My good friend and wickedly clever industry observer Ed Champion
has a post on his blog that challenges industry pricing practices.
Ed poses these questions:
Ed: So if you’re a publisher or a bookseller, consider this. If you know that people can afford a $10 hardcover (as opposed to a $30 hardcover), why in the hell aren’t you learning from (the examples he cites in his post.) Why aren’t you offering a Valve-like time window where people can walk into a bookstore and purchase a few $10 hardcovers over a weekend?
JR: $30 hardcovers for sale at $10 are called
remainders. If price is the ONLY consideration in a book choice, there are lots of ways to buy $10 hardcovers. (If you want to buy a specific book at $10 that's a different argument, addressed later.)
ED: And why aren’t you promoting the hell out of this?
JR: Red letter sale signs saying "cheap books" won't draw people into a bookstore selling new books. That's the secondary book market: Goodwill, garage sales, second hand bookstores. If price is the sole consideration, you can buy bag loads of books for $2 most every other month at a variety of secondary book stores ranging from Housing Works here in NYC to most every Friends of the Library sale across America.
ED: Why isn’t there a Free Book Day in which you get to introduce people to the joys of books and you get to know your customers?
JR: That's called the library.
ED: Why aren’t you forming intimate and personal connections with readers so that they’ll continue to buy your products?
JR: Maybe book buyers don't want intimate and personal connections with a bookstore. They want to buy a book they already know about. They want fast and easy service. I offer as
prima facie evidence in support of this position: Amazon.com
I call it the Sock Buyer model (I used to call it the Underwear Model but I couldn't even type the phrase without giggling.) When I need socks, I go to a store that sells socks. I don't want an eager beaver assistant to show me ten or even five kinds of sock. I know what I want. I want to go to a well-marked, easy to locate aisle, get the socks I know I want and wait fewer than 30 seconds in line to pay for them.
Remember, more than half of the people who responded to the question "how do you select what to read" answered "word of mouth." They want the next Lee Child (my god, who doesn't!); the next Laura Lippman (ditto); the next Sophie Littlefield (you will my pretties, you will).
If some bookstore takes it into their head to offer those books to me at less than their cost, well, that's fine with me, but it does NOT change what I
want to buy.
Does it change what I
do buy? Does offering a $10 Laura Lippman introduce new readers to Laura Lippman (a hazard to To Do lists everywhere, let me assure you.)
Answer: yes, but then what.
If you offer a hardcover, frontlist book at less than cost, you may have certainly created a new fan for Laura Lippman, but unless that new fan then buys either all the backlist OR places an order for the next book (which is a YEAR away!) creating a new fan does not translate to creating a new customer for Laura Lippman (And answer me this, when was the last time you saw all the backlist for an author in ANY store. A very very few exceptions to that, but mostly it's frontlist and if you're lucky, two earlier books)
What might work is "buy this hardcover now, and bring the cover/receipt/picture of you donating it to a library in prison" back next year and we'll give you an extra 20% off the new Laura Lippman then."
It also clearly does not lead to sales of OTHER books unless the buyer picks up the $10 book in addition to other purchases. Since you pose these questions with the assumption that people have less money to spend, not more, this is also not something that bookstores can reliably depend on for generating more revenue (or earning back lost revenue) from this $10 sale price.
It's counter productive to do the one thing that requires a further purchase to yield a positive result.
Bookstores aren't in business to support your reading habit. Bookstores are in business to make enough money to stay open, and offer a return on investment to the owner that is better than their opportunity cost. Serving customer needs can accomplish that goal but it does not make sense to serve a customer's desire for cheap reading material at the expense of the bottom line. You forget that Mr. Champion at your peril.
And further:
The idea that booksellers or publishers should offer hardcover books for $10 ignores some basic industry facts.
Booksellers pay publishers a percentage of the cover price: generally near 50%
That means bookstores pay publishers $12.50 for every $25 hardcover they sell.
So, if they charge a consumer $10.00 for that book, they've not only lost money, they've deepened the loss by the amount it costs to sell a book. It wouldn't take more than 100 books out the door at a loss like that to really tip the scales for a small business on a thin margin (i.e. most booksellers I know)
So what about cutting the bookstore a break and invoicing the book at a steeper discount?
Ah here's where the accounting gets overwhelming. Which books get the steeper discount, and for how long? Is it based on when the book is ordered, or when it sells? What if it doesn't sell? Is it returnable as a new book or a remaindered book?
I suggest these not as specific questions to attack Mr. Champion's argument, but simply as an illustration that it's not simply a matter of saying "ok, let's sell these for a bargain rate and hope more customers will buy."
Mr. Champion, in response to your question I paraphrase another bald headed pithy phrase writer: It's the economics, Segundo!