Home > Book trade > Book Trade – Reflections on the UK specialist wholesaling model

Book Trade – Reflections on the UK specialist wholesaling model

TMD’s announcement this week of its imminent withdrawal from wholesaling for UK publishers came as no surprise. The surprise to me is that it’s been able to carry on as long as it has.

Even at the height of STL Distribution’s involvement with wholesaling, it was incredibly cash, stock and shelf-space intensive. The breakthrough for STL in those early days came when it moved into trade distribution (starting with Kingsway) and began to develop its own extensive retail infrastructure. Without those two elements, in my view STL may not have survived beyond the 1990’s.

In the late 19980’s, STL tried to emulate the likes of Gardners and Hammicks. Now the competition is even fiercer with Amazon taking on a quasi-wholesale supply role within the book trade. It seems crazy that it makes sense for shops to buy from Amazon and receive better terms than from publishers!

The retail sector has to take its own share of responsibility for the difficulties experienced by suppliers in recent years. Too often shops use their distributors as bankers – by not sticking to agreed payment terms and by often paying late. This has had a rolling, detrimental and destabilising effect across the whole trade putting a lot of pressure on companies’ cash flow.

For TMD to concentrate on its American lists makes a lot of financial sense. These are usually high margin transactions, with stock often placed on consignment and a much healthier impact on cash management.  USA Publishers can afford to throw greater margin and to slightly increase their already high print runs for sale to the UK market. One negative effect may be to further accentuate the already disproportionate USA / UK title balance on display within UK bookshops. 

The ‘Elephant in the Room’ behind the TMD decision is the hugely shrinking pool of retail outlets for suppliers to sell into. The UK market has lost a very large number of shops in a relatively short period of time. There is simply much less shelf space to go around. There is just not as much business to be had. Everyone involved is ‘competing’ for less space on shelves and seemingly for fewer customers. TMD do not own their own outlets as STL did and so the vertical integration model does not work for them.

I’ve said elsewhere that I wish CLC Wholesale well. However, I remain unconvinced that they can pick up the slack due to two reasons; (1) their remuneration policy which mitigates against being able to attract enough competent and professional staff (no slight whatsoever intended to existing CLC’ers, all of whom do an amazing job in often difficult circumstances) and (2) the need to significantly widen their stock holding policy at the wholesale warehouse level. If these points are courageously and urgently addressed, then the chance still exists for CLC to fill the current vacuum and grow their own market share considerably.

This is now such a seriously changed landscape; one in which specialist Christian trade wholesaling may possibly have had its day.  Like so often in life, we’ve gone full circle from a viable wholesale model – brilliantly pioneered for this market by the likes of Raymond Stanbury, Daan van Belzen and Keith Danby– to again buying direct from Publishers with all of the built-in inefficiencies and additional costs.  C’est la vie!

  1. October 29, 2011 at 11:43 am

    Lucid and clear as ever Eddie; is the other elephant in the room the question of what processes within the industry’s (any industries’ for that matter) management culture and mindset that enables the ‘community’ to come to terms with these sorts of paradigm shifts? The ‘writing was on the wall’ for sometime with the rise of Amazon and more significantly the changing complex spiritual culture and church scene but the Boards of these organisations and the trade struggled to engage these high level (socially and culturally) shifts outside of the industry. Where are the processes now that foster discursive discussion about the new nature of change? I don’t think the Christian trade’s culture is a rare example of conservative management thinking that prefers a rational, conservative, unquestioning and often acquiescent Board membership, it is deeply embedded within the UK’s management class (see Lord Sandy Leitch’s Review 2004 and dare I say look at our current government!). Are there parallel processes within Boards now that are orientated towards subtle and complex change?

  2. Iago
    October 29, 2011 at 12:46 pm

    The UK Christian book trade is such a small “niche within a niche” business sector, which encompasses a highly diverse theological, supplier and retail constituency, that there aren’t enough like-minded members for it to behave as a community, rather it acts as several tribes, which compete and co-operate as best fits their needs of the moment.

    The changes in the economy, technology and culture (both church and general) will result in increasing levels and types of competition within the supply chain, and will fracture the market further, allowing external secular players to increase their quiet dominance. The remaining Christian outposts will be fewer, run by highly motivated, locally focussed people, who will carve out their niche but will struggle to expand, or ensure longevity past their current owners.

    I don’t see anyone being able to draw this community together, rather the future will be based on individual creativity, diversification and localism.

    • October 29, 2011 at 7:47 pm

      The person who can draw this undeniably fractured community (which largely mirrors the church it serves) together is, of course, God; and where we’re being brought together is here in the socialmediasphere: in blogs, on facebook, on twitter.

      Yes, we’ll always have our differences, different theological emphases, different spiritualities; but by God’s grace, we share a common mission, to bring people to Jesus. And it’s in that spirit that our individual creativity can be shaped by God in a way that enables the trade, if it is of God, to survive whilst still embracing that diversification and localism needed for it to thrive.

      Several tribes? Maybe so; but we serve a God who has historically worked through multiple tribes: consider Israel, wrestling with God. And God’s future belongs to those who are prepared to wrestle with it rather than with one another…

      • Iago
        October 31, 2011 at 5:58 pm

        Agreed, the possibility of a collective will that leads to action can exist, the existing social media helps facilitate that, and tribes can become communities.

        The point was that they are unfulfilled possibilities at present, with neither a broad human or spiritual change, the OP is right that the landscape has changed, the successful business models of the future won’t be the ones of the recent past, and as bloggulentgreytripe says there is no industry discussion or process on change, as there is no will from those higher up the power chain to facilitate it, which is why the responses are likely to be local and individualistic rather than community led.

      • November 21, 2011 at 12:26 pm

        Interesting to consider that Gen X’s at times visceral resistance to social media often means their type of debate is heavily rationalised. Whereas Gen Y just gets on with it unabashed; or what the unsurpassed Christian thinker Kierkegaard calls “let[ting] my thoughts appear with the umbilical cord of their first mood…” http://www.amazon.co.uk/Journals-Kierkegaard-1834-1854-Alexander-Dru/dp/B0000CK4UM/ref=sr_1_1?ie=UTF8&qid=1321877594&sr=8-1 Page 56. Kierkegaard’s life appeal appeared to be was largely about freeing ‘us’ from the strictures of ‘the institutional controls’ on expression, certainly within ‘solid church’.

  3. mike levy
    October 31, 2011 at 8:50 am

    Hi Eddie

    not a bad article but i think you will find there are more positives at CLC than you may be aware of

    To cover your first point on remuneration – you will now find that all the prev w/o stores continue to be run with paid staff, there are also a small number of paid employees scattered in other clc stores and throughout the organisation.

    On point 2 you will find a greater stock-holding on a number of titles, also the ability for some stores to already go online and see live stock levels and a lot more innovative schemes in hand

    I hope this puts the them in a more positive light

    Mike Levy

    • October 31, 2011 at 9:28 am

      Thanks for this Mike – I do accept your point. My sense is, however, that more will need to be done in both pay and stock policy if greater opportunities are to be seized. I have the greatest of respect for CLC so don’t interpret my comments as an attack – they are not, simply a desire to see them prosper even more in these rather uncertain times.

  1. October 29, 2011 at 11:49 am

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