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In Praise of Our Peculiar Systems; Or, Why Book Retailing Used to Work Better

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Even considering the unlevel playing field that the chains and dot-coms have forced independent booksellers onto these past few years, the erosion of the independents’ market share has been surprisingly dramatic. The reason, I submit, is that chains and dot-coms have stumbled across an industry that is odd, yes, but only because its bottom line has never been solely about profit. And chains have taken those very systems meant to foster book publishing–peculiar but workable systems–and subverted them, using the book business in ways it was never meant to be used in the process.

Without doubt, the returns policy in the book industry is peculiar. But it exists because otherwise booksellers would be far less likely to risk their money on unknown authors. And if there is one characteristic of the book business that is constant, it is change. Public taste changes; authorial styles go in and out of vogue as fast as does subject matter; fads disappear, reappear (how I wish I could forget Feng Shui, angels, and the ubiquitous G spot); authors often change focus in midcareer; some have one good book, 20 lousy ones, another good one; some only write one book (like Harper Lee), while others write something wonderful every third effort.

Stack ’em Deep; Discount ’em Steep

The downside to returns is this: In the good old (prechain) days, returns held at about 10 to 15 percent. Which made the entire system workable. We independent bookstores bought books we liked the looks of, books we honestly thought we could sell and felt good about recommending to readers. When we got the books from the publishers, we read most of them, and we hand-sold them (we still do). Consequently, the majority of the books we bought ended up in the happy hands of readers, where they belonged. Publishers remaindered the returns they did get back, made enough on the 85 to 90 percent they sold us to cover the cost of the books that didn’t sell, and made fortunes on the bestsellers.

There was plenty of money in this process to allow publishing houses to publish the midlist titles that are the backbone of bookselling (not to mention reading): books by authors whose work sells well, gets good reviews, but is unlikely to hit bestseller lists; books by new writers whose first efforts might not sell in great quantity, but who will mature over time into solid, saleable authors; brilliant books that sell in small quantity but get rave reviews and may well make up “the canon” tomorrow–and be those books that will live on in classes at universities and on the shelves of book collectors and passionate readers.

Publishers could also afford to warehouse what has always been the true bread and butter of the book industry: those older commercial novels that still sell well–the books that link us to our past, help us to understand our present, make our future imaginable.

So what is different now? For one thing, chains use the returns policy to buy books on margin–to pick up titles that have the look of bestsellers, to stack ’em deep and discount ’em steep, selling such enormous quantities (for little or no profit) that bestsellers are created simply by the hype. Capitalism at work, some might say, although this practice has so far accomplished little except to lose bushels of money for big-box and dot-com retailers alike (not to mention publishers, once the returns come back).

What’s Pushing Prices Up

Here’s the problem with the new corporate system: The books chains pick to stack and rack don’t always (or even usually) turn into bestsellers; sometimes (often) they bomb, utterly. The fact that this happens and that the chains send all those big, big stacks of unsold books back to the publishers is one significant reason returns leaped from 15 percent to 35 to 50 percent after the so-called superstores began mushrooming around the country. In fact, Richard Howorth (past president of ABA, mayor of Oxford, Mississippi, and owner of Square Books) quotes an Open Book Publishing study which found that “the return rate for national chains is approximately fifty percent higher than the returns of the average independent store.” The consequence of these staggering returns? The price of books skyrocketed along with the returns rate as publishers struggled to recoup their losses the only way they could (besides, of course, reducing the number of titles published, which is an even more terrifying result than skyrocketing prices).

Ask yourself this question: Has the onslaught of so-called superstores and dot-com retailers really saved anyone money? Has it saved you money? I doubt it.

Co-op is another peculiar practice of the book business that booksellers engaged in with savvy and discretion for many years and that has now been subverted and is resulting in (among other things) skyrocketing prices. We used co-op to advertise a book in the newspaper when an author was coming to town or to feature a specific book that we liked in a newsletter (the operative word is liked, since chains pick the books for their newsletters based on co-op, while we apply for co-op only after we decide we actually like a book).

