The price of imported books: princely or pared to quick?

Press, 26 February 1983, Page 19

The price of imported books: princely or pared to quick?

By

NEILL BIRSS

The price of- imported books has led to a request to the Examiner of Commercial Practices for a re-examina-tion of booksellers' price maintenance. Booksellers have legally been able to apply standard pricing since the Trade Practices Appeal Authority upheld the practice in 1961 because of what it considered the special nature of the book trade. Dr Andrew Carstairs, a linguist in the Department of English at the University of Canterbury, is the man who has taken the matter up with the examiner. He believes that booksellers' mark-ups may be unnecessarily high, and work against the shops because many users of specialist or technical books find it cheaper to buy from overseas retailers. He bases his assertion on experience in ordering specialist books, which he says seem often to be cheaper posted to New Zealand by a British retailer than ordered through a local book store. "This is surprising in view of the inefficient way of obtaining the book from Britain: a single copy by post." Dr Carstairs contacted the Booksellers' Association, his • member of Parliament, and the Minister of Trade and Industry. Mr Templeton. The upshot is that the Examiner of Commercial Practices is - considering whether there ■ should be a new look at I price maintenance by the I trade. j Many of the acquaintances j of Dr Carstairs who buy specialist books regularly ‘ have been mailed by British j or American retailers. He suggests that the pos- , tage on individual orders is 1 much higher than the freight cost per book would be in a consignment of titles, and that overheads of overseas shops would include wages and rent as high in most I cases as those in New ZeaI land. I Ms Kate Fortune, the II director of the Booksellers' Association, says that there has "tended to be" an erosion of price maintenance in the trade in recent years. “The Booksellers' Association does not try to police it. Certain schedules are sent out for book prices. The members agree to hold to it." The association claims to have all but a handful of the country's booksellers as members. It does not include sellers of paperbacks only, such as dairies and many news agents. The rise of remaindering, or the sale of books at a cut price, is outside the agreement, says Ms Fortune. Remaindering is generally of bulk purchases by individual members, not of the books coming through the normal distribution channels. Remainder books are not covered by the schedule. Another trade practice that irks some readers is the area agreement. This arose from the days when American and British publishers split the English-speaking world between them, agree-, ing not to compete in each other’s territory. New Zealand was British territory, so New Zealanders have had to buy the British editions of books which were available in both American and British editions. Relative prices were not a factor. The practice was ruled against the public interest by American authorities in the last decade, but lingers on, enforced by copyright law. Publishers now control distribution by selling restricted copyright, for certain areas only. A recent development, promising for readers' in its effect on book prices, is the sale of Australasian, or even New Zealand distribution

rights to overseas titles. Special editions of the books are then printed for Australasia, or New Zealand. But the main effect of the area agreement has been that, when the American dollar is cheap, New Zealanders may have to buy the more expansive British editions of books.

"This practice is not necessarily against the public interest. but it may be when American prices are much lower than British ones." says Ms Fortune. The question remains of why imported titles are more expensive than the British price plus the cost of freight.

Mr David Cameron, of the Scorpio Bookshop, Hereford Street. Christchurch, imports many titles for his stock, and tends to cater for interests only modestly served by general bookshops (for example, alternative lifestyle, Japanese and Latin American novelists in translation, feminism, science fiction, and the occult). . Most of his indenting is from the United States. Unlike the bigger American bookshops, he generally has to buy from wholesalers rather than direct from the publishers, who are not enthusiastic about handling single or even small orders. The maximum discount he gets on the American retail price is about 40 per cent. Many of the bigger bookshops in America obtain discounts of 45 to 50 per cent through bulk buying.

On a book that costs him $U59.95, he must allow about 10 per cent for postage to New Zealand. David Cameron estimates that by the time he has the book in his shop, his margin on the American retail price is less than 10 per cent. For the indenting, he will have spent time writing letters, contacting customers, and carrying the loss of the odd mis-shipment (the wrong title is sent). The Scorpio Bookshop is busy and growing, but Mr Cameron is not making a fortune. Rates and rent eat about 20 per cent of his gross profit (a figure that varies from his gross margin because it takes account, among other things, of “shrinkage” — the loss of value of stock because it will not sell at full price). Wages, excluding the owner’s, take another 30 per cent of the gross profit, and a further 19 per cent will go on general and administrative expenses, including advertising, insurance, postage, etc. The increase in replacement value of stock, and an increase in titles as the store grows, has to be met from tax-paid profit. Mr Cameron is one of the minority of booksellers who do much indenting from overseas: most of the overseas titles in the shops come into the country through publishers’ branches in New Zealand or through agents. Either way, there is an extra distribution tier to

be supported in New Zealand pricing. The decline in shop indenting began in the early 1960 s and accelerated through the 19705. The cost of imported books has been strongly affected by the rise in the value of the British pound. So much so that many overseas publishers now look for someone to tell them what the market prices are in New Zealand. They ask how much the retailers will be able to pay for the book if they are to sell it. and then estimate how many books they must sell to bring the price down to that level. If the number is considered too much for the New Zealand market, the title is unlikely to be brought into the country in quantity. Publishers are now much more cost orientated, and are under pressure to keep stocks down. Titles that do not sell tend to be remaindered or even destroyed within two years. This compares with the position as recently as the 19605. when a Dunedin bookseller ordered two copies of an interesting title from the Oxford University Press. When they arrived they were part of an edition newly bound from printed sheets that had been held in stock since the 1880 s. The traditional, individual title-ordering bookseller in New Zealand (the type from whom persons such as Dr Carstairs would traditionally buy) is being steadily isolated by marketing trends.

The rise of the mass-mar-ket paperback, with outlets in non-traditional areas has been one obvious change. Another has been the rise of the book chains, such as the London Bookshops, able to use their bulk buying to get better deals. Mass marketers outside the shop trade have arisen: Time-Life and Reader's Digest are two organisations in New Zealand selling strongly direct to the public (as well as through shops). Then there has been the rise of the international books, the Hamlyn and Octopus edition, with lots of colour plates, printed in vast production runs in low-cost countries, with the text inserted later in the languages of the various editions. These books sell cheaply in the mass-market outlets. All of this competition has tended to take the cream away from the indenting bookseller, leaving him or her with the economic skim milk of low-profit individual orders and slow selling “good books.” These booksellers need their margin to keep their nose above the water, most in the trade sav.