Are publishers aiming for volume sales, rather than profit?

[pambaddeley]

Yes, it would have sold less. £3.85 is a significantly different price point than almost a fiver. It's less than a magazine. When a consumer is standing with their trolley trying to decide what merits a purchase, over a quid is significant.

They will not be selling it at a loss. The unit price will be low. Shipping will be the main expense after that. They do deals with the retailers - who may agree a low margin for that, but a higher margin for other stock in the same order.

If a publisher wants to be stocked in a supermarket chain they have to agree the market's margins. If that is a low margin, it might well be worth it in order to get their lines listed, and the exposure. But the market drives the price, just as it does for milk, and food and anything else we buy in a supermarket. The option is not to have the title there, and that would be crazy - because more volume and exposure comes from the supermarket than anywhere else.

I don't see it as an issue at all. I see it as market forces - and in this case, the supermarkets are king. If they want a low margin, they'll get it.

Yes it's been like this since the Net Book Agreement was scrapped; supermarkets have the publishers over a barrel. So the giving away of this book with the DVD is more of the same really.

 

[Lew Rockwell Fan]

As an brick-'n-mortar retailer of long experience, I can confirm that ANY price difference that changes the digit to the left of the decimal, changes sales volume, even if the difference is very small. That is why you see all those magic 8s and 9s to the right of the decimal.

 

[Brian G Turner]

???

And now £1.99 for a paperback by a best-selling writer:
The Grownup: Amazon.co.uk: Gillian Flynn: 9781474603041: Books

 

[ratsy]

That is a short story, and I would assume that would be there loss-leader to get you into Gillian Flynn - much like giving the first ebook of a series away for free. But still...it must cost something to print, and after amazon's cut, they can't be making any money

 

[Brian G Turner]

Ah, right - short story it is! My bad - I've been enviously looking at a string of cheap novels this evening, restraining my spending until later in the year.

 

[Brian G Turner]

Was browsing the paperback bestsellers in Sainsburys, then realised every single one of them was priced at £3.99.

I could, perhaps, understand it if publishers were only selling clearance stock - but these are bestsellers, ie, expected to sell well regardless. I just can't get my head around how publishers complain about struggling to get buy, while practically giving away their most popular products. It looks to me like aiming for short-term goals and sales targets, rather than long-term business development driven by profit.

I also fully expect to see it covered in the news late this year/early next year about a surge in book sales, and how this means the paperback market is recovering, and yah-boo to ebooks. Only thing is, those reports will almost certainly limit themselves to talk of unit volume, not profit per unit.

£4.99 I could understand, but £3.99 - and less - is just ridiculously cheap for a novel.

 

[Ray McCarthy]

bestsellers in Sainsburys

Supermarkets price differently to other sorts of shops. They pressured Publishers. As they pressure Milk providers etc.

£3.99 - and less is just ridiculously cheap for a novel.

In volume they are 50p to print.
Supermarket Mugs 20p
No doubt the supermarkets only want best sellers and have to take higher volume than bookshops. It's possible they can't make returns either.

 

[ralphkern]

There is some very interesting data coming out of the author earnings reports which may go some way towards providing at least part of the answer to this one.

May 2016 Author Earnings Report: the definitive million-title study of US author earnings – Author Earnings

The 27 month market share of Ebooks has plummeted for Big five published work (although seems to have arrested in the last couple of months).

This is the inverse of what is happening with Indie published, which has shot up. It would seem quite logical to me that the Big five would seek to find ways of wrestling some of that market share back. The Big Five need to bring the customers back to their battlefield, which is print. Part of that has to be books (and their Ebooks) becoming competitive again. That means reducing prices.

This is combined with the fact that Indies have, especially over the last year or so, really upped their qualitative standard. It is no longer the case where Big Fivers can be confident their work is actually any better. (Certainly within the best seller lists). I certainly know that if I were pressed to give a top ten authors, the majority would be Indies.

 

[Brian G Turner]

They pressured Publishers. As they pressure Milk providers etc.

Yet all the Playstation and Xbox games are full price - no significant discounts there.

The 27 month market share of Ebooks has plummeted for Big five published work

I keep finding bestsellers which are cheaper in paperback than in ebook - £3.99 or less for p/b vs £4.99 ebook as common. IMO it's clear publishers are pushing on selling physical units, and in volume. Outside of the bestseller lists, ebook prices by trad publishers are often ridiculously high, and it's not uncommon for the paperback price to be very similar. Personal observation, rather than objective data, though.

 

[Ray McCarthy]

Yet all the Playstation and Xbox games are full price - no significant discounts there.

More a niche sale for supermarkets. Greater domination of online.
Books are often impulse buy in supermarket. Games not really?

Bestsellers from trad publishers may be less than half regular price for paperback and double regular eBook price. They obviously think the paper edition is the real market and eBook "icing", whereas it's the other way round for SP and Indie. They are making a big mistake on eBook pricing considering eBooks is now 30% by SALES value.

 

[ralphkern]

I keep finding bestsellers which are cheaper in paperback than in ebook - £3.99 or less for p/b vs £4.99 ebook as common. IMO it's clear publishers are pushing on selling physical units, and in volume. Outside of the bestseller lists, ebook prices by trad publishers are often ridiculously high, and it's not uncommon for the paperback price to be very similar. Personal observation, rather than objective data, though.