Now chains use co-op dollars for such unsavory (at least in my opinion) practices as “power aisle placement,” “Distinguished Young Author Series” (how weird is it to know that publishers pay to have their authors become “distinguished,” rather than paying those that are distinguished?), or in-store banners. In other words, publishers are paying (being coerced to pay, in my opinion) huge sums of money to chains to do what most self-respecting stores do on their own–display and promote books. Worse, because chains have so much buying power, they convince publishers to give them ever more of these spurious allowances, allowances which have not always been made available to independents.

A third peculiarity of the book business–this one perhaps appropriate for people who love and live with the written word–is the plethora of paper that is its chief characteristic, and I’m not talking here about the pages of paper in the books we sell. Each store deals with several hundred publishers. Each publisher publishes tens, sometimes hundreds of books each season. Every season each title is described in a catalog, listed on order forms, on sell sheets, in publicity material. Each book must appear in Books in Print (computerized now, but the same idea applies), on wholesaler and publisher inventories, and on our inventory system. Each listing must include title, author, ISBN, price, and category. Worse, each publisher has a different set of order forms, different types of invoices, different statements.

The Trouble with Technology

Nothing is standard. Numbers on statements, for instance, sometimes appear in horizontal rows, sometimes in vertical columns; discounts are not uniform; some publishers charge freight and some don’t; returns policies differ, and so do co-op allowances. All this varies from publisher to publisher and from year to year inside a given publisher. It takes years, literally, to learn the ins and outs of the book industry–and I’m just talking about the business part, never mind the glorious infinity of the books themselves.

The obvious answer to all this industry-wide scattiness is, of course, the computer. And as you might have guessed, The King’s English bookstore was dragged kicking and screaming (or, more accurately, moaning and whining) into the computer age well after everyone else. In 1987, we were still doing inventory control out of shoeboxes (well, not quite, but file boxes shaped and sized like shoeboxes). We’d sell books by writing down titles, authors, and publisher information on a tablet we kept at the desk, while customers cooled their heels–although they’d usually end up buying another book or two while they waited, so the system did have some advantages. We’d then ring up the books on the cash register, and at night, whoever was working would mark off each book’s sales on the inventory cards and pull for reorder those cards that showed low stock quantities. Orders were made each week by sorting all the pulled cards by publisher or wholesaler, adding in the special orders, and calling each vendor to place an order.

It was actually an effective system–in some ways better than the computer, since the person who did all our backstock ordering had the sales history of each book right before her eyes when she was deciding how many of a given book to reorder and how fast we needed to get each one. Now, we must click to three separate screens to glean that same information. But customers did have to wait while we wrote down titles, we had to do an annual inventory manually, title by title (groan), and there was an abundance of information–on, for example, sales by section and by date, inventory turns by section and by date–that our card system couldn’t provide but computers could.

We’ve made our peace with technology by now (sort of). But technology is by no means a panacea. Convincing staff to access the information in their own brains is growing increasingly difficult as booksellers become more and more dependent on the computer. “You know perfectly well that John Steinbeck wrote The Grapes of Wrath,” I tell one highly educated employee. “So, please, walk over to the shelf, pick up the book, and hand it to the customer who asked for it. Don’t type the title into the computer as if you’d never heard of it. That’s chain behavior.”

Returns policies, co-op practices, and mindless reliance on computers are just three examples illustrative of the changes occurring in the book business of late. The fact is that our industry is changing so profoundly, so rapidly, that it’s hard to see how it will all end up. For most independent booksellers, however, the books, each and every one of them, remain more important than the bottom line; life counts for more than money. That may be a shocking philosophy in our country, in our century, but it is a vital one if we are to maintain our collective sanity.

Betsy Burton, who serves on the ABA Advisory Council, founded The King’s English bookstore in Salt Lake City 27 years ago.

This article is derived from her new book, The King’s English: Adventures of an Independent Bookseller (Gibbs Smith Publisher, April 2005). To learn more and/or order the book, visit www.gibbs-smith.com or call 800/748-5439.

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