, I worked four days a week as a bookseller in the flagship store and took classes at Richland Junior College. I never got a better offer, and eventually it was obvious I was the one who would stick around. I became Dallas district manager, then general manager in 1990, and started shadowing my mom.

We spent almost every day together. She was a smoker and had chronic obstructive pulmonary disease. She lost patience in her last couple of years. We knew she wasn’t long for this world. The day she died, Ken was partially retired, and I became president and CEO. I was scared to death. It was 1995, and I was 37. My mom was 40 when she opened the first store in 1972.

. . . .

I’ve always operated with consensus. People did what they needed to do, and I learned what I needed to learn. We only did what we could afford to pay for, so we always operated on a cash basis. I had my first kid at 40, then the second one at 43. They’re my priority, so I’m often answering emails at 1 to 2 a.m.

Today we have our own publishing arm, and we produce our own stationery, calendars, and CD wallets to sell. Our wholesale division sells to museums, independent bookstores, and Barnes & Noble. We have five to six buyers traveling the country, buying remainders that we can sell at half price. If we buy too much, we sell the extras to Barnes & Noble or others. All of us in the book world feed off each other. There’s competition, but it’s all with great people.

The book industry has changed dramatically because of Amazon, e-readers, and tablets. Stores can’t ignore the fact that you can get just about any book you want while you’re in your pajamas, and it has had an effect on everyone. But there are still a lot of people who like to browse bookstores and be surprised by what they find. People like to handle paper. It’s the permanency of it. We did a survey, and our customers buy 37 books a year. With the recession, we closed three stores, but we’re still profitable.

. . . .

Borders was in too high-priced real estate and was stuck with new books you get little money for. Barnes & Noble is facing that too, and spent a lot of money on the Nook. We’re the tortoise that’s slow and steady. We just opened in St. Louis, and are looking at Atlanta, Denver, and Nashville. If we can afford it, we’ll do it.

. . . .

The main location is the only retail location where we own the building and land itself. So this is the only place where we truly have control over our neighbors. We wanted to make the neighborhood better, so we purchased the land across the street. We have Half Price Books and Whole Foods here, and I wanted REI, a like-minded company, to be across the street. So I went to REI in Seattle and convinced them to come. Now I’m trying to handpick other stores that will appeal to our customers, rather than take the first tenant who comes along.

Link to the rest at Fortune and thanks to C.G. for the tip.

Man spends evening locked in Waterstones after staff shut up shop

17 October 2014

From The Telegraph:

Being locked in a bookshop over night with thousands of novels at your disposal might sound like a bibliophile’s dream.

But the reality is not so romantic, if one tourist’s experience in the Trafalgar Square branch of Waterstones in London is anything to go by.

David Willis, from Dallas, Texas, wrote on Twitter on Thursday night that he had been locked inside the shop after spending 15 minutes upstairs.

At 10.11pm, Mr Willis posted a picture showing a shuttered door and a rack containing pictures of Kevin Pietersen’s autobiograpy, along with a message claiming he had been trapped inside for the past hour.

He wrote: “This is me locked inside a Waterstones bookstore in London. I was upstairs for 15 minutes and came down to all the lights out and door locked. Been here over an hour now. Supposedly someone is on their way. #nofilter #london”

. . . .

Other Twitter users were quick to offer Mr Willis help with some telling him to call police, some offering him food, and others giving book recommendations to help him pass the time.

. . . .

And web developer Tim Archer said: “@DWill_ @Waterstones tell them you’ll be randomly moving the books until you are released, that should speed them up a bit.”

. . . .

Waterstones recently reported a rise in book sales again after years of decline due to competition from online retailers and the growth of e-books. The firm was unavailable for comment.

Link to the rest at The Telegraph

ABA, NAIBA Urge Veto of Bill Punishing New Jersey Indie Bookstores

17 October 2014

From The American Booksellers Association:

The American Booksellers Association and the New Atlantic Independent Booksellers Association (NAIBA) are urging New Jersey Gov. Chris Christie to veto a bill that discriminates against independent bookstores that mistakenly disclose customer information to the police and other third parties. In a letter sent last week, ABA CEO Oren Teicher and NAIBA Executive Director Eileen Dengler expressed support for legislation that protects the privacy of bookstore records but opposed Assembly Bill 1396, which authorizes customers to file civil suits against any bookstore that discloses customer information in the absence of a court order. A court can impose a fine of up to $1,000.

In their letter, Teicher and Dengler said that small stores are very aware of the importance of protecting reader records and noted that independent bookstores vigorously fought on behalf of customers’ privacy rights in several high profile cases.

. . . .

“Independent booksellers are committed to protecting reader privacy, but legislation should recognize the operational challenges facing small businesses, especially when it comes to the matter of paying fines,” said Teicher. “Bricks-and-mortar stores depend heavily on young and sometimes inexperienced staff members who may make mistakes. They should not be punished in the same way as large Internet companies that can direct all inquiries to in-house lawyers who have experience with these requests.”

Teicher and Dengler’s letter stressed that “reader privacy is a core belief of independent booksellers, [and] they have made a concerted effort to educate bookstore staff about the importance of protecting privacy.”

Link to the rest at The American Booksellers Association

Amazon to open retail store in NYC

10 October 2014

From Jefferson Graham, USA TODAY

Could this be Amazon’s Miracle on 34th Street?

Online retail giant Amazon will take on Macy’s and other Herald Square retailers with a physical store of its own for the holidays in New York, according to a Wall Street Journal report citing people familiar with the plans.

The Manhattan location would function as a “mini-warehouse” for same-day delivery in New York, product returns and pickups of online orders, according to the report.

Amazon has shaken up the retail world by offering lower prices than many brick-and-mortar stores and offering comparison app tools that brought forth the trend of “showroom buying” — folks going to a physical store to see the item, then going home and ordering it online to save money.

The E-tailer, now with a line of its own tech products — several Kindle e-readers and tablets, a TV set-top box and new smartphone — would be able to put its homegrown goods in front of more eyeballs and tout its growing offering of same-day delivery. That service is available in 12 cities, including New York, Los Angeles, Atlanta and Phoenix.

Richard Doherty, an analyst with the Envisioneering Group, says New York attracts many foreign tourists who shop on Amazon back home, but find many products only sold here.


“There’s still a segment of the population that’s touchy-feely,” says Bajarin. “They want to see the product up close, and have it shown to them.”

By opening in New York during the holidays, Amazon “gets high traffic, and the kind of feedback it needs to see if it wants to expand.”

Rob Enderle, an analyst with the Enderle Group, says Amazon wouldn’t just stock its own products. “Even the Apple Store carries non-Apple products,” he says. “They’ll showcase Amazon, but also show off the breadth of Amazon’s catalog.”

According to the Journal, the address for the store is 7 West 34th Street, across from the Empire State Building and a block east from busy Herald Square, home to the flagship Macy’s, and site of the classic 1947 Christmas movie Miracle on 34th Street, about a Santa Claus put on trial for believing that he is indeed Kris Kringle.

Read the rest here.

From guest blogger Randall, who has been unhappy with Santa since the forth grade.

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