Margin call

From The Bookseller:

Seven years ago, The Bookseller published an open letter from Sam Husain, then chief executive of Foyles, exhorting publishers to support bookshops with better terms. He wanted an average discount closer to 60%, an improvement of 20 percentage points on what he saw was prevalent at the time. He argued that despite lower volumes on some titles, bookshops needed to be rewarded for the value they put into the market, including visibility, knowledge and author events.

Last week Blackwell’s made a similar intervention in a private letter to suppliers, requesting a 7% promotional rebate, to be applied on all invoices after 7th February—equivalent, it seems, to increasing the discount it receives on the published r.r.p. by a modest amount.

. . . .

In terms of strategies, it’s hard not to think Foyles did it better: an open discussion about the future of high street bookselling made sense, a blanket demand for a back-hander looks more gauche. It was no surprise that by the time The Bookseller saw the letter, its contents were already part of a lively discussion on Twitter. 

There was also confusion over the demands: publishers have long been prepared to give a bit extra in return for additional visibility, but Blackwell’s offers no such assurances, stating that the extra discount would support its drive towards profit and growing the market. The letter, too, stipulates that the rebate is for 2020, but does not say what will be different in 2021—either Blackwell’s needs the money now for a particular reason, or it will need it forever. Publishers expect the latter.None of this means Blackwell’s is wrong to make the demand, or amiss in setting out the costs and virtues of running bookshops staffed with savvy booksellers. Missteps are forgivable when the argument is sound. And it is. Blackwell’s has grown sales by £15m in three years, but its overheads continue to rise too. The same is not true for all publishers: although they screw their faces up at the accusation, many are more profitable than once they were, and it is not unimaginable that they could use some of what is the digital bounty to invest in bookshops. Academic publishers may feel less secure, but their discounts—far lower than those offered by trade publishers—were established in a bygone era when textbook prices were high, and student need was reliable. Wherever you sit, Blackwell’s is right to argue for an adjustment. 

There is a wider discussion to be had, too. Long forgotten in Husain’s missive was a call to use consignment—whereby booksellers only pay for the stock once it is sold—a suggestion perhaps too radical at the time. But the “returns” bit of the current model is wasteful, bad for profit and bad for the environment. Any discussion on terms must include a review of this model. 

Link to the rest at The Bookseller

2 thoughts on “Margin call”

    • Some have prices, either explicitly or in the barcode. Some have prices covered by a sticker from the bookseller, or an override price from the bookseller triggered by the barcode doing a lookup from internal inventory.

      There is no good assumption that publishers listing book prices visibly for readers have any impact on actual book prices. That’s why MSRP means Manufacturers SUGGESTED Retail Price.

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