To Attract New Players to Our Industry, We Need Fixed Canadian Pricing
While some stores were replaced, 2014 saw significant store closings in Winnipeg, West Toronto, Windsor, Belleville, and a major announcement regarding an Ottawa closing in just a few weeks. When stores close, the industry as a whole in Canada is poorer. Yes, some consumers are simply buying online, but not every customer from a closed store immediately commences shopping websites. Our interviews with customers has shown that not only do some not have computers, a few don’t even have credit cards.
So store closings affect everything from supplier efficiency to the word-of-mouth promotion generated when lots of people are reading lots of books.
But today’s potential store owner isn’t the same as those who got into Christian bookselling 90, 60 or even 30 years ago. There is a much greater awareness of business principles, not to mention basic mathematics, and at the end of the say much boils down to this question:
Who would want to invest in a physical inventory that has a true wholesale value that fluctuates up and down with the U.S./Canadian dollar exchange rate?
Right now, prices are on the part of the parabola that curves upward. But it’s happening at time our industry has undergone intense price competition. A 10% difference earlier in the year could be overlooked by customers conscious of the U.S. pricing, but as the graph above shows, when you factor in the 2.55% your bank is charging you for currency exchange, the 20% difference is insufficient. Watch for conversions to 1.2500 to happen before the week is over.
But this time around that’s not going to go over well with customers. It’s a different retail climate. It’s going to kill business, and seriously temper the enthusiasm of retailers to do the typical January restocking.
Much of the situation is tied to the copyright act, to royalty contracts and what happens in the larger book industry. Canada is a foreign market where it suits the purposes of publishers — i.e. allowing us to have International Trade Paper Editions (ITPEs), but not allowing us to have SuperSaver pricing — but overall is considered part of the American domestic market.
Our prices therefore follow the U.S. prices.
But this situation does not have to be. Suppliers can easily negotiate special pricing on a greater number of titles than we’re seeing now, where the occasional hardcover gets cut-rate pricing where this no ITPE. Suppliers can also negotiate lower pricing on a wider range of titles, thereby creating a Canada-wide equivalent to the SuperSaver price system.
You see this happening in the U.S. now where a number of Zondervan, Thomas Nelson, and FaithWords titles are currently available for $5.00.
That would be a start. But we need more.
We need our suppliers to start negotiating for an entirely fixed price system for the Canadian market.
If just a few independent publishers can make this happen, the large, multi-nationals will be forced to reconsider the market share they will be losing. And here’s where I want to be very bold: If those same large corporations see the Christian part of the industry as a microcosm of the whole, it could just be a change agent that begins a process where literary agents are forced to reconsider their tactics.
While our industry is just about dollars and profit, and while it involves a calling to serve that overrides financial considerations, the point is, from a fiscal viewpoint, new players would have to be crazy to enter this industry the way things are right now. Nobody would sign on for this if they fully understood the risks.
And here’s the bonus for the Canadian suppliers: They would earn 100% loyalty, no store would buy around from U.S. distributors or large U.S. retailers offering titles below Canadian wholesale.
There are two ways you can rattle the cages of your suppliers: One is the old fashioned route of making calls and writing letters and emails. The second is more straightforward:
If it’s not genuine bargain that allows you to sell titles at prices competitive enough to win back U.S.-buying customers, then don’t buy it. Not one unit. Not one title.
Just say “No.”