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Jul 27, 2011

Death of the bookshop: what you pay for when you buy local

Many book lovers might choose to shop locally rather than on overseas websites if they had the chance to ponder some of the implications of their decisions, says editor-in-chief of Bookseller+Publisher magazine Matthia Dempsey.

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Early this year, I did something I had always sworn I’d never do. On a quiet, late-night hour I set foot in IKEA, wandered its furnished labyrinth and behemoth aisles, and came away with four Billy bookcases, which my boyfriend and I spent the next day assembling and loading with the books that were overflowing from our other, less-disposable shelving.

IKEA. Now there’s a company that understands price-points, starting with the price range it believes consumers will pay for its items and then working its way backwards to create objects at those prices. As we stood before the rows of bookshelves, I noticed several signs informing customers that, due to IKEA’s buying power and recent negotiations with suppliers, the price of Billy bookcases had actually come down in the past year.

Later, we passed full-sized kitchen clocks priced at three dollars. Back at home, once we’d negotiated the Allen keys and drilled in a couple of holes the IKEA-bots had missed, we filled our entire wall with bookshelves for $300. This was the global economy at work, and I was a part of it.

The Book Depository is the global economy at work, too. Don’t get me wrong: I’m not comparing half-baked furniture with books. The similarity lies in the fact that they are both rational outcomes of a global market in which price is the defining consideration. Like IKEA, The Book Depository is incredibly efficient and, like IKEA, it is particularly efficient in terms of price — thanks, in large part, to the power of scale (The Book Depository’s managing director Kieron Smith said in 2009 that his company is “a volume-led business, and we can get very good deals with couriers as we are shipping upwards of 130,000 products per week”).

The difference is that while I’ll occasionally put up with the many things I don’t like about IKEA in order to get my furniture cheap, The Book Depository and its Amazonian siblings don’t get any of my business. Why? I care more about books than about the furniture they are stacked on.

Obviously, I have a vested interest in my consumer dollars going to local bookshops – I edit a trade journal for the Australian book industry. Without that industry, there will be no magazine. But my interest in this issue extends far beyond ensuring my next pay cheque. My job has given me an awareness of the chain of production for books that I otherwise wouldn’t have had. It’s this understanding of the trade as it currently stands — and what’s in it for me — that influences where I buy books. In this sense, I see my decision to purchase books in good local bookshops, as opposed to online UK megastores, as a self-interested one. I like those shops and the local publishers they support, and I want them to stick around.

So what do I think I’m paying for when I buy my books locally? Well, taking my bookshop of choice, Readings, I’m paying for online and in-person recommendations and reviews; the physical space the store provides to meet and browse with friends, discussing books or the ideas they provoke; an undeniable sense of community which extends beyond the realm of the book; the very act of collation that highlights books I am interested in among the thousands more around; and — through the Readings Foundation — financial support for an adult literacy program at Melbourne’s Western Suburbs Indigenous Gathering Place, educational scholarships for disadvantaged students, a tutoring program for children of migrant families from Sudan, a regional programming stream at the Emerging Writers’ Festival and several Victorian Writers’ Centre residencies (which I like thinking I might experience one day), as well as many other great projects.

My interstate ‘locals’ include the hive of literary activity that is Avid Reader in Brisbane (a bookshop that has produced several authors from its ranks of staff, all of whom have their literary ears to the ground on readers’ behalf), the beautiful Riverbend Books across the way in Bulimba, whose owner Suzy Wilson founded the Indigenous Literacy Project and hosts wonderful author events on the store’s huge deck; Gleebooks in Sydney, which fosters a sense of community around reading — where the launch of a Harry Potter book, for example, might be cause for a special steam-train ride and picnic for young fans (and where owner David Gaunt’s contribution to his community was recently recognised when he was made a member of the Order of Australia).

At these and other great bookshops around the country I encounter engaged staff, author events — and in some cases, whole writers’ festivals and book fairs (not to mention the best cards and gift-wrapping going). And that’s in addition to the books themselves.

When it comes to the books, I know my dollars are also serving me in the long term: when I buy from my local bookseller — whether the book I am buying is Australian or not — part of that money is almost always going to a local publisher. They, in turn, are ensuring both that fantastic overseas titles continue to be brought to my attention (such as Every Man in this Village is a Liar, whose author Megan Stack visited Australia for last year’s Byron Bay Writers’ Festival thanks to her Australian publisher), and that books of social and cultural import, like local writer Chloe Hooper’s The Tall Man, continue to be published.

