Saturday, May 19, 2007

A Spectacular Bookstore Meltdown?

Raman writes about the effect of the "dumping" books during warehouse sales on the local bookstores. When he attended a meeting of book retailers in Singapore:
The consensus was that whatever is happening does not bode well for the industry. But it is the industry that is doing it to itself! They are all eating from the same bowl what? And the bowl is only so big (or small)... As described by one of the book dealers during the lunch, "Warehouse sales are like steroid injections." How true. They solve the short-term problem of cash flow ... but the long-term side effects are less predictable. He said, "They can net about 200,000 in a warehouse sale, which will take them three months to make at the shops." I cannot be certain about that, but warehouse sales are about cash flow, or the lack of it. Warehouse sales used to be held once or twice a year for getting rid of old stock, a reasonably healthy situation. "Raman, what do you want me to do with all that old stock?" one CEO of a major book-chain said. True. No one is arguing with that. What the industry is grumbling about is that there is one practically every month (or, according to some, more often even than that), with brand new books being offered at huge discounts as loss leaders to attract customers, and with remaindered books brought in pallet-loads from Singapore, Australia, the UK and the US (in a practice known as dumping which is, probably, illegal in those countries).
Now we all love our deliciously cheap infusions of books ... but in the long-term book lovers could be losers too if our local bookstores go to the wall.

36 comments:

Anonymous said...

I believe such constant dumping of remaindered books does not bode well for the future of the book retailing industry in Malaysia. Books should be bought at bookstores - not at warehouse sales at such low prices. It may be good for book lovers but in the long term there will be repersussions. We have too small a population that buys books on a regular basis. I think the book industry needs to look at this practice seriously.

bibliobibuli said...

and ask for some kind of legislation to be passed i think.

Tunku Halim said...

So no free market?

bibliobibuli said...

is a free market such a good thing if it means businesses go to the wall while some fly-by-night dumpers (folks who know more about quick bucks that real books) make a killing?

i dunno. the question is, what's best for the industry and for readers in the long-term. at the moment i wonder if the industry can sustain itself ... raman thinks not

question also - who is it promotes YOUR books, halim?

Anonymous said...

If books are not so ridiculously expensive, yes, I agree, buy from bookshops.

But RM40 for a book?

That's what, a week's meal for someone like me.

Now, if books were edible...

Irman

sympozium said...

Prices of books in Malaysia are still some of the cheapest in the developed world.

Anonymous said...

The same argument has been floating around for years s with regards to hypermarket chains and big bookstores vs mom-and-pop shops. Guess who the consumers are continuing to choose?

Money talks. We'll deal with the damage later. And why not? That's what's working when it comes to environmentalism, isn't it?

Ruhayat X

SecretHistory said...

Although books in Malaysia are cheapest in this world but they are relatively expensive compared to the living expenses.

For example, a new book in UK could probably buy you 2 lunches. But a book in Malaysia can buy you 10 dinners.

Anonymous said...

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US Govt tries to seize Mike Moore's new docu

http://film.guardian.co.uk/cannes2007/story/0,,2083430,00.html



Bowling For Viz

Anonymous said...

Sympozium,

that's like the govt telling us our toll rates are among the cheapest in the world.

i agree with Secrethistory.



Call Of The Viz

sympozium said...

It's not that books in Malaysia are overly expensive, it's just that food in Malaysia is reasonably cheap :-)due to the proliferation of hawkers and mamak stalls etc. But RM40 will just about buy you ONE crappy and tasteless lunch in Dome.

It also depends on the type of books one spends the money on: RM40 for chick-lit is paying RM40 too much for it! But RM40 for an Orhan Pamuk or a McEwan or a Coetzee or a Rushdie? I think it's bearable!

bibliobibuli said...

malaysian exchange rate

one crappy mass market paperback = 10 bowls of delicious and sustaining fishball noodle soup

books are expensive sympozium!!

sympozium said...

I'd give a LOT to buy books at KL rates again! :-)))

Anonymous said...

Books are expensive in Malaysia. There's no doubt about that. All the more that we should learn to be more discerning in our buying habits. We must buy less trash and more nutritious books. Well, that's just a wish! For a recent example, look at what is happening in the U.K. Borders's leaving the U.K. market and elsewhere! When books are remaindered, authors suffer too. We don't want that, do we? It is a vicious cycle thing.

Anonymous said...

Free market is not necessary all good! There are downsides to it!

animah said...

Legislate against warehouse sales?! I'm horrified Sharon.
I say let free market deal with it. The book industry is doing it to themselves - at some stage they will reach some equilibrium. Legislation which interferes with the free market is interventionist and the consumer always suffers in the long run. If you are thinking about the need to protect the writers - well that is exactly how European farmers and Western textiles are being protected by subsidies and tariffs. Who gets hurt? Consumers and the non Western World.

By the way Raman does not understand the law of "dumping". It is not something that is illegal in some countries and not in others - it is the right of government against another government where imported goods are sold cheaper in its country than in the country of origin to the detriment of the local industry. This is why you do not find Proton in the USA.

