In what I hope is proving as interesting week for you on BB&H as it is for me, here's one more entry into the conversation about marketing/sales/advertising. This terrific article was written by James Grippando and published this month in the MWA bulletin. With his generous permission I'm reposting it here. -- MJR
“Buy New”: The Internet, Used Books, and the end of the World as We Know It
Elbert Hubbard, a prolific American author who published more than seven million words before his death on the Lusitania in 1915, once said that, “This will never be a civilized country until we expend more money for books than for chewing gum.” If that is so, we are well on our way to becoming the most uncivilized nation on earth.
If you have logged onto www.Amazon.com lately, you probably know that a “new” hardcover can be purchased from a “used” bookseller for as little as one cent. Yes, that would be $00.01 (plus shipping, of course) for a book that has yet to be remaindered. Cool, right? Wrong.
Here is the problem. Ask just about anyone in the industry these days, and you will hear the same sad story: mass market is in the toilet. Some of the most knowledgeable players in the industry have traced the cause of this downturn back to the fateful summer of 1996, when paperback distributors eviscerated the wholesale distribution workforce and began shipping books directly to retailers. This shift in distribution patterns streamlined the way retailers ordered books from publishers, transforming mass market into another arm of blockbuster publishing—the brave new world of fewer titles and branded authors. It’s not clear that mass market will ever recover from this blow, but one thing is clear: the ready availability of cheap hardcover books over the Internet certainly isn’t breathing new life into dead pulp. Readers who watch their pennies—and there are many of them—used to say, “Gee, I’d really like to have a hardcover, but I think I’ll wait for the paperback.” Now, they don’t have to wait. Buyer No. 1 purchases the new hardcover for $25, reads it, and then posts it for sale on the Internet for $13.00. Buyer No. 2 reads the same book and resells it on the Internet for $6.00. The cycle goes on, until the reader who used to buy a new paperback now gets a “used” hardcover in virtually new condition for less than half the price of a mass market. Toss a few thousand shiny new cloth remainders into the Internet pool, and why on earth would anyone plunk down $7.50 for a paperback? The sole remaining mass market demographic is the poor slob who is stuck in the airport with absolutely nothing to read. Of course mass market is in the toilet!
Obviously this used book cycle has some benefits. Consumers get new or nearly new books for considerably less than retail price. They read more, presumably, which helps to grow an author’s fan base. There is a downside, however. Sooner or later, the only people who will pay retail price for a new hardcover book are those die-hard fans who simply must get their hands on the next book by their most beloved author as soon as it hits the bookstores. The rest of the world will wait for the used books to flood the market. And they are waiting in ever-increasing numbers. A recent report from the American Association of Publishers estimates that in the trade publishing market alone, annual used book sales are already at $700 million—roughly ten percent of the market. The number is only growing.
Is this really a bad thing? You bet it is. If this trend continues, publishers may well be able to publish only those authors who can earn out the bulk of their advance in the first few weeks of hardcover publication. That means fewer authors will get published. In turn, that means fewer choices for readers. To anyone who reads beyond the bestseller list, that is surely a bad thing. It also hits bookstores right in the pocketbook, at least the ones that sell new books. It’s hard enough for the independents to survive in today’s market without the added stress of a used book craze.
So, what can be done about it? First, publishers should rethink remainders. Does it make economic sense to dump all those books into the used book pool? A remainder is sold at dead cost, which means that it earns no profit to the author or publisher. The publisher recoups its cost—in theory. With the Internet, however, a remainder can be sold several times over. Each hardcover resale eliminates another potential sale of a new paperback. It doesn’t take Milton Friedman to figure out that the short-term benefit of recouping the hardcover cost will eventually be outweighed by lost profits on mass market sales. Try telling the folks in Disney that, before putting Bambi and Snow White in the vault every six years, they should unload every last DVD and videocassette at dead cost. Books are different, to be sure, but unless a book is truly going out of print, never to be reintroduced into the market in any form, the economics aren’t totally different. At the very least, publishers should make sure that remaindered books are in fact sold with the remainder mark (usually a black magic marker along the outer edge of the pages). To take it a step further, they might even want to consider selling remaindered books without a dust jacket, in effect turning all remaindered books into “hurt” books that are perfectly fine to read, but that won’t be sold again and again over the Internet.
Second, authors, agents, publishers, and booksellers should do more to encourage the purchase of new books. A serious campaign to educate the book buying public may be in order. Though the purchase of used books is not even the remote equivalent of pirating music off the Internet, it is at least noteworthy that the music industry did quite successfully convince fans that there is nothing wrong with wanting to be paid for one’s efforts as an artist. Our message should be this: Hey, it’s perfectly legal to buy used books, but people who do it should know two things. One, the author, publisher, and local bookstore make nothing on the resale of books. Two, diminished profits for the people—yes, we are talking about people, not just corporations—who write, publish, and hand-sell books leads to one inevitable consequence: fewer choices for consumers.
Sure, we all love a bargain. But before you log onto your computer in search of yet another hand-me-down hardcover, ask yourself when was the last time you bought a new book. If it’s been a while, why don’t you do all book lovers a favor? Drop into a real bookstore, bring your credit card, and have yourself a ball. And instead of bringing a bottle of wine to that next dinner party you’re invited to, how about bringing a book?
Oh, and you can skip the chewing gum.
James Grippando is the author of eleven suspenseful thrillers, including two releases this year: Got The Look, No. 5 in the Jack Swyteck series; and Lying with Strangers, available exclusively as a Main Selection of the Literary Guild, Doubleday Book Club and Book Of the Month Club. Leapholes, his first novel for young adults, will be released in September. His novels are enjoyed worldwide in more than 20 languages.
Copyright James Grippando 2006