Tuesday, December 16, 2008

The Business of Selling Books

Bookstore chains like Borders and Barnes and Noble are able to offer big discounts on bestsellers and sales specials because publishers generally give the booksellers a hefty discount off of cover price: typically about 48%. On top of that discount, the booksellers are also given the right to return the copies they are unable to sell.

But now a new HarperCollins imprint, wants to change the traditional agreement and Borders has agreed to the new terms. This could be tricky for the booksellers and it will be interesting to see if the new agreement is just the first of many new ones between publishers and the big chains.

According to Minyanville, the new deal works this way:
Borders Group will get a discount of 58% to 63% off the cover price on initial orders from the publisher, a new imprint of News Corp's (NWS) HarperCollins. Typically, the discount is about 48%.

Under the deal, Borders won't return unsold books to the publisher. This could be a gamble, because an estimated 30% to 40% of adult titles are eventually returned to the publisher.

The new agreement may mean remainder bins filled with steeply discounted books will be sittng next to bestsellers, or at least tucked away in the back of the store.
As someone being forced to keep a tighter than usual watch on my spending right now, I know that I'll be tempted to buy new books later than usual in hopes of picking up a bargain by waiting. This sounds like a good change for the publisher - and a huge amount of risk being placed entirely on the shoulders of the bookstores.


  1. If it helps keep them in business, I'm all for it. Could be interesting!

  2. Borders will agree to anything right now. What will anyone at Borders care when they go under after the holidays? Maybe Murdoch will buy Borders so he has a distribution system for his "product".

  3. Honestly, Borders has had such a sweetheart deal for so many years, and driven so many independent booksellers out of business as a result, that I think a little turn-about is fair play.

    On the other hand, I don't want to see any bookstores, or any stores for that matter, go out of business.

  4. It's a new twist, for sure. bookfool. I'm curious about its long term effects.

  5. Exile, I guess I'm not surprised that Borders was the first to agree to the new terms. But with Barnes and Noble in some trouble of its own, I wonder if they can hold out for the old terms?

  6. Annie, if I were a bookseller, I would surely agree with you. But I imagine that other publishers are already watching this to see what happens...

  7. I hear you, C.B. I'm not much of a fan of the Borders floor plan, but it's a bookstore, after all, and I'd hate to see the chain bite the dust.