The importance of local booksellers to small, independent publishers was demonstrated recently when the Small Press Underground Networking Community (SPUNC) worked in partnership with a local retailer (Readings) to make its members’ ebooks available to consumers. At a time when small presses are increasingly branching out in promotional strategies, reaching niche audiences through social networks — as so many pundits suggest publishers will need to do in the future — the continued necessity of bricks-and-mortar booksellers is evident in this decision to partner with Readings on their ebook venture.

I’m not saying that some of the benefits provided by Australian bookshops mentioned above are not available online from overseas; I’m saying that, given how much I value them in their current form, and given the broader gains I see along the chain of production, I choose to factor these benefits into my purchasing decisions. And I suspect many who feel the way I do about their local bookshop and local publishers might choose to shop locally rather than on overseas websites if they had the chance to ponder some of the implications of their decisions.

Like looking for local produce at the supermarket or choosing locally-designed and made clothing, I’m shopping for my books with an awareness of the bigger picture. The phrase ‘ethical consumption’ surfaces with regard to a range of other goods, and in the simplest sense it should apply here. I’m not talking about human rights, animal rights, the ethics of life-and-death, but that very simple, individual question of whether my book-buying habits are compatible with my broader life values. Whether my decisions and actions are contributing to the kind of world I’d like to create — or to something else entirely.

To me, the assumption that so long as prices are getting lower the consumer must be benefiting is a pretty naive one. Something that is often assumed when modelling economic behaviour is that an individual has ‘perfect information’ on the outcomes of their purchasing decision. While few would argue anyone can ever have truly perfect knowledge of such outcomes, it doesn’t hurt to try to add to the data.

In the United States (where the number of independent bricks-and-mortar booksellers has reportedly dropped from around 6000 in the 1990s to just over 2000 at present), remaining booksellers have a whole campaign built around this — it’s called IndieBound, a movement that identifies local independent shops (booksellers or otherwise) and thanks customers for shopping in them, using a number of mediums to highlight the wider benefits of their purchasing decisions.

Indiebound was officially launched in Australia at the Australian Booksellers Association conference over the weekend.

Some will try to tell you that it’s impossible for Australia’s book industry to do any better on prices. It’s not true. There are aspects of the local and international book industries that are incredibly inefficient — the supply chain for non-Australian titles being one example. Too often, local publishers or distributors hold exclusive rights to overseas-generated titles but do not hold stock, preferring to import from overseas. As these publishers wait to receive enough local orders to fill a pallet (and thus save on freight), local orders from booksellers can take weeks to fulfil. Such inefficiencies present a complex challenge, but not an insurmountable one.

When the government announced in 2009, following a report from the Productivity Commission, that it wasn’t going to change Australia’s laws regarding the parallel importation of books (that is, it would uphold the status quo which says a bookseller cannot import a title if there is a local supplier for that book) it made its stance clear: “If books cannot be made available in a timely fashion and at a competitive price, customers will opt for online sales and ebooks.” Put simply: the government didn’t need to change legislation to ensure competition, ebooks and the web were already doing that for them.

Last Christmas, almost half of Australian booksellers my publication surveyed reported sales had dropped compared to the same time the previous year. Many of them also reported customers in-store talking to each other about The Book Depository, or seeing browsers take photographs of the books and their ISBNs — in order, presumably, to go and buy them elsewhere online. And while some in the industry blame the group’s woes on poor management, there’s no denying that REDgroup Retail’s demise has highlighted some of the pressures facing all local booksellers.

Certainly, publishers and booksellers will have to lift their game. Any bookshop without an online sales facility and an excellent online search function is condemning themselves to oblivion; those bricks-and-mortar shops that do provide online sales report increases in that area year after year, while exclusively online booksellers here (who, by definition, funnel all their efforts into online business) are reporting exponential growth — with sales up 800 per cent, in one case. Shops that have survived without knowledgeable, egalitarian and friendly customer service (and yes, some have) won’t for much longer.

Booksellers who have entered the game because they romanticised a life surrounded by books and eschew necessary business management considerations will go, if they haven’t already; the rest will need to focus on their points-of-difference in a way they never have before. These stores will also have to get better at thanking their customers. If a result of community discussion of this topic is that a customer makes the decision to buy local, they should be genuinely and regularly thanked for it at every point in the transaction, whether it’s in-store or online (as IndieBound encourages US bookshops to do).

