Friday, June 02, 2006

Mergers & Acquisitions

Yaaaaawwwwwwwnnnnnn. Waterstones buys Ottakers blah blah blah.

I Agree.

I Disagree. Or as the mobile ad at the moment goes, how much time have you got?

Rather than bore you with some rambling entry I thought I'd offer a few bullet points in response to the Iain Dale piece and it's comments:

  • I wish Second Hand book buyers would realise that a book has to be bought new at some point in order to become second-hand (That's you Mr. Chap of a certain age with a rucksack on. Just what are you carrying in that thing? You know who you are)
  • There will always be independent bookshops. Every generation of bookseller will throw up a few idiots who think they could do a better job or are pathologically incapable of being fastracked up the greasy pole of management. (Naming no names)
  • WE'RE NOT OVERPRICED! 99.8% of our stock is the same price as every other terrestrial retailer.
  • It's true, if every independent bookseller went bust then there wouldn't be any great material change to the consumer. However, I had a dream a few nights ago where I was living in a totalitarian state. I was really enjoying it too as I didn't have to make any decisions, I was told what to do and had no responsibilities. At the end of the dream after the regime had been hunting down middle-aged ladies in tracksuits I found I was now a target. I was machine-gunned to DEATH. There is a message there somewhere.
  • A**z*n cannot live by books alone (Home & Garden!? Electronics & Photo?!) C&P are not in it for the riches folks.
  • Supermarkets are NOT faster, better, cheaper.
  • I understand why Waterstones gets better discounts than us and the reasons they snaffled up Ottakers. I don't mind this. I would however like longer credit terms - 90 days please. After an initial cashflow bottleneck longer terms wouldn't affect the publishers at all. It would be something they could offer us small fry without affecting their P&L as there will always be a continuous supply of sales and re-ordering. They do it for A**z*n.
  • I think the Da Vinci Code would have been much better if it was written in bullet points. Sort of avant-garde don'tcha think?

Erm, I think that's enough for now.

4 comments:

  1. Clive KeebleJune 03, 2006

    Adam,

    The Amazon Advantage programme requires min 55% from the publisher, whilst AZ pay the publishers monthly in arrears when they have sold the stock. Amazon by "storing" the books for the publishers would be saving the publishers monthly pallet storage costs (how many medium sized publishers do you know who keep their books "in house"). Amazon are publisher friendly and very easy for them to service : I despise the manner in which they have undermined the terrestial booktrade, but I accept why they achieved their current sales.

    Relationships with publishers are "developed" following many years business. Extended credit is no more necessary than sale or return : order and stock the "right" books, some will sell quickly, some will sell slowly, the odd "dog" will go in the January Sale every second year. IMVHO never discount because as a shop owner you have fixed and variable trading costs 365 days a year : you cannot afford to give away the bottom line, if you get a deal with a publisher or wholesaler that is your bunce to tide you over hard times.

    I don't know what your aversion is to the secondhand booktrade, but if you dealt in this field you would realise "the day you buy", is "the day you sell". It should be possible to apply this maxim to new book selling : only buy selectively

    Go out into the street market and ask those sellers how much credit (mace) they are offered by their suppliers.

    Costermongers and barrow boys are survivors ; they don't expect extended credit, yet I bet they earn far more a week than many b&m businesses. Good flash, ambience, smiling and joking with customers : watch the winner in the Derby today, he will be making his own "luck in running" as they round Tattenham Corner - no excuses, those who offer excuses are the losers, and they generally are losers for the rest of their (racing) life.

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  2. To my mind, I thought this was pertinent to us Brits in the Book Standard article,which I also agreed with,

    'There are so many factors that contribute to making a book purchase that even those of us who lean to the left politically will buy books from Amazon.com, knowing that the company contributes to Republicans.'

    Not so much the politics, though that too, more the fact that the money goes to America.

    I think the penny will drop sooner or later.

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  3. Clive,

    Yes, I know how Amazon operates. They spotted a gap and they've filled it. What I don't get is why the publishers don't sell direct from their own warehouses and websites and cut out the amazon middleman. It would also be nice if Amazon had to pay the retail business rates the rest of us have to cough up.

    I have been following a few of your comments an other blogs about the necessity of sale or return too. When we started we knew the backlist that we wanted to keep, that we knew we would always keep. We were and are totally confident in our stock so we went to the publishers and asked for extra discount for firm sale. We've been in the business more than a few years now and have good relationships with the reps and the publishers. Where our shop is you can walk to Penguin HQ, Time Warner HQ, Random House HQ and many others in 10 minutes. NONE of them were interested in our firm sale proposal. They just didn't care. They said it made absolutely no difference to their costs. Even small publishers were saying the same thing. We weren't being cheeky either as we were only asking for an extra 5 points. They just said Sale or Return is fine by them. Even at normal SoR discount they still didn't care. Can you explain that to me? Also, sale or return is necessary when taking a punt on choosing amongst the 000's of new titles every month. Sometimes no matter how hard you try some books you love just don't shift and as we're on a pretty tight budget we've got to free up some cash now and then to get the next round of new stuff. As a small stockholding shop too we have to keep our new titles 'fresh' or our limited walk in traffic will stop coming to us after seeing the same old stuff for the third time. We just can't afford to stockpile and offload every second january. We're running a business, not a library.

    We have a cracking second hand bookshop directly opposite us that we share book-loving customers with. I buy second-hand too. Where else would I find a County of London Plan 1943? (Oxfam in Oxford for 11.99) It's just the men of a certain age who sneeringly ask if we 'only' sell new books then wander off sullenly like we're some kind of corporate pariah that raise my hackles. They still know who they are.

    If you look again at the article from America that I agree with you'll see that I'm not making any excuses. I know the market and I know our place in it and I'm fine with that. We started on the bones of our arse six months ago with nothing but a friendly landlord, a no bull**** bank manager and tons of self belief. We've now got loads of brilliant and friendly customers who love our shop, bookgoup and events (AC Grayling on the 21st June is the next). Don't confuse a blog with a shop philosophy. The blog maybe irreverent, whiny and occasionally stupid but our busines is deadly serious. It's our livelihood and if we don't approach it with nothing but positivity we're dead in the water.

    Oh, and Manny, a third generation barrow boy who runs a fantastic veg stall outside our front door every day has a great and generous relationship with his suppliers. He doesn't stockpile veg and flog it off every second january.

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  4. Clive KeebleJune 03, 2006

    Adam

    Amazon make their money from the third party sellers, be they mega-listers or joe public selling single items (this is clearly shown in the balance sheet) : this income lets Amazon themselves trade books (and other items) often as loss leaders to maintain and increase market share.

    In many instances the publishers are not supplying Amazon themselves : the contract might be with the publisher's own distributors or a third party, the publisher has little or no say in the matter except when AZ would be looking for extra discount points to permit them to sell beyond 20% or 34% discount.

    Business rates, Amazon (Milton Keynes) pay them, just the same as Tesco : they, and all larger premises, are actually now surcharged by 3% - this "surplus" is there to counterbalance Small Business Rate Relief for all single unit holders in England where the rateable value is less than £9,999 in the provinces and if my memory is correct £14,999 in London.

    Some publishers certainly give better terms for firm sale, both here and in USA. The multi-national mega corporates might not be willing to play patsy, but they are but a part of the booktrade.

    Most bookshops would scan the monthly releases to choose new stock : other than a few Macmillan titles which have been slaughtered on Amazon I would currently have no problems with dead stock which is destined to be sold off for a couple of quid in January 2007. I took a punt with "Suite Francaise", and recently made a correct choice with "Trains & Buttered Toast" (John Betjeman) - only two 1st printing copies remain to sell (the title is currently OS at Murray's).

    Within arm's reach of my desk lay a County of London Plan 1943, Plan for Plymouth 1945 etc.: they will not be listed on line, having been recently purchased. Somebody will stroll along wanting them, sometime in the next few years.

    I am old enough at 60 to remember when bookshops had genuine January sales. Everybody gets "dead" stock, we in the booktrade are lucky that we don't deal in perishable goods with a "sell-by" date.

    Most bookshops only survive by guile, few of us have any funds, our "wealth" is our knowledge and experience gained over the years. We move from one crisis to the next : we have no right to survive other than by our own graft. The independent bookshops which are "cash" rich is mainly only thanks to having purchased the freehold thirty or more years ago.

    Why don't publishers sell direct to the public : plenty do, and this causes ill-feeling with some bookshops. Ian Allan, Midland Publishing, are just one example (from Lower Marsh) : they also supply Amazon.

    Sun beating down here, we have a walking festival this weekend, I don't expect to be able to sell those Macmillan "dogs" today. Typical p/b incomer this week, "Nell Gwyn - a biography" by Charles Beauclerk : Amazon 50% off, a Pan title (Peter Pan frigging world), thankfully only 2 copies ordered and not two dozen. I must make a decision never to order any more Macmillan titles for casual stocking.

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