Home > Book trade > Book Trade – Pricing policy, discounts and the deepening sense of unease

Book Trade – Pricing policy, discounts and the deepening sense of unease

I completely understand the current strength of feeling across the Christian retail trade regarding the perceived inequity of Kingsway offering allegedly differing terms to its varying distribution channels.

I admit to feeling uneasy earlier this week with their seeming triumphalism, displayed in the social media, as the new Worship Central album began to sell strongly through the newer channels, then the announcement of its availability through branches of HMV and the unspoken sense that a better job was now being done than by just having to rely on their traditional Christian retail outlets.

The concerns centre around HMV, Amazon and iTunes apparently receiving better margins in order to reach a ‘broader’ market. I have to say that whilst Kingsway are high profile in this and have an aptitude for drawing ‘flack’ fairly regularly, they are not alone in so doing. Doing business with the big secular players is costly, frustrating and was often seen by suppliers simply as an add-on to the traditional market – nice to have if you can get it but not the end of the world if you can’t. 

However, that view is rapidly changing as the realities of market share begin to bite. For Christian suppliers, the old retail chain model is ‘holed below the water line’, Indy’s are flat-lining and any growth is elsewhere, not in retail. The truth is, that for most suppliers, our niche retail trade no longer provides the geographic coverage required to get a new product to market. Shops are dwindling and with them, a suppliers ability to reach its market and, more importantly, to sell enough of its initial print-run (in the case of publishers). No wonder suppliers are casting around looking for new, more viable alternatives. I say this, not to excuse such behaviour but to try to help to explain it. Sadly, these are now the rules of the marketplace. It may seem unfair to a small well-run Christian outlet but this is how it is in the real world. It’s not just our trade that affected – it’s happening right across UK retail.

One of our issues is that the retail book world still lives with the ghost of the Net Book Agreement. Yes, it’s long gone but some of us still operate (and think) as though it remains in force. I believe strongly that pricing should be left to retailers and that prices will always remain fluid. In order to compete on the basis of price, then retailers do need to have adequate margin in their armoury. Some suppliers are better than others in this respect. I’m led to believe that IVP and Lion Publishing remain the retailers’ favourites and sadly, it seems, Kingsway continues to draw their indignation!

My experience of dealing with Amazon as a supplier is that they have their own very strict pricing policies which it’s impossible for suppliers to influence – plus they take a far lower margin on a sale in order to attract the customer. It’s very much ‘take it or leave it’ but it would be a brave supplier who opted not to deal with them due to the volumes they are capable of generating. None of us may like this but that’s the truth of it. The same goes for music digital downloads over physical product sales – and who knows where eBooks are heading?

 If suppliers are guilty of anything, it’s that they can sometimes seem to take their small retail customers for granted and to put all of their energies into building relationships with new outlets – often secular, mostly larger. They assume the Christian shops will always be there or worse, they assume that most of these shops are on the way out anyway! Recent history has not helped this particular impression! Either attitude is damaging in these difficult economic times.

This issue is a major point of deep contention for both suppliers and retailers. Our brave new digital world is not helping. Everyone in the supply chain is feeling squeezed; small retailers feel unappreciated and powerless in the face of such huge change, suppliers are fighting for volume as they see their product runs ever diminishing and all of us are seeing the rampant switch to digital from print. Is it any wonder we can seem worried and anxious; emotions which are then expressed in a form of protectionism.

Of course, you could argue that we should neither be worried or anxious; indeed we are so commanded in the New Testament. However, reality is often a little different and invades our thinking in more negative ways particularly when it comes down to matters of money and business. Would that it did not – but it does and we need to recognise this fact more than perhaps we do. When suppliers have large payrolls and report to even larger owners, it takes a special kind of courage to manage these often huge and contradictory tensions in trying to make ends meet in the present climate.  

I do understand what’s going on because I’ve been on both sides of the argument. Still am. Neither side is fully right, neither side seems comfortable with the other and both feel misunderstood by the other. Not a great place to start when certain emotive ‘triggers’ occur and begin to inflame the understandable indignation. Somehow we have to deal with this or we will be torn apart by it. Our trade, made up as it is of several parties with a common goal of mission – but with very different economic drivers – could so easily degenerate into hostile and divided camps. Some would say these camps are already antagonistic to each other – I pray not.

If we truly believe we are about the Father’s business we should all do better – for the sake of the Kingdom.

Mark 8: ‘What shall it profit a man if he gains the whole world but loses his own soul’?

Advertisements
  1. September 28, 2011 at 9:01 pm

    Eddie, as always a great and unbiased insightful piece, thank you.

    As one of the seemingly guilty parties can i just say that I want to work with my publishing/producing collegues actively and inclusively where I really can and have no problem with them selling to the big names.

    I am genuinely happy for any christian product to reach as far and wide as it can but would like it if the terms could be a little fairer where possible to ensure that we all prosper – I do believe this is possible because there are companies/groups/publishers/producers/bookshops out there doing it!

    I do concede that back on the 20th July (so well over a month ago now) I told my Kingsway rep (and a few weeks later my Join the Dots rep) that I would no longer be buying much if any of their media product due to the pricing issues srrounding it and the fact that I just can’t match the mighty ones on the terms they give but my customers really do expect me to be able to.
    It’s not a new conversation, I’ve had it repeatedly with my reps in various ways, I’ve had it with some of the top bods in the companies, I’ve raised it in private and then in public repeatedly and this is just a higher profile case of that same discussion I raised with them and the reasons why I’ve had to make that decision.

