Book Trade – Stock, stock and yet more stock

Working on Together magazine and through my involvement with CLC Wholesale, I see a huge variety of product. In fact, far too much product in my opinion. Publishers and distributors are continuing to push out new titles into a fundamentally changed sales environment and a shrinking physical market. This cannot continue. The economics don’t add up. Internet retail copes poorly with new product as recent debates over ‘Discoverability’ show. In my view, the jury remains undecided on whether the Internet will ever fully replace the ‘lost’ B&M sales from the many, many shops that have closed in recent years.

And yet still the titles keep coming. Suppliers have yet to react intelligently to such a radically changed marketplace. I doubt anyone can continue to keep publishing at current levels into an already saturated market. I fear further fallouts. Mergers could follow. Self-publishing is already making inroads into the traditional model and publishing is feeling the cold draught of reality. I applaud publishing start-ups, like Edinburgh’s Muddy Pearl, that are probably nimble enough to make it, but they too face an uncertain future.

There is way too much mediocre product, much of it destined to remain unread – a major challenge for authors as well as for publishers. Put simply, way too much is being published and a market correction is surely due. Publically quoted Lion Hudson PLC has taken a large stock write-down for two years running; £924,000 in 2013 and £550,000 in 2012 (Source: annual company accounts). Many other publishers have similar challenges providing for high levels of dead or slow-moving stock. Quite whether all are as strong as a PLC to cope financially with such savage action is a moot point. Over the longer term, publishers will profit from the shift to digital as they will benefit significantly from higher sales but with far lower stock management costs.

This summer, we caught a glimpse of what happens when a tectonic shift takes place. The Kingsway–DC Cook distribution upheaval has left a drastically altered landscape, especially for many USA houses. The reality has dawned that the UK no longer has the distribution capacity required to handle the vast amount of Christian product looking for a home. Not all of those suppliers originally with KW/DCC will be racked here again. Some are still looking; others have withdrawn from the UK. Distribution is not for the faint-hearted. It costs. Lots. Especially if you are intent on the deep stocking of all lines listed. Something has to give as the financials are becoming harder and harder to get right. New product is replaced by even newer product in an ongoing frenetic cycle – and then promptly forgotten. Ask yourself, how many of the recent titles you have been shown have ‘made it’ and are still earning their keep? In my view, the only way for retail to survive is to become ever more selective – to the severe frustration of publishers (and authors) who nurse the fervent belief that every one of their titles is both ‘key’ and ‘core’ to your business.

Where does this leave the Christian retailer? Those who survive will be those shops that choose stock wisely, prudently and are selective in the extreme. The game has completely changed.  For publishers to succeed, the key issue is ‘discoverability’ whereas for the retailer the absolute priority is ‘selectivity’. On what are you spending your money? No longer can it be about stocking anything and everything. To do so is impossible given such a huge product range and the relative size of most UK stores; insane given the investment needed in stock that could be here today and gone tomorrow; and unnecessary in a digital world which demands physical retail to be distinctive and unique if it is ever to make it through to the end of this decade.

I contend that selectivity and discoverability really do lie at the heart of this debate. You and I have the power to move the market if we truly believe in a product. The art is finding the book that really moves you to want to handsell it to as many friends, family, colleagues and customers as is humanly possible. When did a title last grab you like that? What was it? How good did it make you feel when it started to move off the shelves? My colleague, Chris Magee did just this with ‘The Circle Maker‘ (Zondervan). Its message touched him deeply, so he sent one copy to many of the retailers that CLC works with – and it remains one of their top sellers. Without such action, many books will sink without trace.

Most of us came into this trade to make a difference to people’s lives. Recommending – suggesting – handselling a title that has absolutely got to you is just the most fulfilling aspect of what we do. Hype and PR have no place in this trade and yet seemingly it’s all around us. Do we truly believe all the claims that we make for much of the product that we promote? Is it not high time we looked again at the ‘how’ and ‘why’ of the sale as well as our need to shift stock? In a few short years, we seem to have gone full-circle. There was a time when our shops were expected to stock in both width and depth. No longer; the new trading reality allows us to be ourselves and stock what we wish to sell, what we believe in and not those titles which have no place in our shops, as their claims are often far too spurious and their content questionable. It’s time for a rethink right across the trade on this matter.

Moving from the negative to the positive, I’d like to highlight a couple of areas that certainly warrant our attention – Children’s books and Bibles. I’ve written previously about the continuing growth in the sale of children’s titles, especially for the younger age group (pre-school and picture books are up 5.5% in five years according to new Nielsen figures). However, the one area that merits serious profile is Bibles. Sales continue to rise year-on-year. The appetite for Bibles seems to grow and grow. The range of styles and colours has never been as wide. Pink Bibles sell! This is the area that we do know about. It’s our specialism and no one can compete with us in our knowledge of the Bible market. Even the reinvigorated Waterstones doesn’t really cover this section that well.

Christian retailers know Bibles better than anyone (or at least I hope we do). Translations, bindings and fonts are what we do. It’s truly a skill to manage a good Bible department – and it pays off. This is the one area on which we must concentrate effort – through high stock investment, in-depth staff training and knowledgeable customer engagement. I’ve always enjoyed selling Bibles; that passion has never gone away. This is the one genre that makes this trade special – very special – distributing the very word of God is not given to everyone but you and I get to do it as part of our day job – wow!

Here are four stand-out Bibles that have impressed me this autumn. This is a personal selection (no publisher was involved in this choice!) but I would be proud to promote and handsell all of these Bibles to any customer (or friend) I might come across!

1. The NLT Wayfinding Bible (Tyndale House)

This is quite superb and is probably my favourite newcomer this year – a very clever use of colour and graphics enabling the reader to find their way through the complexity of the Bible by navigating via three clear ‘routes’. Love it.

2. The NIV Journalling Bible (Hodder Faith)

Of the various covers available, the black cloth hardback is my favourite. Journals sell well in all shops and spiritual journalling is increasingly popular. This Bible has a lot of journalling space. It feels great and is a welcome addition to the range – but I’d use a soft pencil rather than ink when writing in it.

3. The NIV Every Day with Jesus Bible (CWR)

I loved the imaginative marketing campaign on www.onebible.co.uk Check it out. Selwyn Hughes’s hugely popular notes, allied to the Anglicised NIV 2011 text and presented in a chronological one year reading edition make this a ‘must-have’ stock item.

4. The ERV Youth Bible (Authentic)

At last – the text and notes in this perennial youth market best-seller have been completely reworked. It’s good – very good – and for a while at least, the price looks unbeatable. Impressive, and it’s good to add such a fine looking Bible to the shop youth section.

This article was written in late October for Together Magazine (December 2013 to January 2014)

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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!

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’?