RRP RIP

A particularly interesting article appeared on the Bookseller a couple of weeks ago regarding Waterstones, which for various reasons I have only just round to writing about, which to my mind at least serves to highlight the sheer stupidity of the discounting culture so prevalent among book selling today.

The article, which is dated May 17th states that Waterstones have begun selling selected titles online at above the recommended retail price, echoing the spoof predictions made by those wonderful people at the Big Green Bookshop for 2008 (a promotion of 50 percent on was mentioned, I seem to recall) albeit a year late. This is despite the fact that most of these titles can be purchased at lower prices at other retailers such as Borders and Amazon. Many of these items appear to be maps rather than books, which do not have RRP's actually printed on them, and allowing Waterstones to more easily get away with this. The publishers concerned claimed that Waterstones had not informed them of this move.

A spokesperson for Waterstones said "Waterstone's reviews its prices on a regular basis and we aim to offer the best range of titles on the high street, with a huge amount of them discounted or available as part of a promotion at any one time. We have changed the prices on a very limited number of products and are now looking at how customers respond to the changes within the context of wider promotional activity."

An unnamed employee (and several others have since joined in the debate) claimed that Waterstones were actually doing this to protect their profits, in the face of high discounting on faster selling products, and it was and is in fact, a form of price fixing, but that as usual, the consumer would have the final say.

The thing about RRP's is the word recommended - it means just that - a recommended price, which is not set in stone, Waterstones are then at perfect liberty to charge what they want, if the market allows them to. If you think about this for a moment, if they were not allowed to change RRP's then they would not be allowed to discount at all, this was always a good get out for me when customers used to complain about wrong price labels in my old job, although of course when you mentioned this they inevitably did ask for a discount. I then offered the product at the price they thought it should be at rather than the higher price on the actual label, meaning that everyone was a winner - not that they saw it that way ...

If this is in response to high levels of discounting, then it only serves to highlight the sheer stupidity of this system, but perhaps more importantly, it also serves to show both retailers and consumers that there is a dark side to this - that some products will need to be hiked up in order to compensate for this. Does the consumer lose out - no I don't think they do, as they get more products at lower prices than ever before - they are as always free to go elsewhere if they do not wish to pay these higher prices. It may not be convenient to do so, but it is not convenient for authors to have their royalties slashed either by discounting - we just have to put up with it. It will be good news for the independents who may suddenly find themselves in the position of being able to undercut the chains, just for a change.

What goes down, must go up!

I know there is hope for the world, and in particular the book world, when I see comments such as those on the blog of Neil Denny, editor in chief of The Bookseller magazine. On his blog, Neil calls for an end to the practise of high discounting in these times of economic uncertainty, in order to protect the interests of both publishers and book sellers. He points out that the price of books, like anything else, can go up as well as down.

During the last decade, since the abolition of the net book price agreement, we have seen the prices of books plummeting, with both book sellers and publishers, not to mention of course authors, working harder and harder for what seems like less and less. When I did my own accounts yesterday, I was shocked to see that despite all my hard work, my income from book sales for 2007-8 was just over £800, which is not a lot to show at all for all that work. Of course it would have been a lot more had the book not been on sale or return for such high discount, but then again, would I have sold as many books as I did? Somehow I think not, and so in the scheme of things, I am still better off, as although I earn less now per book sale, at least I have the chance to make some sales!

Perhaps though for the book trade as a whole, it is time to have a re-think on the discounting issue and begin to charge cover prices again, or at the very least, reduce the discounts that we have in store to a more reasonable level.

Since 2001, the date at which the sales figures first became truly comprehensive, the average sale price for books in the UK has fallen from £7.81 to £7.57. This may not sound a lot, but by the time you factor in inflation, it is clear that the price of books has fallen way less than it should be. In real terms, prices have dropped by almost 20 percent.

It may seem strange to be discussing this move at a time when consumers are already struggling with higher bills and fuel costs, yet as Neil Denny points out, increases such as these are creating a climate where consumers actually expect prices to go up, across the board.

If other businesses pass on the cost of their higher bills to the consumers, then why should the book trade be any different? Books after all need to be printed and shipped around the country (if not the world) and with the way that oil keeps going up, sooner or later, these costs will have to be passed on.

Companies are under pressure, as staff push for wage increases in order to compensate for higher prices. By increasing their own prices, and thereby their profit, book sellers will be in a better position to give their staff that raise, at the same time injecting life into their business which they can use to invest in training and better facilities all round.

Books are vastly underrated in our western society, and absurdly cheap. In a climate where some paperbacks cost less than a pint of beer, a cup of coffee or a magazine, then what does that say about the value that we place upon them? Customers at the store that I work in think nothing of spending £1000 on certain items, yet baulk at the price of books. I can imagine a world without much of what we sell, but I cannot imagine a world without books. Books educate and make us think, they make us laugh and cry, they take us outside of the ordinary realms of our existence, guiding and inspiring us with their wisdom and their insights. The world would be a much poorer place without them.

Lower discounts would be good news for the industry all round, not least of all the small independents, many of whom are struggling to compete with the chains, and let's not forget, are vital to the success of the book trade as a whole.

