Sunday, August 12, 2007

Australian Bookstore Chain Demands Money from Publishers

I love receiving discounts on books just as much as the next guy and I'm betting that most of you feel the same way. The good news about discounted books is that it makes it possible for us to buy more books than we would be able to add to our collections if we had to pay the full retail price for them. The bad news is that independent bookstores, because they can't compete with the national chains on price, have become an endangered species, and even the large chains are feeling pressure from the biggest discounter of all,

In June, Waterstone's rightly received a lot of negative publicity in the U.K. for demanding that publishers pay special fees if they wanted to see their books featured in prominent displays in Waterstone's stores. Now it appears that a similar tactic is being tried in Australia by the Angus & Robertson chain.
AUSTRALIAN publishers are outraged at a demand by Angus & Robertson that they pay to have their books stocked by the chain.

The Australian Publishers' Association said yesterday its members were angry and distressed by the demands, which range from $1500 to more than $45,000.
Publishers have until August 31 to pay up, or A&R will stop ordering their titles.
A&R general manager Dave Fenlon said: "As a commercial business, we have the right to make decisions about which suppliers we do business with. "In our negotiations with suppliers, we are the customer. Unfortunately we cannot work with every publisher in Australia, particularly if the relationship is not commercially viable for us."
It is not unusual, of course, for large retail chains to squeeze manufacturers for the lowest wholesale price that they can get. Wal-Mart is notorious for doing exactly that in the United States and some companies have been squeezed so close to selling to Wal-Mart at cost that they now refuse to supply that giant retailer.

It is unlikely to ever happen, but it would be fun to see what would happen if every publisher in Australia refused to pay these fees to Angus & Robertson and the chain suddenly found itself with empty shelves. That brings up the key question of whether book buyers are willing to pay a little more per book in order to help sustain a healthy publishing industry. I doubt that the average book customer thinks much about the link between publisher and retailer when he stands at the cash register holding the latest masterpiece from James Patterson or Danielle Steele.

But readers of book blogs are not average book customers. Do you think this kind of thing is right? Would you be willing to pay a little more per book purchase if it would help to end the spread of this practice?


  1. I heard about this, and read a letter from one of the publishers back to the retailer that was absolutely, viciously wonderful to read. I wish I had the URL, but unfortunately it was something my husband read to me, so I don't know where he found it. The publisher made it quite clear that he wouldn't be participating in this "opportunity." I remember hearing of the original demand letter from the retailer and exclaiming, "that's extortion!"

  2. I believe this sort of thing is old hat in grocery stores. Not to mention search engines. I know we like to think books are not just another commodity, but booksellers have as much right to generate income as anyone else, don't they?

    I dunno. Is there a sense of trust out there that booksellers only feature books that they personally think are good? I've always just assumed they were featuring things that they figure would make them more sales, whether they were good or not. If they take money for it as well, does that make much difference?

  3. I have the links on my blog. The responses were priceless!

    As an Aussie, I can't remember the last time I bought from Angus & Robinson, but I won't be in a hurry to go back there.

  4. Heather, I would love to find some candid letters from publishers back to the retailers on this practice. Ultimately, of course, it will be the consumer who pays because the list price of books is almost certain to go up if this becomes common.

  5. True, Sylvia, I worked in grocery stores during my university days and I remember how shelf space was sold to the highest bidder, especially when it came to the introduction of new products.

    My big concern with this whole thing is the kind of squeeze that it puts on smaller, independent publishers who are already at such a disadvantage when it comes to competing with the big boys.

  6. Marg, I'm going to head your way to follow those links, thanks.

  7. Why shouldn't book publishers pay for their distribution system the way everyone else does? I worked for a company that made boxes and no one promoted, sold and delivered those boxes to the customer for free. If the publishers don't want to pay the fee, then they can open their own stores. That's capitalism, baby.

  8. I agree that it's just a variation on the usual capitalism...but as a consumer it can only hurt me by limiting my choices by running small publishers into the ground by making it almost impossible for them to market their books. The practice itself is nothing new for other segments of the free market, but I can barely afford books now and this will ultimately, I imagine, mean that I can afford fewer than ever.

  9. I wonder if there would be some sort of shakeout after consolidation and then an explosion of improvement in the industry, as there was when the AT&T monopoly was broken. Remember when it cost an arm and a leg to make a long-distance call? And when the only way you could reach someone was if he was at the physical location where his phone was attached to the wall?

    Not that cellphones have necessarily improved society, but look how much prices have decreased and how much product innovation there has been since AT&T was busted.

    I don't want book publishing to become a monopoly, but surely there are creative ways for small publishers to get their books in front of consumers -- selling over the internet, for example. Yes, that's a more expensive form of distribution, but what is the total cost of the supply chain for that if you aren't paying placement fees?

    How do other companies in the similar situations market their products? What about speciality liquors that might not be stocked by most stores? Speciality cheeses? I have to order a lot of my cheese online or wait until I am in Milwaukee to get it because my grocer (who is getting better) carries just the basics.

    I'm rambling -- haven't had my diet Coke yet. And I get my books at the library - I read way too much to afford to buy everything, plus I hate the clutter of having a lot of stuff in my house. (Doesn't help that I have moved about 30 times in my life and books are heavy and a pain in the neck to transport.)

  10. I admire your optimism, factotum, I really do. And you might very well be right that in the long run the publishing industry could be forced to come up with innovative marketing schemes that would benefit the small publisher and maybe even those of us who already spend too much money on books. I really hope so.

    The internet has certainly changed marketing concepts and made the world a smaller place. The bottom line for me is that I want to know what I'm missing. I do get bored with the big box bookstores which all sell pretty much the same thing at the same prices. In the back of my mind, when I'm in one of those places, I'm always wondering where they keep the good stuff...and, of course, the good stuff is most always found in the independent shops who have owners who care enough to find it and put in on their higher prices, of course.

    Maybe I'm being selfish by only looking at this from a consumer's point-of-view. I sense that it is the wave of the future and that there's probably not anything that can be done to stop the trend, but it makes me very uneasy about my ability to continue to support the publishing industry to the extent that I've supported it for years. My income has not gone up at nearly the pace that the price of books has gone up. to the fridge for another Diet Coke, the second of the day for me. :-)