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Posts Tagged ‘International Book Sales’

Canadian Customers Not Prepared To Pay More

February 20, 2014 3 comments

Canadian list prices

It’s not going to work this time.

The market has changed. Competition is fierce. Customers are much more price-conscious. Most important, Canadian customers have become accustomed to seeing US/Canadian pricing which is approximately the same.

The frightening thing about the picture above is that the wholesaler has made no effort to cover up the U.S. price, which is what I think I might have done in the same circumstances. They don’t see the problem; they don’t see an issue; they don’t have to deal face-to-face with customers.

Canadian distributors are caught in a situation devised by U.S. literary agents — i.e. lawyers in disguise — who decided a long time ago consider Canada part of the U.S. market insofar as it applies to royalties. We’re just another territory like Puerto Rico or American Samoa. So every book sold here that’s of U.S. origin has a price that rises and falls with the value of the Canadian dollar. (Or more accurately, the  difference in value; many of the so-called ‘drops’ in the CDN buck are actually bolstered investor confidence in the U.S. economy.)

Customers are caught in the middle of a war they don’t know exists.

So why don’t distributors here speak up on behalf of retailers and consumers? If there is an impact to the present price increases here — and I believe there will be a measurable one this time around — they may be forced to.

Yes, Canada has a more robust economy. Yes, there is a sense in which retailers here need higher MSRPs in order to cover higher rents and higher labour costs. But all the customer sees, when they look at the example pictured above is, “Why do I have to pay $3.50 more?” That’s 22% (21.8) and as of noon today, buying a US dollar costs $1.135 (posted rate of 1.11 plus 2.5% bank charge).

The consumer thinks, “Dollar is 11% higher; book is 22% higher.”

The Canadian dollar has actually been rising on five of the last six trading days. (It’s down today, though.) Did suppliers overreact by switching to a 20% conversion? How did they all (initially) pick that same number? (David C. Cook backed off its original conversion, $14.99 books that had jumped to $17.99 are now at $17.50.)

We just don’t need this. Not now. The timing is not good.

We need a Canadian market price.

We need Canadian distributors to speak up for us and demand a fixed Canadian market price.

STL’s Position re Canada Raises Questions

January 10, 2011 1 comment

Editorial

While STL has given Canadian stores a 30 day reprieve on its decision to short discount two very popular publisher lines, the necessity of the action raises a number of questions.  If their hands are tied by the publisher’s decision to place market restrictions — in this case discount restrictions — in place, the first consideration that must be addressed is:  Are Tyndale and Baker doing this on their own, or is there pressure from Foundation (FDI) and David C. Cook in Canada?

I have been in this business for 36 years, and I cannot imagine any reason why a distributor would go along with this bookkeeping nightmare.  Consider that STL receives a case of books from either Tyndale Publishing House or Baker Book Group.  As a distributor, it gets those books for 65% to 70% off.  (Independent publishers I spoke with confirmed STL drives a much harder bargain than Ingram.)  The books then enter the warehouse and STL’s profit is the difference between the cost price, and the wholesale price to retailers.  There are not separate books for domestic customers versus international customers.  There are not separate discounts for the books being sold to Canada or beyond versus those sold to stores within the United States.   It doesn’t work that way.

But the whole language of the explanation from STL’s VP is filled with language that makes no sense.   He says that the publishers in question — or at least the ones that have been mentioned so far; there may be others — would “no longer support our deeper discount to Canadian customers.”

What “deeper” discount is he talking about?  Canadian customers have had the same trade discount as U.S. customers.  The only “deeper” discounts have been on STL Publisher Services lines; discounts which made sense in terms of Authentic Media, since STL was both publisher and distributor; discounts that have been appreciated, but were never requested; discounts which applied to a very small number of titles actually purchased by Canadian stores.

He says, “We held out for as long as we could with little or no margin.”  Again, is the STL VP saying that its gross margin on books is adjusted for those copies it sells internationally?  How is this accomplished?  Do Tyndale and Baker do invoice adjustments based on STL’s declaration of shipping destinations? If there are separate product streams, why doesn’t STL stock ITP editions for the foreign market?

If the margin is too small; it’s too small domestically as well.   There’s one invoice price for each title, right?   Or is he saying there are several different invoice prices for each title? Wouldn’t that require different ISBNs, similar to how grocery stores have different UPCs for the same item sold in different chains?

And in light of all this, a last question:  What does it mean to say that  “all the rest of our vendors from which you have been receiving the 40% are continuing to support our Canadian efforts“?  Are NavPress or Broadman kicking in extra subsidies to STL each time they ship a book north of The 49th Parallel?  That would invoke the ire of FDI and Cook more than anything I can imagine.

And if this is not specifically about Canada; if STL is merely getting a lesser discount from Baker and Tyndale and feel it can’t do that in combination with other offers to Canadian stores; then change the Canadian free freight offer by all means; from 15 units ordered to 15 units shippable; or 20 units ordered; or 25.

Personally, I doubt that either Tyndale or Baker cared about the small quantities of individual titles that were shipping to Canada.  Despite the fact that Canada’s population is 10% of the U.S., Christian book titles — with a couple of notable exceptions — tend to do between 3% to 6% of their total volume here.  In a box of 36 trade paperbacks, we’re talking one or two copies per carton.

No, there’s something simply too fishy about all this.   Christian retailers are partners with distributors in getting books into homes, schools, workplaces and to extended families and institutions.  It’s time for the distributor to come clean and explain exactly how this incredibly complex accounting process works.

The above opinions are those of the author.