Robot 6

Borders crash sends bookstore sales flying

You don’t often get to do an experiment across the entire population of the U.S., but the Borders bankruptcy offered just that opportunity earlier this year. ICv2 notes that bookstore sales, which have been declining for years, rose 7% in the first half of 2011. Why the sharp turnaround? ICv2 attributes it to the Borders bankruptcy and the subsequent liquidation sales.

This was reflected in the September Bookscan top 20 graphic novel list, which included some older graphic novels, including Lucky in Love from Fantagraphics and the Seven Seas manga Dance in the Vampire Bund, that probably got a boost from those last-minute markdowns.

What I take away from this is that books are too expensive. E-books and online sites like Amazon have been eating away at bookstore sales for years, but apparently you can increase sales of print books in brick-and-mortar stores simply by decreasing the prices. Perhaps this is an oversimplified view of the situation, but I honestly can’t think of any other reason why the trend would turn around like that. (OK, there is one: The prospect of scarcity. People who are losing their only local bookstore might be tempted to stock up, but that would only be true in a few areas.)

From everything I’m seeing, sales of e-books continued to climb during that period, which suggests a tantalizing possibility: The market as a whole, print and digital, online and brick-and-mortar, could continue to increase, if only books were cheaper. Publishers set prices based on the cost of production and the profit they want to make, but readers have their own price points—I know I do—and apparently the two don’t match very well.

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6 Comments

Amen.

My idea of what a paperback novel or what a collected comic ought to cost and what it actually does are sometimes oceans apart. Thank goodness for the Toronto Public Library System.

I really have to agree. Those final weeks at my local Borders store were simply insane. Books that had been sitting on the shelf for over a year vanished immediately as soon as they were marked down a few bucks…

Except that, much of the time, ebooks cost the same amount as their ink-and-pulp counterparts. It’s tough to cite price as the reason for increased ebook sales when they don’t actually cost any less.

I think you’ve got the right idea with the price comparison, and even the right vendor, but it’s not ebooks that are cheaper than physical books, it’s Amazon that’s cheaper than brick-and-mortar shops.

For my part, the bankruptcy of Borders has gotten me to spend more time (and, yes, money) shopping at my local independent bookstore (and, to a lesser extent, brick-and-mortar chains like Bookman’s and B&N) and trying to avoid being seduced by Amazon’s price and convenience. But I doubt the number of people with that reaction makes a significant difference — more’s the pity.

Border’s liquidation sales appealed to the greed in everyone. The discounts weren’t that much at first, but there were mobs of people onhand (for 10-15% off). The illusion of a bargain mattered more than the bargain itself.

Why? Word of mouth and TV news coverage. Borders *didn’t advertise*. So in the end they got sales commensurate with an ad campaign.

One of the reasosn books costs as much as they do is that publishers need to factor in the cost of anticipated returns. Returnability iin the book market is unlike anything else in the retail sector. Every single book you see in a bookstore is returnable to the publisher for full credit, which separates the core product of those stores from the bookmarks and other ancillary products sold in those venues.

The big box stores developed a nasty habit of ordering backlist books, returning the unsold quantities at the end of their billing cycle only to reorder the same books back into their inventory at the start of the next cycle. This costs publishers money in regards to lost inventory and processing fees.

In addition as bookstores started becoming cafes where people were reading books or magazines will drinking coffee ( basically becoming libraries with coffee shops) the amount of books being sent back to publishers for credit went up. I as a publisher do not make any money from the coffee and pastries sold by bookstores and my distributors willingness to take returns of shopworn books which cannot be sold costs me money and inventory and stretches the notion of returnability.

So the price a publisher charges for books is going to factor in the cost of returns and the costs associated with the supply chain.

And I agree, ebooks are too expensive, but I think they are being kept artifically high as a result of pressure from the book market which does not want to see further erosion of its sales and to a certain degree authors who feel like their roylaties might be impacted by a low cost item which will eat into physical books sales.

I think once the industry accepts the ebook as a substitue for the mass market paperback instead of a hard cover thenyou will see prices drop.

The one area digital cannot compete is in the rare book area. Although you can get cheaper digital versions of many of the previously unseen rarer book these days, (and this I am sure will continue to grow), the reality is there will always be a place for this type of book. There are those who still want the real deal on their shelf, not a screen.

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