What should you be doing about remainders in today’s bookselling climate? Drew Turney asks the main players.
As long as there’s printing, there’ll be remainders. Hype about e-books, print on demand and other aspects of the electronic age led us to believe all books would be produced on an as-needed basis and would spell the end of the remainders industry.
The old chestnut about not wanting to curl up in bed or lay on the beach with a computer is passé nowadays, and while it’s the first thing the reading public pulls out of a hat to defend the printed book, few know about the complicated remainders apparatus in Australia, with several large wholesalers dealing in them exclusively.
Simon Wiltshire, general manager of remainders wholesalers Wiltshire Books, isn’t worried but he does see a need to be more adaptive. In the era of gigantic US chains influencing and (sometimes) outright commanding the print runs on books, the whole field is becoming more controlled with less room for the sort of activity that feeds the remainders industry.
“The way the market’s gone now is that a lot of the publishers are printing to order,” he says. “Therefore the quantities are reduced. In other words, publishers aren’t making as many mistakes. Remainders will always be there, but not in the quantities of old.”
So while electronic and on-demand technologies build (albeit at a glacial pace so far) and the industry continues to morph into a symbiotic publisher/bookseller nexus at the big end of town, how is Wiltshire Books going to survive?
As the sage said, the squeakiest wheel gets oiled. “We’ve become more aggressive and there’s a significant increase in promotional activities,” Wiltshire reports. “In other words, lures in retailer shops – the pyramids and tables out the front. Retailers do more sales with tables out the front and that helps their cash flow. We’re a significant contributor to that.”
So are the Borders’ of the world making a big impact? The more centralised chains there are and the fewer small, local shops, the less market for a wholesaler like Wiltshire. “They source their own stock on the whole,” he says, “but we’re endeavouring to supply the international retailers locally. We want them to buy off us rather than import from the US.”
Despite doom and gloom predictions and trends in book sales, Wiltshire Books’ record shows the opposite – they’ve never stopped growing. The reason why may be because consumers’ entertainment budgets are overstretched by the traditional enemies of the book trade such as the DVD or XBox and, as many that responded to this article said, ‘everyone loves a bargain’.
“Every year over the last 12 years, our business turnover has increased,” Wiltshire says, “It’s simply because we all like to save money and I think retailers are seeing that. Having remainders in store creates the lure for an impulse buy as people are passing by the shop.”
As Meredith Drake, buying manager for Dymocks Booksellers reports, there’s not really a typical remainders transaction, it depends on whether they’re buying from a wholesaler as opposed to a publisher. But she says Dymocks is active in the area, so remainders are still thriving.
“A lot of it happens as a store level,” Drake says. “If a store has a sale or is well known for remainder products they’ll generally go direct to publishers and wholesalers and buy pallets and things like that.
“If we do a sales promotion co-ordinated by head office usually it will be in January or June. If we’re dealing with a wholesaler we’d go to them, do the negotiations and then send out the information to stores. Stores would decide if they wanted to take up the offer or not and then would go directly back to the wholesaler.”
But as Drake also says, publishers are getting a little more on the ball with the possibilities, and the reason seems to be the encroachment of other forms of entertainment onto the books turf. In the new bookselling climate, enticements like remainders are important for ever-longer periods.
“It’s happening more and more that a publisher will send us a list of their next round of remainders and we’ll choose from that list what we think we can do with it. We’ll send it as a group buy to stores, who’ll come back to us with what they want. That used to be only around sale periods. But as more and more stores have a sale table where they turn over more stock we do that sort of thing more frequently.”
So how do remainders work and what can you as a bookseller do to benefit from them? Well, there’s the obvious – it saves them from being pulped and both yourself and the publisher gets money from them, even if it’s considerably less than the original recommended retail price.
But don’t forget the enormous number of people shopping in holiday and sale periods, converging on the stores in the days after Boxing Day wielding credit cards like samurai warriors. In that crazy period you might make more money from remainders than you do from new stock at normal times if you play your cards right, thanks to the sheer volume of shoppers passing by.
Ask any web developer and they’ll tell you a successful website is one that generates an enquiry or contact with a company which eventually leads to a sale. Similarly, using remainders as a lure gets people into the store where they might make a new stock purchase instead of walking by.