Publishers, on the other hand, face the enormous challenge of shifting a century-old and rapidly outmoded business model while simultaneously trying to stay afloat — not unlike attempting to steer a slow-moving ship around an iceberg. They will be mixing print-on-demand and short-run printing into a business model that was built around the initial multiple-thousand-copy print run necessitated by traditional print technology.

The supply-chain earthquake that ebooks will cause aside, the tide of consumers who don’t care if their bookshop disappears, replaced by an IKEA-sized book factory on the other side of the world, will be enough to force the local industry to change. So have no fear: the book industry will adjust itself. At the same time, those of us who care about more than price should buy with our eyes open, knowing that with our purchases we are also, in part, choosing the kind of local bookish community that is left at the end of that process.

Inevitably, there will be winners and losers. Because even though the industry as a whole will become more efficient, not all the factors cited by the local book trade as reasons for Australia’s prices can be solved. The issue of basic wages, the challenges posed by a small population, the high cost of retail and office space: these factors won’t disappear. Which means, if price is genuinely all we care about, most of our bookshops will.

Instead of subscribing to a position that says price will be the only deciding factor in who wins, I’d like to recognise that I have a role to play in choosing who I’d like the winners to be. I would like to be one of them. I would win by getting to keep my local bookstore, which brings me much happiness, great local publishing and, ultimately, economic benefit. I would like the losers to be the Ikeas of the bookselling world, the ones that offer nothing above and beyond price and convenience. And so I shop accordingly. When it comes to books, anyway.

When I was a toddler my father was a carpenter, making furniture on commission. I remember playing in the wood shavings of the converted stable in Flemington that he used as a workshop. The other day he visited our home, and when he saw our new shelves he stood, momentarily, in that kind of reverie people experience when some part of their former life returns unbidden, like a curious surprise. He ran his hands along the melamine, and began telling us how he used to measure up spaces like our wall, built shelves like our shelves – though out of actual wood and with none of those little IKEA holes.

With his big carpenter hands resting on one of the shelves, he calculated what something like this bookcase would have cost to make back then. Of course, he said, even then he never really made any money, because things had already begun to change. Today, even if we had asked my father to make those exact crappy shelves for us without charging for labour, he wouldn’t have been able to beat IKEA’s price. Such is the bulk-buying power available in the contemporary global market.

One day, the continuing growth in ebooks suggests, I may well choose to have most of my library on my computer rather than my wall. Recommendations and reviews and conversation about books might have moved entirely online, along with most of the books themselves. If that happens, I’ll be considering a whole new set of values and factors in making my book-purchasing decisions. But for now, I’ll continue to spend my money on the thing I value most — which is having wonderful bookshops here in my small part of a very big world.

Matthia Dempsey is a writer, reviewer and editor-in-chief of Bookseller+Publisher magazine.

This is an extract of ‘Meaning-of-life Type Stuff: The Survival of Australian Bookshops‘, which appears in Issue Five of Kill Your Darlings. Purchase the issue here.

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36 thoughts on “Death of the bookshop: what you pay for when you buy local

  1. RamaStar

    “there’s no denying that REDgroup Retail’s demise has highlighted some of the pressures facing all local booksellers.”

    I think REDgroup’s demise highlight the pressure all local retailers are facing, not just the book/publishing industry.
    It also highlight how it’s not a good idea to debt leverage a company up the wooza, and have it run by poor management/private equity firms.

    But Matthia, thank you for your piece it was nice to read some positivity about the book industry, there is far too much negativity at the moment, and too many uninformed individuals talking about ‘price’ and the death of publishing/book industry.

    You’ve pointed out rightly so many good points about the local industry the one I liked the most is reference to the publishing industry “They, in turn, are ensuring both that fantastic [local and] overseas titles continue to be brought to my attention… and that books of social and cultural import… continue to be published.”

    This argument I think applies the same to parallel importation rights. Without these laws, we would see a reduction in the amount of local content published.

    Your point
    “assumption that so long as prices are getting lower the consumer must be benefiting is a pretty naive one. Something that is often assumed when modelling economic behaviour is that an individual has ‘perfect information’ on the outcomes of their purchasing decision.”
    Is also excellent. Something again that is so often overlooked, especially by those that carp on about buying online overseas.

