http://www.nytimes.com/2009/10/17/books/17price.html?_r=1&scp=3&sq=wal-mart&st=cse
That's the link to a good story about the 'Great Price War' that has erupted between several massive corporations. Nothing new in that. Remember when there used to be a gas station on all corners of an intersection and one would drop the price a penny and all would rush out to beat it? Same thing. The corporations who are gutting any profit out of the bestsellers they sell are not looking to make money on the books; they're doing their best to lure you into their mega-store to buy that copy of the new Grisham or Patterson and they hope and assume that you'll buy a few other things at full price while you're there. That's what is called a 'loss leader'. They are not trying to make money on the deeply discounted item. They are trying to fill the warehouse with shoppers. They don't give a damn about books. They're not booksellers. This time, however, it isn't about gas or bags of fertilizer or laptops or cute skirts for junior high girls. This time the lure is a book.
So what does it all mean? It means that we, small independent booksellers, should not be buying the bestsellers from the publisher, but from Target or Walmart or Sears. Not Amazon – yesh, never Amazon. (And, you have to wonder – how long before B&N and Costco and Sam’s get into this throat-cutting price war?)
It means, really, that we should stop stocking and trying to sell these author and titles.
It means that the bestseller lists will continue to be filled with the same names as they always are.
It means that publishers will have less interest in 'smaller' books, books that are not the mega-sellers that will get into the corporate warehouse bookstores. Nearly all the major publishers are subsidiaries of massive corporations. We already see the major publishers cutting back on who they publish. These kinds of price wars will reinforce the view that the Big Bestseller is the way to make sales and money for the publishers and their corporate bosses.
It means that you may have fewer choices of books and authors. The corporate mega-chains are not interested in providing a wide range of books and authors. They're interested in what sells, sells fast and sells in big numbers. That is not really a criticism. That is what they do. That is their business model. If you buy your books at Target or Walmart, you're not going there for selection. You're going there because of the price or because you have no other options. A huge section of the American population has only the national chains to go to for books.
It means that the high price of books will only increase because the hulking chains will discount them anyway. I wrote a few weeks ago about the strange economics of the new Dan Brown. It is a book that has the retail price on the flyleaf of $29.95. While that seems like highway robbery to most of us, in reality it is just a bit over what is becoming the new 'norm' for new hardcovers: the new Cornwell is $27.95, the new Connelly is $27.99, and the new Ellroy is $28.95 (at least it is a hefty book). The new Jonathan Kellerman is $28 (and the mass market comes out in only 4 months!) The last Grisham hardcover, Innocent Man, was $28.95. His last five hardcover novels have all been $27.95. These exaggerated prices have become, over the years, the norm. A hardcover under $25 is the rarity now.
These books are priced to be discounted. When the corporate mega-warehouses offer all New York Times Bestselling List books at 10% or 20% off, there is just a small step to 60%, really. Whatever the discount, it amounts to the same thing: an offered discount is a way to get you in the door. Any discount is a loss leader and only the chains can afford to offer them because they have the power and resources of the corporation behind it all. And that is why small independents can't compete with those discounts - we don't have the deep financial pockets of a corporation. We'd go out of business if we did discount.
So the question for all of us is where do we spend our money and who are we going to support? While I am heartened and happy that we have wonderful customers who will support us by getting their bestseller from us, I can't really blame them if they go buy the new Grisham from an outfit that will sell it for much less than the publisher is charging me. If that means that their book budget allows them to have money to spend here, how can I complain? The nagging question is, is that really how it works?
What is the alternative if you don't want to buy from a corporate chain and get that dirt-cheap book but you can't afford to pay full price here? Put your name on the wait list at the library. Or just don't read that book or that author.
But, in the end, the real discussion needs to not be about discounts, but the high price of books themselves. At some point, publishers are going to have to come to grips with the fact that they're pricing the 'mass market' out of their products. When the market can't afford your wares, and you have to discount them to get them to sell, there is something fundamentally wrong with your pricing structure.
And at the very bottom of the issue is this: we live in an economy built on consumption but the price being assigned to entertainment is becoming too high for the mass audience that the system relies on to support it. The mass audience doesn't have as much disposable income anymore. Doesn't matter if it is the price of a hardcover, or a ticket to a baseball game or a movie or a rock concert - if the price exceeds what the mass audience can afford, the system will screech to a halt.
As it is constantly reported, more and more of the money in our economic system is concentrated in fewer and fewer people. If the 'mass market' has less and less disposable income, the high price of books means fewer titles will sell, more people wait to rent their movies and to watch them at home and more people will watch sports on TV and more. A fabulously wealthy Wall Street banker or a fabulously wealthy movie studio executive will probably only buy a new bestseller once. Either everyone needs to become fabulously wealthy for the mass consumption to continue, or prices have to come down. Since everyone is not becoming fabulously wealthy, we're all left with chain-mega-warehouse-superstores - which just concentrates the wealth further.
What a vicious and ridiculous circle.
We can’t survive – as a business or as a country – on 100 millionaires each buying one copy of the new Dan Brown. We need those millions dispersed, with 133,000 people making up to $77,000 a year buying the new Ellroy, the new Hallinan, the new Elkins, the new Daheim or the new Karp, to buy a stack of paperbacks and a ticket to a ballgame and new paint for the living room and to go out to eat now and then, and then other small businesses will need to hire more people to serve all the new customers and that is how we dig ourselves out of this economic pit.
It makes no sense to continue to raise the prices of your products during a period of deep economic hardship for the greatest number of people, yet book prices continue to escalate. Wouldn’t it be more rational for the manufacturer to lower the prices on the widest range of their own products – in this case, books – instead of relying on a different corporation to lower the prices on a tiny selection of those same products? Wouldn’t it be better to sell more copies of a lot of titles rather than a ton of copies of a handful of titles?
However, as we say around here, if you want sanity, don’t look at the book business…
- JB