The McBook wars

The one important lesson history teaches us is that 'history teaches us nothing'. (I guess the big guy also needs to laugh and entertainment himself now and then. Look at those fools ... look at 'em shooting themselves... look at 'em.)

Wal-Mart started by offering upcoming hardcover releases of Sarah Palin's Going Rogue and John Grisham's Ford County, amongst others at US$10 with shipping.

Amazon.com matched it. Wal-Mart took its offer to US$9. Next morning, Amazon.com also had US$9 books.

Richard Nash, Indie publisher and literary tweeter, says "Since Amazon/Walmart/Target prices lower than wholesale @kashbk suggests indie cancel orders from pblshers & order them from giants!"

Absolutely!

In the Klang Valley in November alone, some half a million books will be available at warehouse and remaindered prices with (rumour has it) a third from local publishers and distributors including a substantial quantity from Singapore. Yes, its called dumping. It is probably illegal. As far as we know there are strict laws governing 'sales', although anything can be 'arranged'. This is kow thim country. But, what's really going on? Is someone big going down? Sure sounds like a closing down sale to me, even if it is done by proxy.

Meanwhile, if you are a book retailer, you should know where you need to be.

Most people think that the current form of the book industry has been around forever. Actually no. The Net Book Agreement in the UK was ruled illegal only in March 1997 and, and by 2009, 500 independents closed down as a result. (Dillons and Waterstones actually started offering books on discount in 1991 -- still, not all that long ago).

The book, then, officially became a shoe in the UK, and thus entered the McBook.

Book retailing once used to be seen as an interaction of a consumer with a specialist shop. That model is, largely, not applicable anymore. By the late 1990s only 45% of sales were by specialists whose core business was bookselling.

I looked at history and dug up some interesting facts, that it always takes a crisis to inject some sense into the industry. The current pattern of the book trade was, more or less, defined in England at the start of the nineteenth century -- publishers injected the risk capital, wholesalers distributed and retailers sold the books to the public. (The practice of remaindering also began around then, in 1790, to clear old stock to make way for the new.) But the industry was bedevilled by cash flow and undercutting, particularly, at the booksellers end. In 1829, in the aftermath of the banking crisis of 1826, a group of major publishers and booksellers tried to impose some sort of stability into the system with the Bookselling Regulations, which fixed trade and retail prices. Unfortunately, the committee that formulated the Regulations did not fully represent the industry. Then in the expanding economies of the 1830s, these Regulations were deemed no longer necessary. (Talk of short memories.)

There was another attempt at reviving the Regulations in some form in 1848, but the protesters (who included Charles Dickens and Alfred Tennyson) won the day. The times were too good. Free trade and laissez-faire were the buzzwords of the period. Unfortunately, but predictably, this defeat was extremely bad for the industry. By 1880, it became a major crisis for booksellers, with publishers threatened with the prospect of being cut off from the market due to a shortage of retail outlets.

Then in 1890 Frederick Macmillan, who inherited his well-established family business, proposed that books should be published with 'net' retail prices with a discount to the bookseller to ensure a reasonable margin. Retailers who broke the rules were cut off. Despite initial protests, this 'net agreement' spread through the industry ensuring stability and growth. The industry could not ignore the enthusiasm for Macmillan's initiative. A London Bookseller's society was formed around then and, in 1895, the society became the Associated Booksellers of Great Britain and Ireland (which later became the Booksellers Association).

The Net Book Agreement survived up to 1997.

Biblio: A History of British Publishing by John Feather.