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Book Discounts: The Disquisition

Joe Nocera has an article in today’s NY Times which uses Harry Potter as a framework to investigate the phenomenon of book discounting. He’s done his homework.

The big retailers – B&N, Amazon, Costco, Target, Wal-Mart – are selling HP7 at 40-50% off (or more) the list price of $35. Independent retailers are not – I bought my (two – one for me and one for my kid) copies at an independent bookstore in Brooklyn for $30; other stores are selling it full-price.

Nocera delves into the "screwball logic" of bookselling, covering familiar territory:

  • Returns – "Name another industry, for instance, where the manufacturer agrees to take back — and reimburse the retailer! — for unsold merchandise."
  • Volume – "And what other business can you think of where sales are essentially flat, yet the manufacturers keep ramping up volume? In 1980, the book industry produced about 42,400 new titles, according to the R. R. Bowker Company, which monitors new books. By 2001, the number had jumped to 141,700, and 168,000 by 2005."
  • Discounting – "You just don’t see other industries losing money on their hottest brand to get people to buy less desirable merchandise. But that’s what the book industry does."

Nocera finds reasons for stores like Costco and Target and Wal-Mart to heavily discount HP7 – customers come into those stores for a wide variety of items, and enticing them with Harry Potter is a good way to get them to come in and buy all the other things they really need. He also finds a good reason for Amazon to discount – to entice people to get more comfortable with online shopping.

But, Nocera says,

[This] brings us back to the original discounter, Barnes & Noble, which, unlike its rivals, would very much like to make money on the book. So why is it discounting the book so heavily? Because it has no choice. Costco may not view it as a head-to-head competitor, but every book Costco sells is a book sale Barnes & Noble has missed. As for Amazon, the fact that it has a set of motives different from Barnes & Noble’s is meaningless. No one doubts that Amazon is a direct competitor.

“It’s almost biblical,” said Sara Nelson, the editor of Publishers Weekly. “What they did is now being done to them.”

One interesting fact that Nocera points out is that over 50% of all books sold are being sold in non-bookstores. (That doesn’t mean 50% of TITLES are being sold there – we’re just talking sheer bulk.) Bookstores are increasingly a long-tail business. Which means that the independent bookseller – always the home to the long tail – may ultimately be the book outlet that thrives.

A final note: Could we please stop the comparisons of the Riggios to the Mafia? You’d think the Times would be tired of doing that by now. And Wal-Mart makes the Riggios look like pikers, frankly. 

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1 Comment »

  1. [...] in German cannot be discounted for nine months and in France, there is a limit of 5% discount. And this article has some information about how the publishing business works in the [...]

    Pingback by Publisher Challenges Discounters | Quincy Tahoma Blog — April 13, 2011 @ 5:15 pm

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