The Free Market against Protectionism - well the debate can go on forever.

Eliza said...

Sorry Sharon but with books being sold at higher prices under normal circumstances, warehouse sales will continue to net sales that would otherwise not happen. I would say bring down the prices of books and then the retailers may find less stock to get rid of.

Greenbottle said...

what a crazy thing to grumble about! book buyers grumbling about cheap warehouse sales? isn't this the craziest thing in the world! grumbling about having too much of a good thing?

for once i agree with dear animah...
and to reiterate, i wish there are MORE warehouse sales... bookshops will never be extinct because of sales. as somebody above mentioned real book lovers will go buy quality books even at relatively expensive price in normal bookstores...in fact in places like charing cross road in london, i notice there're sales and discount books in many bookshops everyday,...borders here have bargain bins everyday too...that don't stop people going for other books... in the US they have discounted bookstores like the strands and 1/2 price bookstore chains ..and people go buy books here by the lorry loads...but these don't kill other bookshops there...

i especially feel VERY GRATEFUL and would like to thank PAYLESS, BIG BOOKSHOP TINMES warehouse sales for making book lovers here to at last able to build decent home libraries of thier own...i wish and hope there will be more of these!...

SecretHistory said...

Actually I am not sure what the argument is about because warehouse sales are basically selling books that people don't want to buy and they get left over.

So the bookstores sell them at a lower price to create demand and create space in their warehouse for books that would sell well in the bookstore.

The thing is there are so many books to read and very little time to do so. Let's say if I can read 3 books a month and there are 6 books that I want to read published that month. Would I buy all 6 new hardcover books in that month when I will read only 3 or will I buy only 3 and wait at a later time for the paperback or warehouse sale for the remainder 3.

bibliobibuli said...

The book industry is doing it to themselves

= some players in the book industry

+ let's be clear that we're talking here not about stock clearance sales for books that are remaindered by our local booksellers ... but books which are being shipped in at rock bottom prices from overseas by the container-load.

of course most of you are going to see this just from the consumers point of view. (and i love warehouse sales too!) but this is what dumping is all about and this is why the local book industry is scared.

book prices actually can't fall by much. sympozium was quite right (was just winding him up earlier!), books are sold more cheaply here than in many other parts of the world despite the higher transport costs incurred by bringing them in

so you are all in favour of a free market and survival of the fittest?

i myself don't know the answer. can see both sides of the argument.

am not a hypocrite. just conflicted.

Anonymous said...

SecretHistory: I think Raman's complaint is that these books are not leftovers or old stocks of the compny doing the warehouse sales -- they are imported from other countries, expressly to be sold here at lower than new prices. That's why he calls it "dumping", which is illegal in countries like the US.

Give Yourself the Gift of X

Anonymous said...

And I agree with Sympozium: just because you can buy two dinners for the price of one book in the UK vs 10 in Malaysia can simply mean that food is cheaper here.

Take other goods to compare and you can get a very different result. Shoes, for instance. Or hi-fi amplifiers.

Surveys Show Blondes Prefer Brand X

Anonymous said...

Imagine that you are an independent bookseller for a moment. You have brought in lots of stocks selling at current market prices. Then down the road there is a warehouse selling the titles you just bought at rock-bottom prices. Is that all right?

jen said...

I think the assumption here is that people will buy a set number of books regardless of the price, when I think actually people tend to buy a set $$$ worth of books (true for me anyway).
Personally, I think warehouse sales induce people who might not otherwise buy books to buy them, and those who do buy them, to buy more. So volume wise it is definitely great for the reader. $ wise it's probably great for the retailer too, since I find that for me anyway I usually exceed the abovementioned set $$$ amount if the unit price is low. :)
I guess the big hoo hah is about whose pockets the money goes into. Couldn't the independents get into the act somehow? Band together and buy pallets loads of books? And I disagree that the bowl is only so big (or small). The bowl's size can change ... demand and supply curves anyone?

SecretHistory said...

Well Jen, recently at the Payless Warehouse sale in YMCA (not the one in Sunway), I overheard (bad of me) a conversation between two teenage girls about 15 or 16. No parent seemed to be around.

These two girls were hauling one basketful of books each.

The first girl said, "Oh dear I think my books would cost more than fifty ringgit. That's all I have"

"Me too, I wonder what we can do. I love these books. I don't really want to put any away." The second girl said.

"I know. KL Sentral is just 5 minutes away. There's an ATM machine there. We can get some money."

"Good idea. Let's ask the organizers to hold out books while we get some money"

*True verbal history

SecretHistory said...

Okay, I am no economist let alone have a financial plan.

Why would overseas sellers export their remainders to MAlaysia (and is there any other country) and sell them at a lower price than to sell them to MPH or Borders. Isn't it because they are not wanted.

