Sunday, August 05, 2007

Harry Potter's Last Roundup

It's time for one last recap on how the last Harry Potter book impacted the bottom line of the various segments of the book selling world. Today's Houston Chronicle has an article that summarizes the results for Houston booksellers, and I suspect that their reaction is similar to that of booksellers around the world.


To discount, or not to discount? And did any bookseller make a profit on the hottest book of the year?

You could buy the book for $17.99 from amazon.com, and less than $20 at stores all over town. Independent bookstores offered small discounts or none at all, so maybe the question is, why did anyone pay full price?

Consider the screwy economics of publishing, where selling 150 books might be more profitable than selling millions. And where personal service occasionally trumps price.

"The retail book business is sort of unusual," explains Dan Neale of Brazos Bookstore. "If a book becomes real popular, the major retailers cut the price."

Brazos Bookstore, like many other independents, did not discount Deathly Hallows, charging the list price of $34.99.

...
Unlike most retail goods, books have a finite upper price — the price printed on the cover — but no minimum. Deals vary, but retailers generally pay 50 percent or more of list price to get the book from publishers; they also pay shipping charges.

With free shipping and a $5 gift coupon, Amazon offered Deathly Hallows at less than the wholesale price paid by most retailers. (Barnes & Noble and Borders discounted 40 percent, offering it for $20.99; people with store memberships paid as little as $18.89.)

"Amazon was selling the book cheaper than we could buy it," Neale says. "I guess they chose to do that in the hope that folks will maybe buy something else. But we're not in the refrigerator business or the wide-screen TV business. We're in the book business."
...
Executives at both companies (Amazon and Barnes & Noble) admitted even before the book's release that the big sales numbers would not translate into profits. Instead, the pricing was a competitive ploy and, in the case of Amazon, a chance to prove it could deliver when it promised — midafternoon July 21, within about 15 hours of the official midnight release.
...
But even stores that charged full price may not have made much money after producing the Harry Potter parties customers had come to expect.

All booksellers hope to capitalize on what Tina Jordan, vice president of the Association of American Publishers, calls "the trickle effect. They come in to buy Harry Potter, but they buy Harry Potter plus one, or Harry Potter plus two."

That's real, Jordan says, although whether it can offset steep discounts isn't clear.
...
Murder by the Book touts the breadth of its inventory and the knowledge of its staff, rather than price, and Thompson directs his ire not at discounts but at online sales.

"People go into Kroger, and if they can get it for 50 percent less while they buy their toothpaste and their lettuce, I say, 'More power to them,' " he says. "But if people buy from Amazon, that takes money out of Houston and sends it to Seattle. The state misses out on money (through sales taxes) for education, roads, prisons."
That's pretty much what I expected to hear from the various segments of book retailing. It was next to impossible for any of them to make much money off of Harry Potter but they could not afford, either, to just ignore the release of book seven. The big guys, Amazon, Barnes & Noble and Borders, all evidently took losses on the big party night, and the little independents were very lucky to make a few bucks. Despite what any of them might say about the effects of Harry Potter on reading trends for children and on future books sales, I suspect that deep down inside they are all quite relieved that Harry Potter is finally gone for good.

4 comments:

  1. So glad it's over... if only it was over. Now we're stuck with sooo many of these books. About 1/3 of pre-orders were never picked up (people found them cheaper elsewhere or pre-ordered from several different places, "just in case") and then we have boxes and boxes of additional copies that are NOT selling. We only had that 40% off discount the first weekend; now it's 30% off and people can buy the book elsewhere for a significantly lower cost than even our member price. And the audio version! - we're like $30 higher than other places for those. We've literally had people come in, look at prices, turn around and walk back out. I think the only thing that saved us from bankruptcy on July 21 was the cafe sales. ;) Oh, and, I don't know why, but since Harry Potter's release, all sales, storewide, have dropped significantly - we're back to sending people home because we can't afford to pay them.

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  2. Sounds like your store was left with quite a mess after the initial excitement wore off. It must have been a tricky proposition to know how many books to pre-order, knowing that not that many were going to be sold after the first couple of days.

    People not picking up their pre-ordered books really stinks.

    Sorry to hear that things have slowed down so much that hours for staff are in jeopardy again. I went to B&N to pick up a copy of the new James Lee Burke book yesterday afternoon and they seemed to be pretty busy...of course, that was a Sunday afternoon in a mall location.

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