True dat, and curious too. My two thoughts on why that could be are:

1. They are content with using their best sellers to try and adjust more customers buying habits back to print. I doubt it'd be loss leading, but they're happy to take the hit on money there, knowing they'll make up short fall from the midlisters.

2. We are merely part way through 'phase one' of some kind of strategic business plan which prioritises the big earners. In a few months we could see price reductions trickle down to midlisters authors.

Obviously supposition.

 

[pambaddeley]

Was browsing the paperback bestsellers in Sainsburys, then realised every single one of them was priced at £3.99.

I could, perhaps, understand it if publishers were only selling clearance stock - but these are bestsellers, ie, expected to sell well regardless. I just can't get my head around how publishers complain about struggling to get buy, while practically giving away their most popular products. It looks to me like aiming for short-term goals and sales targets, rather than long-term business development driven by profit.

I also fully expect to see it covered in the news late this year/early next year about a surge in book sales, and how this means the paperback market is recovering, and yah-boo to ebooks. Only thing is, those reports will almost certainly limit themselves to talk of unit volume, not profit per unit.

£4.99 I could understand, but £3.99 - and less - is just ridiculously cheap for a novel.

When I used to attend writers conferences, publishers reps/editors told us that this was all down to the abolition of the Net Book Agreement in the UK. The publishers realised too late that the supermarkets would then have them over a barrel and force them to do mass discounting, with the resulting drop in profits to both them and the writers.

 

[Kieran Song]

Maybe it's to compete with all the Indy authors who are publishing their works at 0.99. they're forced to compete now.

 

[tinkerdan]

All indications are that they are still in denial that there is a threat.

Maybe it's to compete with all the Indy authors who are publishing their works at 0.99. they're forced to compete now.

These types of discounts fall more in line with business as usual; though to us they might look unusual.
If they ever do feel threatened and respond I'd expect a more gradual reduction of prices; searching for the Goldilock zone.

 

[Ray McCarthy]

Maybe it's to compete with all the Indy authors who are publishing their works at 0.99. they're forced to compete now.

Smashwords surveys suggest that 99c (US) doesn't sell that much more quantity than $2.99 or $3.99 (which are similar) and sometimes less. USA $1.99 is worst price break.
I suspect the price breaks in Euro and Sterling and Australian dollars are bit different.

 

[Brian G Turner]

There's a stand of novels in Sainsburys - including a few Conn Iggulden Mongol and Emperor series novels - all going for just £1.99.

Amazon has only matched the price for one of the ones I checked:
Lords of the Bow (Conqueror, Book 2): Amazon.co.uk: Conn Iggulden: 9780007201761: Books

My initial thought is that publishers are desperate to report a rise in print sales at the expense of digital, even though it means they'll end up reporting a loss.

However, my second thought is that it's little different from a self-pubbed 99p promotion on Amazon for ebooks - that the publisher may be intentionally selling discount books by established authors, on the grounds that the upsell will be worth it as readers buy into other books by those authors.

I have to admit, that tactic has merit - I've not been tempted to read Conn Iggulden before now, but at just £1.99 a paerback I've severely tempted to dip into each just as a taster.

 

[tinkerdan]

Baen books has done this, they have had what they call limited editions that are priced at 1.99 US from established authors older works and you would be correct to say that those were done to draw new readers.

Once a Hero, Limited Edition: Elizabeth Moon: 9780671578428: Amazon.com: Books

 

[Brian G Turner]

Well, it did work on me.

I ended up buying the Conn Iggulden's first 2 Ghengis Khan novels, and one of his Roman ones (I would have bought more in that series, but there was only the one book).

 

[Brian G Turner]

I also fully expect to see it covered in the news late this year/early next year about a surge in book sales, and how this means the paperback market is recovering, and yah-boo to ebooks. Only thing is, those reports will almost certainly limit themselves to talk of unit volume, not profit per unit.

And just as I predicted, this is exactly what was reported last month:
'Screen fatigue' sees UK ebook sales plunge 17% as readers return to print

Sales of consumer ebooks plunged 17% to £204m last year, the lowest level since 2011 – the year the ebook craze took off as Jeff Bezos’ market-dominating Amazon Kindle took the UK by storm.

...

Print sales of consumer book titles – fiction, non-fiction and children’s titles – rose almost 9% last year to £1.55bn. The total UK print book market, including non-consumer areas such as journals, rose 8% to a five-year high of £3bn.

“We saw a very marginal increase in overall print sales in 2015, but last year people flocked back to print in droves,” says Lotinga.

Except that, bizarrely, the commentary in the Guardian claims this is due to "screen reader fatigue" - rather than due to the pricing model I highlighted above, which clearly favours paperbacks for bestsellers over their digital editions.

 

[Gary Compton]

I have seen this first hand. 2016 was a brilliant year for ebooks for TBP but 2017 is poor.

Because paperback improvements are mostly in the bookshops, I haven't seen an increase at all in print sales.

Time to scratch head...