December 21, 2003

Some Thoughts on the Book Biz

James Joyner, a man in the book business himself, commented on my post on Barnes & Noble desiring lower prices. He writes,

Interesting. As one on the other end of the book business--an acquisitions editor with a publishing house at the mercy of the B&N's of the world--I always just assumed that such efforts were a way for the book chains to keep more shelf space devoted to schlock books that are almost pure profit.

We're actually quite price sensitive and have tried to keep prices down well below that in the article. The problem is that the economy of the book business is just whack--discounts to wholesalers and mass chains in the 47-50% range, payments made on credit and usually well behind schedule, and a no-risk situation for the retailers, who can return books--often damaged--for a full refund if they don't sell.

I'm sure there are plenty of things B&N does that's not in the best interests of their customers or publishers (Some publishers won't sell through B&N). The company is no more virtuous than any other. To tell you the honest truth from the front lines of retail bookselling: we don't care who's books we sell. The goal of my superiors from the store level on up is to put the book the customer wants in their hand. If it's a B&N house title, fine; if it's someone else's, fine too. What B&N does by expanding its publishing business is inject some more competition in certain markets (classics, crafts, some cooking).

James' mention of returns is interesting. I've read comments (don't know of any links) from Len Riggio saying how much he hates returns. At a store-level it can be a waste of time. It does give store managers and company buyers the flexiblity to take a chance with a book, but that risk then is on the shoulders of the publishers.

Then there are the deep discounts. I'd like to say that if the base prices were lower to begin with then there would be no need for the discounts. However, that doesn't take into account the economics of physically making a book and the tough barganing of huge retailers like Target and Wal-Mart who get more favorable prices than B&N (but sacrifice that with a lack of selection).

I think more experimentation is needed. So far, e-books are a bust, but maybe print-on-demand technology will help alleviate the need to print lots of books that may be returned and allow non-blockbuster titles with little-known authors to make a profit.