Us small firms who inhabit the outer reaches of the rather incestuous world of publishing are suffering at the moment. And like most trades or professions we tend to think that the problems are unique to our neck of the woods.
On the one hand we have the internet with online booksellers like Amazon cutting margins and, now that the net book agreement is no more, offering our books at prices that the bricks and mortar booksellers can’t match. On the other hand, the high street retail market is shrinking.
WH Smith’s hasn’t been a proper bookseller for a long time, although there are signs that it is trying to recover lost ground, and Ottakar’s has been swallowed up by Waterstone’s.
It’s fairly obvious what will happen. In the past you went to both chains and even if one didn’t like your book it was possible that the other would. Now, of course, there is only one, much more powerful buyer.
It struck me while I was at a conference for independent publishers and booksellers the other day that we weren’t as unique as we thought we were. We, too, suffer under supermarkets, not that they really affect really small publishers but they do affect small booksellers.
But we don’t suffer as much as farmers, who are being squeezed to provide items cheaper and cheaper. How many people, for example, realise that when a supermarket does a special offer, it’s the supplier that pays not the supermarket?
Likewise with book chains. Those three-for-two offers beloved of the big book chains mean that publishers must give bigger and bigger discounts. And, I nearly forgot, pay money towards the "marketing spend" as well, although this seems most of the time just to be a garish three-for-two sticker.
At least the farmer doesn’t get back a pint of milk with the top removed. In other words he doesn’t suffer from "sale or return," a practice which amazed me when I started publishing eleven years ago. It still amazes me.
I started to think that every business provided sale or return. If the clothes shop didn’t sell those Armani suits they could get their money back. But it’s not true; it’s only us and the music business that does sale or return apparently. And these returns are supposed to come back in re-sellable condition, except they rarely do.
But I digress. What are we doing about it and what can we do about it? That’s a genuine question. I’d like feedback on how other small business areas cope.
What we are doing is adopting a form of "farmers’ market." We are cosying up to the independent sector. It may seem very odd, but small publishers and small bookshops have, it seems, always regarded each other with some suspicion. Not now; we need them and they need us.
There have been suggestions that we offer them bigger discounts. The way it works at the moment is that the small bookshops source most of their books from the two or three big wholesalers. We, of course, have to supply those wholesalers with a bigger discount (up to 55 per cent) than we would give the bookshops.
So why not supply the bookshops direct? One reason is that the shops get a bigger discount from the wholesalers if they take a certain number of books per year and of course they do not want to jeopardise that by buying a few books from us.
And the wholesalers have put it about that if we increase our discounts to the shops they will want an even bigger discount to deal with us.
There are other ways to deal with it. One publisher friend of mine had a £25 book that he produced each year, selling about 5,000 each time. He reasoned that by the time he’d given the bookshops/wholesalers and his distributor their discounts he was left with £9.37 per book.
So he took it out of the shops and sold it purely through his own website at full price plus postage. The sales went down from 5,000 to 2,500 but his turnover went up. With his new approach he got £62,500 a year, an increase of more than £15,000.
That was a novel approach and provides one of the many lessons to be learned. Business sectors must think outside the box; they must not be afraid of doing things in different ways. That’s hard in a tradition-bound sector like publishing but it has to be done.
And, of course, there is another lesson. Business sectors must not stand alone and think their problems are unique. Net-working with other businesses is invaluable.
So, if anyone out there in cyber land, feels they can add to the debate I’d be more than willing to receive an e-mail:randall@sportsbooks.ltd.uk