For example, I saw two copies of Bret Easton Ellis "Lunar Park" (a fairly recent book for sale at RM20 but the perforated cover with holes to spell on LUNAR PARK is torn (they are easily torn anyway). Perhaps it is because these books are not new though recent. Like Reject Shop.

bibliobibuli said...

anon - imagine that you are an independent bookseller for a moment. You have brought in lots of stocks selling at current market prices. Then down the road there is a warehouse selling the titles you just bought at rock-bottom prices. Is that all right?

yes, exactly. perhaps some of you noticed that many of the titles in the big bookshop warehouse sale are still on sale at full price in the bookshops?? which are you going to go for? no contest.

jen - guess the big hoo hah is about whose pockets the money goes into.

right. the good thing about warehouse sales is that they do so much to put books in hands. and in the big bookshop warehouse sales, and often the choice of titles is superb.

i think most people have a budget for books, certianly financial limitations on what they can spend. now if you spend RM200 in a warehouse sale in one month, are you still going to trog along to the bookstore in you local shopping mall and buy full price titles.

and it isn't only the financial consideration. you have got to find space to accommodate those books and time to read them (unless you become, like me, a greedy horder)

money, space, time are all finite resources

secret history - *sigh* that conversation sounds like me ...

as for the why of v. recent books being remaindered - i suspect one has to look at changes in the way that books are retailed in the supermarkets in the uk at bargain basement prices (thus, incidentally, undercutting the bookshops and forcing Borders out of the uk, Waterstones to cut back on book retailing and independent bookshops to close). the supermarkets presumably treat books like any other supermarket commodity - buy in bulk, pile 'em high, sell'em cheap and observe the sell-by date. after a week or two or three they bring in new stock and remainder the old. i've heard that some books are remaindered these days in as little as two months!!!!!!

the second hand books which pay less sells also are bought by the container load v. cheaply. i've heard that these books would otherwise become (shock horror) land-fill because the US simply has an over-abundance

actually i would love to know exactly how all this works ... the above is from putting a, b, and c together and trying to make sense of the whole picture. would love to hear from folks in the book trade (here or overseas) who are able to make more sense of any of this ...

SecretHistory said...

Now instead of overprinting these recent books which no one wants, better to reprint some those good ol' days books like (shouting at the top of my voice) "Time for a Tiger" in pink covers with a songkok'ed man and a bottle of Tiger.

bibliobibuli said...

secret history - sadly that's not the way things work in the book industry ...

but oh how i'd love a copy of "time for a tiger" like that!!!!

SecretHistory said...

Be careful of what you wish for Sharon, there's a copy for AU$999. That could feed the whole of Somalia for a day.

bibliobibuli said...

someone i know picked up a first editon copy of the second book of the trilogy for RM1 in a second-hand bookshop in ipoh recently!!!

SecretHistory said...

Is that the one with the Sikh pulling a trishaw (Burgess was horified!)?

See if he/she is happier one year later.....

Anonymous said...

Not only that, Sharon... now that people know they can get books dirt cheap every 2 months or so, they're probably holding back their regular purchases until the next blog booksale.

I know some of my friends are doing that.

bibliobibuli said...

secret history - i don't know ... and didn't know either ...

anon - i think you're right.

amaruhizat said...

Sounds like a chicken and egg question, which comes first? Book consumers or book retailers?

So how now? Save the readers or book retailers?

As a consumer, I fully support warehouse sales as I prefer to eat maggi mee than bookpages on my monthly budget crunch time. I could survive for a whole week solid with RM 40.

From business point of view, why not standalone retailers form strategic partnership, co-operate, and establish a consolidated purchasing system?

In grocery retail industry, and printing industry—the more you can buy in bulk, the more you’ll save.

Though books are not grocery items, still, there are chances book retailers sometimes cross path when they buy their stock (the same publisher/suppliers/wholesalers) or buy different titles from one publisher.

Let say there's 3 bookshops and one purchase source.

If they co-operate, instead of buying 50 books to stock a single shop from the source, three bookshops combined could synchronize a compiled list and buy 500 books from the source.

There is chance on getting more discount due to larger amount of purchase. Franchise outlets did it.

Amaruhizat

Jen said...

secrethistory:
Those teenage girls have a lot of pocket money! :) Seriously, I got maybe RM20 a month when I was a teen, and that wasn't all that long ago.
Well, from what I knew, those remaindered books are the results of when publishers print too many books (those people don't always know how many books they'll sell). Publishers also usually have agreements with bookstores (in the US, anyway) that they'll take back all unsold merchandise. So, when they take back the unsold books, they can either ship them halfway round the world, or dump them.

As Amaruhizat says, why don't the indies get in on the act? They could buy remaindered books too. Bring those books "on tour" round Malaysia (people read in places other than the Klang Valley, you know). When I was a kid, there used to be these "book exhibitions" at the local Chinese community halls for Chinese books and they were pretty successful. Why not do the same for English books? Also, sell the books online - with relatively cheap Malaysian postage, you could make money from those (irony of ironies) Americans who dumped those books in the first place.
Alright talk is cheap. Maybe I'll go buy a book from an indie today. :) (But I wouldn't have when I was a teen on RM20/month)