    I did discuss partnership options with my Kingsway rep but outlined the reasons why it won’t work for me (and these same reasons hold for some other partnership type schemes too). Though they may give marginally better terms at best it also means carrying a much higher stock level for which I am expected to pay on majoratively standard terms and so great though it may be for their cash flow and profile, for me it’s a killer to my cashflow and it clogs my selling space with very little viable return sadly.

    I have, do and will frequently offer to accept fully firm sale on my purchases – but I am demanding and I want a decent margin for that and yes, no ‘you must buy 3 to get it’ terms, as this potentially wipes out any benefit of higher margins achieved and leaves us back where we started. The only items I willingly accept this on tend to be remaindered product due to the price reduction in the first place, but even then I am picky and will try to negotiate 😉

    Surely this should be possible as it works to the best for both sides of the industry, indeed some companies like O Books have seen the light and do offer these terms and I thank and applaud them greatly for it.
    Indeed the same with BRF and others who now offer their promotions on two levels, the higher discount firm sale line, and the lower discount but you can return it option.
    I like this but admit i sometimes take the third option because of quantities, stock make up and terms and that’s the no thanks I won’t take it at all option 😉

    In this instance I think it is the attitude and the unthinking impact of it that caused the real problem and furore, and I willingly accept we can all be a little unthinking in our excitement.
    The mail out, to from what I can gather seems to be pretty much all the Kingsway databases, telling everyone it can be got at HMV for less than what is standard terms, or even really viable under their extra terms & way below their suggested and totally notional rrp is what did it I think.

    It’s the lack of inclusion that does the real damage.
    I raised a similair issue on facebook last week with Jonny G at Alban when they posted a promotion that bookshops hadn’t been included in or mentioned.
    I’ll raise the same issue with anyone that does it – include us and at the very least mention us, don’t just sideline us!
    Sometimes all it really takes to smooth the waters is a simple thing like communication and active inclusion – no one wants to be left on the outside or feel overlooked.

    I really think we do need to get together as a trade of many sides and discuss openly, honestly and frankly what we really need to succeed, what the realities on both sides really are and how we can work together to achieve this – this is a time of great change but it doesn’t have to be a time of disintegration and fragmentation really.

    So Eddie, that’s me, here, hoping and thanks for your post, as ever you cut through to the keen points and open eyes.

  2. Ian
    September 29, 2011 at 6:46 am

    Thanks Eddie. A very helpful article.

    As someone now working on a number of start-up projects the Christian retail trade seems like an awful lot of effort for little return compared to what could be achieved through Amazon, Apple etc. However, for an existing company achieving the balance between support a declining but loyal retail sector whilst preparing for and working with new channels is a delicate balance, and not an easy one.

  3. September 29, 2011 at 8:30 am

    Thanks from me too, Eddie. It’s interesting for me these days, standing as I do on the outside looking in: my only direct involvement is as a customer, whether that’s buying from a bookshop whenever I happen to come across one (there are no bookshops in this part of Bedfordshire, not even a WHS; but there is a large branch of the bizarrely acclaimed ‘Bookseller of the Year’, Sainsbury’s, which stocks a limited selection of bestsellers somewhere at the back in a hidden corner of the ‘GM’ General Merchandise section) or buying from one of big onliners – Amazon, usually *gasp: shock, horror*…

    … oh yes, I also run UKCBD, of course, which means I’m at the frontline seeing Christian retailers rising and falling like ninepins; and having been there as a retailer myself who faced redundancy proceedings just over a year ago, I know exactly how it feels for these guys when big shooters like Kingsway seem to ride roughshod over their one-time partners without whom, of course, they’d have never have made it big in the first place… *sigh*

    Thing is, when these businesses go to the wall, it’s not just a business that’s lost: it’s people whose lives and livelihoods are wrecked; and fantastic as it is to see a Christian album make it into the charts and the mainstream outlets, is it really worth what it costs in those terms?

    So whether or not people want to hide behind a cloak of anonymity and take pot-shots about me “whinging”, I’ll carry on as I have been doing, highlighting situations where I perceive injustice and shouting out on behalf of my former colleagues … kinda like Jeremiah, I guess: now there’s a classic whinger!! How can I remain silent when there’s a fire in my bones?

  4. September 29, 2011 at 11:19 am

    Ahh Ian,
    and where would it all be if we all had only ever took the easiest road to market! 😉

  5. September 29, 2011 at 12:48 pm

    Mark Clifford writes (cross-posted from Facebook); Eddie, that is a quite fascinating piece of analysis. While I passionately believe that well-run independent Christian bookshops are critical to the mission of the local church because of their position as a high street witness and resource centre( or should be!), we retailers are having to adapt to a very fast-changing situation. In that context, I do not believe that publishers and suppliers in general are doing enough to support us – it is often a case of ‘you bookshops buy all our new titles and get on with selling them, but we’re expecting you to take all the risk. We’re not going to offer you any promotional material, not going to give you advance copies to read and enthuse your staff, and going to make returning stock as difficult as possible.’ One example for me recently has been a Kingsway music promotion which arrived without any promotional material because it was apparently ‘out of stock’. It still hasn’t turned up, yet Kingsway are demanding payment for product where they’ve failed to support me. I don’t wish to single them out – there are other similar stories from other suppliers – and some publishers and suppliers clearly do recognise the importance of high street bookshops – but more needs to be done if we’re in this together and if we’re going to work together to further Christian mission in this country.

  6. Ian
    October 2, 2011 at 7:20 am

    Melanie. When working on limited overheads and trying to get established, I am afraid the easiest route to market is the right one to take. I am here to get content to as many people as possible, as cheaply as possible. Other ways to market need to follow.

  1. September 29, 2011 at 8:40 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: