11/5/09

Price Wars- Where Will You Buy?

I'm sure you've heard by now, but at least for a short time Walmart, Target and a couple other major stores are selling top books for 9, 8 even as low as $7. And these aren't the little cheap paperbacks you'd expect to be in that price range. Many of the offerings are hardcover books with cover prices closer to the $20 range. T

You may know about the sale, but you may not know they're losing money on every sale. Also, you'll notice I didn't say they're losing money on every customer who buys at these bargain basement prices. They will lose on the few who walk out with just books, but for the rest, the books are what is known as a "loss leader", an item that the store knows it will lose money on (or maybe break even) in hopes that while a customer is there they find plenty of other stuff to buy. Maybe it'll be impulse purchases, maybe it will be "since I'm already here I might as well do the rest of my shopping" kinds of purchases but they're banking on making up the difference somewhere.

As far as other retailers, especially independent bookstores, something else you may not know is that some of them started to plan to stock their stores that way once they heard about the prices. Why would they want to do that when they normally buy at wholesale anyway? Because these prices, though they're retail in all reality, are even better than normal wholesale. For example a normal bookstore owner can purchase at 40% off the cover price so they get a $20 book for $12. Walmart may be selling that same book right now for $7 or 8. Buying them for their own stores sounded like a no-brainer except that Walmart (and the others) figured that out and put a quantity limit on those book purchases. So now what's happening is Walmart is buying at the same price as the other stores, but taking a planned loss of several dollars. There's no way independent or other smaller retailers can possibly keep up with that. In the short term, the little guys lose again.

One thing I haven't seen mentioned yet about this whole scenario is the situation we face as author/consumers. If you've got books on your holiday shopping list where will you buy?Will you understandably try to save on your own budget and buy at the big box stores, or will you pay a few bucks more at the smaller store you normally patronize? True, we've always been able to find bargains, but this is a whole new realm beyond in many ways.

In one sense, the big stores have made these books almost valueless. We expect to pay only a few dollars at used book sales, but brand new, especially hardcover, has always had a certain expectation of cost. Some people have even been known to save up specifically to buy a hardcover version or present one as a special gift. I'm not sure the same feel is there at the cost of a couple of cups of coffee. Will you support your own industry with the higher price point purchase this time around? Can we afford to? Can we afford not to?

Where does the path lead from here for publishers, distributors, for authors? No one knows just yet because it really is uncharted territory for the most part. One thing that is for sure though is it's going to be a bumpy ride.

Good Writing & God Bless,
Cheryl Pickett

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