The struggle to survive as prices get hammered

Written by Tom Jaine

Wednesday, 18 November 2009 10:17

Spare the poor woolly publisher, pleads Tom Jaine

The prosperity and survival of small publishers is a constant preoccupation, whether lying in bed, giggling at our MPs, or pounding the keyboard. This is mere preface to a whinge, so divert now if you can’t take self-pity. For readers of that hue, I should immediately agree to the proposition that there are good small publishers and bad. The good survive, the bad do not.

I would plead for a third category: the woolly. The woolly are not bad, they might sometimes be good, but they are a trifle amateur; or they may be single-minded and unwilling to fuss with the necessary evils of success. Or they may just be a little woolly. In a kinder environment the woolly survive because their hearts are in the right place. Currently, the woolly have a tough time.

The structure of the British book trade is pretty weird. The necessary deductions from a book’s retail price before the publisher gets any revenue are surprising to say the least. Let us take Peter Brear’s Cooking & Dining in Medieval England as an example. It costs £30; the author takes 10% royalty; the bookshop requires its discount, either 35% or 40%; the bookseller’s discount will effectively be higher if he is supplied via a wholesaler, who will expect a discount of 50%.

At this point, the distributor will take his cut, which is usually 12 or 15%, and, if it is a trade sale, the trade representative or salesman will ask for 10% (these last two are percentages of the invoice value to shop or wholesaler). In mathematical terms this looks like this: £30.00 - £3.00 - £10.50 - £2.92 - £1.95 = £11.63. If the deal is with a wholesaler we have £30.00 - £3.00 - £15.00 - £2.25 - £1.50 = £8.25.

If our arrangement is an exclusive via Amazon, they might expect a discount of 65%. This would not be subject to a commission to our trade reps but we would have to pay the distributor’s commission if the shipment goes through them. The sum would then look like this: £30.00 - £3.00 - £19.50 - £1.57 = £5.93. This is for a nicely produced book of 550 pages. It costs £4.50 a copy to print enough stock to last 18 months.

The only way this really works is either to print hundreds of titles or sell thousands of copies. If you don’t have enough capital to print hundreds of titles and you produce books that sell in tens rather than hundreds, then it is quite difficult to rub along.

The giants of the world of books will urge you to endorse and support their schemes, which they say will increase your sales and hence your income. Whether it is Amazon or Google or even, to be frank, Waterstone's on the high street, I spit upon their ambitions. Rather as the small food producer is cajoled by Tesco/Sainsbury, so the small publisher should have as little to do with these people as possible. Whatever they think up is for their profit, not yours. We, like a goat’s cheese-maker of the lower Wym valley, should encourage personal contact, direct sales, engagement with the end-user. Hence perhaps our projected improvement of the website.

Peter Brear’s book offers a concrete example of the Amazon effect. If you order it from Amazon today, they will quote you a price of £19.50 with free delivery. The Book Depository on the same site quotes £17.94 plus £2.75 delivery. The only way that either of these organizations can obtain this book is via the wholesalers, to whom we give 50% discount. Given that the wholesalers must allow some profit for themselves, and that there are now two postal movements to absorb, the price of £17.94 is ludicrous. They cannot be making more than 50 pence. Whom does this benefit? It makes a nonsense of the retail bookseller on the high street; or it makes a nonsense of our insisting on only giving 35% to that retailer.

Were customers to come direct to me, I would be happy to give them a full trade discount, because I would be pocketing all those commissions that otherwise would have been paid - and the customer would be as happy as after going to Amazon. And Amazon would be bankrupt – whoopee! A cautionary tale on this angle is the greed of other publishers. I wanted OUP’s edition for the British Academy of The Diary of Ralph Josselin. Not finding it in any bookshop nearby, I dreaded the long delay in supply if I ordered in the normal fashion. Therefore, I telephoned OUP’s direct line to get it through the post. They had the gall to charge not only the full price but the postage too.

Another solution is to charge more for the books. As far as I can see the structure of the trade (and at this point I should just observe that every deal between publisher and seller is reversible in the seller’s favour; very few of these transactions are firm sales, all on a sale or return: not only do they take our revenue but they expect us to capitalize them as well) results in a terrible increase in the cost of books to the reader. Of course, titles that are expected to sell well are priced low to promote that end, but titles of indisputably minority interest are hammered to extinction. The only reason that Oxford University Press charges £93.00 for Pigs and Humans (above) is the crazy discounts and commissions that force the price up and up until there is some acceptable fraction remaining for the producer.

These prices appear to me also to be the consequences of publisher greed - it’s not just the fault of someone else. The way in which university libraries were held to ransom by academic publishers and learned journals in the years since the infamous Robert Maxwell at Pergamon Press is shocking. It has also queered the pitch for enterprises like Prospect Books. They swallow the libraries’ limited budgets, leaving nothing for us.

Tom Jaine is proprietor of Prospect Books, an acclaimed publisher of titles on cookery, food history and the ethnology of food

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