And whether it’s one of those tables piled high with dog-eared paperbacks at four for $10 or a more refined approach, you can leverage the potential of remainders simply because of the volume out there and the myriad ways of presenting it.
“What we normally do on a daily basis is have stands out the front with stock that’s been bought in deliberately and stock that’s been marked down so you get your margin mix right,” Dymocks’ Meredith Drake explains. “Also a lot of the stores have a bargain area in the store whether it’s a table or a couple of gondolas. The stores do it to such a different extent, very often it differs between suburban and CBD stores.”
And let’s not forget the stores that buy purely remainders and overstocks, like Basement Books. Owner Tom Reeve’s store sells 10,000 titles of remaindered and slightly damaged books in a large premises a stone’s throw from the Sydney CBD, and there are plenty more like it, with a solid wholesale infrastructure to support them. With 2-4,000 new titles a month, there’s a large market for Basement Books to tap, one any other store could theoretically leverage.
Sure, there’s a lot of dross in remainders – you won’t want a wobbly table of cheesy horror paperbacks out the front if your store known for fine art books.
“There definitely is,” Meredith Drake agrees when asked whether there’s a perception among consumers that remainders is just the rubbish nobody else wants, “but it depends on how you advertise it and the quality of the remainders you buy. We haven’t seen a lot of remainders that you’d put into a quality bookstore but more and more are becoming available. A good example is one where there are overstocks around and because the book was originally a bestseller there’s a perceived value so we can sell it at a decent price too.”
Top of the Heap
So what about the other major stakeholder in the remainders equation, the publisher? It makes perfect sense from a commercial perspective – if you’ve sold 200,000 copies of the latest Harry Potter in the last year, you order another 100,000 from your printer for this year. After you’ve sold 50,000, interest drops off because a) by that time everyone’s bought it, or b) Dan Brown publishes his new book.
Does it make more sense to send 50,000 books to be pulped, or keep selling them to bookstores at a discount, hoping to catch the 50,000 people who fancy reading it but never pay $20-50 for new books?
The answer seems obvious, but Tom Reeve of Basement Books thinks publishers get it wrong, saying simply “They’re not very good at it. [Publishers are] really reluctant to put out their product and they’ll often pulp it instead.”
To Shona Martyn, publishing director of HarperCollins, the reasons are a little subtler. “It depends on the book,” she says, “Obviously as a business it’s best that we get some return, even if it’s only to cover the cost of producing the book or slightly less – It’s desirable for us to get some money back if we can.
“But there are some books where it’s a little sensitive, maybe the author’s well known or we’ve got other books coming up and it’s just not desirable to have piles of their books being remaindered. We might decide it’s better to make no money out of it at all and pulp it. We are a business though, and if we could make money out of it we would.”
So for a field that’s lucky to scrape back the production costs, let alone a profit on the original print run at all, why invoke another player like book wholesalers to add to the cost?
It’s a business model Wiltshire Books make full use of, and the delicacies of remaindering books is one Simon Wiltshire is conscious of. “One of the most important things about our business with our supplier/publisher relationships is that we do not sell a book or promote a book that will affect the trade.”
Wiltshire also appreciates the position of a publisher and remaindering books to wholesale is actually the cheapest route to returns. Few players – from publishers to booksellers – have much time to be concerned with anything else but the bread and butter of the trade. “The publishers do have there own devices to move old stock and do to an extent for certain,” Wiltshire explains. “But because publishers’ sales forces are so busy with new release and front list stock turn, the time it requires to move remainders becomes unprofitable.”
HarperCollins’ Martyn agrees. “It’s a logistical issue. [Wholesale remaindering] is far easier if you’re doing a lot of it. In most organisations there’s a routine for it and a lot of books will get remaindered at one time. It’s probably much more efficient than dealing with a lot of independent, individual bookshops.
“As a general rule booksellers are focused on upfront list and reliable backlist. We still do special deals with particular retailers – if we have too much stock we may do a special deal at a price above the usual remainder price. It’s not remaindering, but it’s still a way of stock reduction.”
So What Remains?
With the potential for everyone to make a little extra, and with print runs unlikely to correspond to the exact amount of copies sold any time soon, remainders will stay a vital part of Australian publishing and bookselling. The profit opportunity is there but the questions remains; are you doing as much as you can to exploit it?