  2. Simon Mansfield

    Wow what a value loaded article – on the one hand Matthia is happy to hand over hundreds if not thousands of dollars more a year to a local bookshop than would need be the case if purchased online, but then is not willing to spend a few hundred dollars extra on some quality bookshelves made from real wood that doesn’t sag or comes apart after a few years in Sydney’s heat and humidity as Ikea shelves invariably do.

    When you buy the a book from an online store or from a bookstore you get the exact same merchandise – or more often than not the hardcover version printed on quality paper if bought online from an overseas print run – rather than the junk our local publishing houses sell at double the price – meanwhile if you buy cheap bookshelves from Ikea you get junk pure and simple – whereas if you buy a slightly dearer one made from solid pine you get something of quality that will last 30 years or more.

    Seriously, if you want to care about the value chain and ensuring that local employment is kept strong – save money buying books online and use the saving to buy a quality bookshelf from a local shop made from local timbers, fashioned into a long lasting piece of furniture by a local tradesperson.

    If anything this article is an object lesson in the elitist values that so many on the Right side of politics bash us Lefties with day after day after day. But the real kicker is that it’s okay to have a protectionist racket in place to protect local publishers but it’s perfectly okay for a manufacturer like Ikea to flood the market with their crappy furniture that if the Dept of Fair Trading actually did it’s job would require that a sticker be placed on all Ikea products saying this product will most likely break and be unusable with two years. Moreover, local publishers should be required to place a sticker on their locally printed paperbacks saying this book will last no longer than 10 years before its binding dries out and the spine breaks when opened.

  3. freecountry

    I browse books without knowing what I’m looking for. Sometimes I’m after something in particular, but usually I’m just scanning for something to catch my interest. If the first page and a random page or two make me curious, we have a deal. The range of amazing books, authors and subjects that have opened up to me in this way, goes far beyond anything I ever could have discovered by any method less random, such as following the recommendations of others.

    Online shopping can never give me that. Oh, they try. Points for effort. But the heuristic algorithms of “other buyers who like what you like also liked …” leave me cold, and most of the online chats about books are narrowly stuck in genres, like non-fiction books of just the right political flavour, or novels about serial killers. (Did you ever read the one about the serial killer who starts stalking the profiler who can think like a serial killer?) I get the sense of bookreading communities frantically building echo chambers for themselves in which an author’s only means to success is success itself.

    Some people I know go online for the meat-and-vegies books when they know what they want, and make occasional forays into bookshops for variety. This is where Matthia’s point becomes crucial: such people need to understand that to a certain extent they are urinating in their own well, because the physical bookshops cannot long survive without the high volume meat-and-vegies titles.

    I do it the other way round, going online for a particular title only after I’ve given the bookshops every chance to supply it. This is pure self-interest on my part; I’m not interested in making any philanthropic donations for some book retailer’s sob story. But I do become poorer–quite literally poorer, in the sense that my money can no longer buy what it once could–every time I go back to an almost-forgotten bookshop I used to haunt, only to find that it’s dead and gone while my back was turned and a vitamin discount store has taken its place.

  4. Hawkwind

    I have worked in retail for the past decade, most of that time in specialist shops – books and otherwise.

    I will not disagree with anyone who states that changes need to be made in the Australian publishing industry – books are often too expensive in this country through the local publishers and distributors. But for those of you who believe we can match the cost of overseas books – it’s just not going to happen.

    An average discount from a US distributor is 40% to a retail store, whether it’s in the US or Australia doesn’t matter. Freight is about $6.50 per kg. So, if a store buys a book that has a $10 RRP in the US, it costs $6. If it weighs 300 g (not unusual), the cost is now about $8. Then there’s GST, so now it’s nearly $9. So it’s almost the same cost to land it in Australia as the RRP in the US.

    Now you have to add the local expenses. Wages in Australia are expensive – retail assistants in Australia get paid around $18-20 per hour, those in the US get paid $7-8 per hour, so that’s 2 1/2 times the cost. Retail rent is incredibly expensive, particularly in Sydney and Melbourne. Cost of living in Australia is higher than most places in the world. And the store owner, well he probably wants to make some money also. So, in order to get the same benefit that a US store owner gets by selling the book at $10, the Australian store owner has to sell it at $18.

    So for those of you wondering why a book in Australia is nearly twice the price that it is overseas, there’s your answer.

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