While the cover prices of certain types of books have crept up in recent years, the cynic in me says that this is in response to high discounting. If a publisher sells to book stores at 50 percent discount, it is in their interests to set higher cover prices, as 50 percent of £8.99 is a lot more than 50 percent of £5.99.

If books were not so heavily discounted and under valued in the first place, then this would not be necessary. It would be far better to control the level if discounts, keeping this to a sensible level, and allowing new releases at least a few weeks to be sold at full price. It is increasingly common though to discount at launch.

The solution then is not to increase cover prices, but to lower the discounts offered at point of sale. Of course some would say that consumers will just buy online instead. Although online book sales are increasing year on year, the majority are still bought in stores, as nothing can replace the feel and atmosphere of a book store, browsing the shelves. If customers truly want a book, then they will find the means to buy it - we cannot hold back doing what we know is right simply through fear of the competition. Someone somewhere has to make the first move, and personally I will be straight through their doors buying all their stock when they do - as like attracts like, and if I wish to be abundant, then I have to support others. That is the way of the world.

Book sellers working harder for less money

After two days back at work it feels like I need another five days off to recover. It does not take long for the mind chatter to return with a vengeance, try as you might, and working in a shop with loud music constantly on, not to mention two excitable school boys masquerading as grown men, does not exactly help. I have never been able to understand the fascination with much of what we sell, and to me much of it is a total waste of time. I would much rather curl up with good book and a large mug of hot chocolate.

In common with other areas of the retail sector, the book trade today reports that publishers are facing increasingly tight margins, which means that they are selling more books for less money. The price of books has fallen for the fifth year in a row. According to the Publishers Association's Statistics Yearbook 2007, which is out on 23rd April, the average invoiced price (i.e the price paid by book stores rather than consumers) of books fell from £3.59 to £3.50 in 2007. The average price for home market or British books was £3.77, down from £3.85 in 2006, while export titles slid to £3.13 from £3.20. This was largely due to the weak dollar.

Despite these issues, the publishing industry saw overall growth in both volume and value during 2007. UK publishers saw an estimated 9 percent increase in volume, up from 786 million books sold in 2006, to an estimated 855 million books in 2007. The actual invoice value climbed to £3bn from £2.8bn. The export market was particularly strong, despite the weak dollar, with
sales of 357 million units worth approximately £1.1bn. This represents a jump of 14 percent and 11 percent respectively over 2006.

Children's books saw by the far the biggest growth, with unit sales shooting up by 17 percent with a total sales value of 225 million and an invoice value of £404m (£302m in 2006). Fiction saw the next highest growth, up 7 percent in volume and in terms of value 229 million. Academic and professional titles saw the least growth, with a 4 percent rise in unit sales and a 0.7 percent rise in value to £775m.

Returns also seemed to stabilise somewhat, at 9 percent of publishers' total gross unit sales and 13 percent of total gross value. This represents a 3 percent fall and 0.5 percent increase respectively, indicating that the books that are being returned seem to be those of higher value.

In the meantime, and going back to the Amazon debate, one of the world's largest publishers HarperCollins, has stated that they will not be taking on Amazon by selling direct to consumers via their own website. I can't help feeling here that that they are making a big mistake, which will ultimately prove to be rod for their own backs. They will, unlike rivals Bloomsbury and Penguin, be placing Amazon buy buttons direct on their site, so that customers go straight through to Amazon direct.

The reasoning behind this seems to be that Amazon are a global brand, and taking them on would be foolish in the extreme. Personally I beg to differ, as if they don't, as one of our largest publishers, then who will? Someone has to take a stand, and the fact they have chosen not to, signals to me that they are afraid of a fight and do not want to risk losing sales. What they don't realise is that by failing to take a stand now, they stand to lose in the future, an awful lot more.

Cutting off their nose to spite their face

It has been such a busy week one way or another that I have not had the time to write this blog at all. It seems that everyone seems to be wanting a piece of me right now, and as a result there has not been much peace and quiet for me. Much as I enjoy my job (and I have had a very good week with some outstanding sales and a very interesting visit to trade fair on Wednesday) life was so much easier when I did not need to work. It was not so much that I did not need to anyway, for I should have returned a long time before I did, but it was a conscious choice. The choice to continue working four days a week is then as much of a choice as any other, but still it seems in many ways when I earn so little for my writing efforts, that there is no real choice at all.

I am despite this, old enough and wise enough to realise that despite my musings above, that it is a choice like any other, borne from my need to maintain a certain lifestyle, a lifestyle that involves a little more than just paying my bills and keeping a roof over my head. If I was prepared to make certain sacrifices such as not eating out, driving a lot less (difficult when you live four miles from the nearest town and there is only one bus every other hour), not enjoy holidays to Lundy, buy second hand clothes and just sit at home staring at the walls, then maybe I could afford to work three days a week instead, but this for me is not an option, as I believe, quite rightly, that I am entitled to enjoy my life, and recognise that this involves a certain degree of compromise. Unfortunately for me this has resulted in a big pile of books on the living room table, but that is par for the course and no matter how much I whitter on about this it does not change the fact that they are there.

