I get especially incensced when I see companies throwing away good money by commodotizing a hot property that doesn't need to be sold on price. Really, when you have something that everybody wants, why cut your own throat to make a sale? That's why I'm mystified by the Standard Operating Procedures of the bookselling trade:
Yahoo!: Harry Potter magic spells losses for booksellers
Yahoo!: Harry Potter magic spells losses for booksellers
NEW YORK (Reuters) - Harry Potter has no spell for bookstore profits.
Millions of people will descend on stores for a copy of "Harry Potter and the Deathly Hallows" in July, but deep discounts mean many will struggle to turn a profit from the jamboree.
"Everywhere you go there is huge, ridiculous discounting by the chains," said Graham Marks, children's editor at the British-based trade magazine Publishing News.
"They are literally not going to make one penny out of the book. It is stupid -- just throwing money away ... The world has gone mad."
Online retailer Amazon.com and Wal-Mart Stores Inc. have slashed nearly 50 percent off the book's $34.99 list price, forcing many independent booksellers to follow suit to stay competitive.
Millions of people will descend on stores for a copy of "Harry Potter and the Deathly Hallows" in July, but deep discounts mean many will struggle to turn a profit from the jamboree.
"Everywhere you go there is huge, ridiculous discounting by the chains," said Graham Marks, children's editor at the British-based trade magazine Publishing News.
"They are literally not going to make one penny out of the book. It is stupid -- just throwing money away ... The world has gone mad."
Online retailer Amazon.com and Wal-Mart Stores Inc. have slashed nearly 50 percent off the book's $34.99 list price, forcing many independent booksellers to follow suit to stay competitive.
...
Amazon.com boasted more than 1 million advance orders for the book, easily besting advance orders for Rowling's 2005 release, "Harry Potter and the Half-Blood Prince."
In April, Barnes & Noble said advance orders for "Deathly Hallows" topped 500,000 copies, breaking the bookseller chain's record for advance sales.
But with widespread discounting biting a gigantic chunk out of any potential profits, many booksellers are not enthused about its release. And for smaller, independent book stores, the discounting makes for a hard calculation.
In April, Barnes & Noble said advance orders for "Deathly Hallows" topped 500,000 copies, breaking the bookseller chain's record for advance sales.
But with widespread discounting biting a gigantic chunk out of any potential profits, many booksellers are not enthused about its release. And for smaller, independent book stores, the discounting makes for a hard calculation.
If "staying competitive" means "losing your ass" then what's the point? "Market share" is a bogus, emphemeral number, and the top line on your P&L doesn't mean jack unless you've got a nice fat number on the net, or "bottom line." Am I the only person who thinks that turning a profit is a good idea?
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2 comments:
A prominent Edmonton independent bookseller said the same thing, in a presentation to a publishing class, just before an earlier Harry Potter was released. The bookseller noted that the store would be bringing in a smallish quantity “to satisfy loyal customers,” but selling them at the same ridiculous discount as the major chains, whose greed and stupidity forced massive discounting, meant that no retailer would be able to make any money on what was a slam-dunk best seller.
You'd think retailers would have learned from the tit-for-tat pricing failures in the airline industry.
Pricing strategy 101 books will tell you that one-ups-man-ship in pricing pisses away all of your profits.
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