I had hoped that the pile would start to diminish this week, as the local paper were to run a piece about me in this weeks issue, but it did not materialise. I am not too worried about this though, as I am sure it will be in this weeks one instead. After all, they did go to the trouble of sending a photographer to my home to record the evidence, and they would not have done this unless they were going to use those pictures. The reporter with whom I have been conversing rang Coran at home on Thursday after failing to get hold of me at work. He has decided that he needs to get Gardners side of the story before he goes ahead with the story and get some more background info from my website, which I suppose is fair enough. Rather than talk to Gardners direct though (I wouldn't have a clue who he needs to talk to anyway, seeing as they won't talk to me) I have referred him to Richard. If he hasn't already done so, then I expect he will give him a call next week. I buy the Advertiser every week anyway, as I need to keep in touch with what is going on in my capacity as editor of my village newsletter, so I will see it as soon as it goes in and send a copy to Richard and Paul in due course.

In the meantime my copy of the Booksellers Association Members Directory has arrived, and I have made a start by emailing at least some of their members. I tried to call some of them this morning to follow up, but most of them do not open until 10am on Saturdays. I did though get through to Wesley Owen in Aberdeen, who agreed to buy two books direct from me on a firm sale basis. It is only two copies, but it is a start, and it shows that if one branch is prepared to do this, then perhaps others would too. This is quite exciting for me, as Wesley Owen are one of the largest Christian book chains in the country, with several branches in nearby towns that I could deliver direct to perhaps, saving the cost of transportation.

I also sent a review copy out to Kindred Spirit magazine earlier in the week, to which I have subscribed now for a number of years. This is the leading new age magazine with a huge circulation, and so could do great things for me. They have only recently started to do book reviews again after a long hiatus, and a least of a quarter of those they have published have been of self published books, so I should be in with a very good chance, although it may mean waiting for a few months, since they have a bit of a backlog.

In the book world the debate re firm sale continues to rumble on. Waterstones have now decided that when their distribution warehouse opens at the end of May they will ask publishers for an extra 5 percent discount. This is not too bad actually, since they will be saving money by not having to go through wholesalers. The publishers will then end up better off, as going through a wholesaler means that they will have to sell at 55 percent discount, but Waterstones will buy direct for just 45 percent discount. I could at a push afford to supply them direct on those terms if I could buy books all the time for print cost plus 1o percent instead of the usual 25 percent.

Both Borders and Waterstones are also preparing to start selling e-books, in Borders case via their new website (must check to see if those guidelines re getting stocked by them are on the new site), and Waterstones from July in stores. The Bookseller states that Sony are preparing to launch e-readers onto the UK market sometime during 2o08, yet there were none in evidence at their trade show on Wednesday, and when I asked about them, the staff there knew nothing about it at all.

Borders I see are also changing strategy regarding how books are displayed in their stores, following the example of their American cousins, and displaying them face on rather than just showing the spines. This is a risky strategy for them to take since it will mean that less books will fit on their shelves, but I suppose if it helps to increase sales, as they seem to think it will, then it could pay dividends for both the retailer and author alike.

Julian Rivers, who was a founding director and deputy c.e.o. of the Bertram Group and now runs his own consultancy, as well as being chairman of Waterside Books and director of Meet The Author, has an interesting article re fair trade on his blog site, linked to The Bookseller, where he bemoans the abolition of the net book price agreement and what this has meant to libraries. I find this interesting at a time when I too have been writing about fair trade practises, albeit for a different purpose. It shows me though that I am not the only one to have such thoughts on my mind.

Graeme Neil reports that for the first time last year, the volume of books bought at a discount was greater than the volume bought at full price. The practise of discounting has steadily increased since 2004, when it represented 44 percent of book purchases. In 2007 the volume of discounted titles reached 51 percent of the market.

According to the survey, conducted by BML, consumers aged 12-79 years bought 6 percent more books in 2007 than the previous year, up from 322 million to 342 million. The value also increased but at a lower rate, up 4 percent to £2.454 billion. This is then both good and bad news.

The growth in consumer book purchases between 2006 and 2007 seems to have been driven mainly by supermarkets and the Internet, with both volume and value of sales in both sectors doubling since 2004. Internet sales topped £400 million last year, accounting for 17 percent of consumer spending, up from just 9 percent in 2004.

A third of book purchases still go through chain stores such as the aforementioned Borders and Waterstones, but while volume through these stores has grown year-on-year by 1%, the actual value fell by 1%. The chains however still have far greater buying power than the supermarkets and the Internet combined.

Sales of adult books grew 13 percent in volume in the years 2004-2007, with sales of children's books increasing by 18 percent in volume and 29 percent in value over the same period (perhaps I will become a children's writer then). The lower growth in value compared with volume reflects the decrease in average selling price paid by consumers, and shows to me just how much this agressive attitude impacts on the industry. It seems to me that they are cutting off their noses to spite their face in an effort to be what they think is competitive. During that same four year period, the survey found that average book prices paid for adult books fell by 5 percent with a 3 percent decrease in 2007 alone. One cannot help but wonder where this will all end.