Thursday, October 21, 2004

Bargains for some

The Book People is the name of a bookselling operation run in the UK by one Ted Smart -- and a very smart fellow he is.

Ted Smart operates like this. He buys books cheap (and more of that in a minute). Then he organises a team of agents who take 20 or 30 sample copies and deliver them to an office, or a factory, or a dentist's surgery. People who work in or visit the office or whatever can then look at these sample copies, decided if they want to buy an unmarked copy of same, and put their name on a list. After a week or so, the agent comes back, collects the sample copies, and goes off to collect sufficient supplies of the books ordered. A few days later he delivers them and collects the payment.

There are no shops involved anywhere in this enterprise, and, although there is a web site and there are newspaper advertisements, I suspect that the bulk of business is found through agents, as described above.

The main point of the operation is that books are available to readers dirt cheap. As far as the book buyer is concerned they are getting genuine bargains.

Bearing all this in mind, let us have a look at The Book People's Christmas catalogue. If you live in the UK and you haven't seen one yet, don't worry, you will before long. It will drop out of a newspaper or a magazine, or perhaps even come to you through the post.

Many of the early pages deal with kids' stuff, because it is a Christmas catalogue after all. But a few pages on we find, for instance, the Times Atlas of the World available for £15. The recommended retail price (RRP) is £75. A page or two later we have Being Jordan (a recent big seller) for £6.99, while the RRP is £16.99. And further on still you can buy a bumper bundle: 10 paperback novels, with a total RRP of £69.90, all yours for £9.99. The books are not recent issues, but they are by respectable names.

I repeat: for the buyer, these are bargains. The paperback bundle of 10 includes, for instance, works by Beryl Bainbridge, Iain Banks, Jane Gardam, and Christopher Brookmyre.

I think we can also assume that Mr Smart has done his arithmetic properly, and that he is earning a decent profit on each sale. And nobody has put a gun to the publishers' heads, so they are not unhappy either. Customer, Ted Smart, and publisher, they are all smiling.

But what, I find myself asking (and not for the first time), what of the poor bloody author? How does he/she fare in this enterprise?

In his FT survey of the book trade which I mentioned yesterday, John Sutherland describes The Book People with admiration, and states that Ted Smart 'buys titles in bulk, at up to 60% discount.' What does that mean?

Well, I would expect it to mean that, if the RRP of a book is £10, Ted Smart buys it at a discount of 60% of that figure, i.e. he pays £4 for it. Which would presumably enable him to sell it at say £6, which is a heavily reduced price from the customer's point of view.

However, even a few moments' contemplation of the figures that I have quoted from the Christmas catalogue show that this is obvious nonsense. If Ted Smart was buying the Times Atlas at a 60% discount he would be paying £30 for it. But he is selling it for £15. As for the paperbacks, 60% off the RRP would give Smart a cost of just under £28, but he is selling the whole package of 10 for £9.99.

So, it follows with inexorable logic that, on average, Ted Smart is negotiating a whole lot more than 60% discount. I can see no reason to suppose that any of the examples that I have given are loss leaders, so let us examine the arithmetic of the novel package more closely.

The buyer pays £9.99, and carriage is extra. I will ignore carriage, though Ted Smart may well arrange things so that he makes a turn on that income too; quite a few booksellers do. We will just look at the money paid for the books.

How much of that £9.99 do you think Ted Smart has paid for the books, and how much is gross profit for his company? Well, it's anybody's guess, but if you told me that the deal was costed at 50/50 I wouldn't be surprised. In that case, The Book People would be paying the publishers £5. For our present purposes, let us err on the publishers' side, and assume that the split is two thirds and one third. In other words, the publishers get £6.66 per package, give or take a penny. Since there are 10 books in the package, that means that each publisher, on average, gets 67 pence per book. (And, as suggested, it could be less.)

How much of that 67 pence goes to the author, do you imagine?

The answer, of course, is that everything depends on the contract. But it sure as hell isn't going to be very much. For a start, 67p probably doesn't even cover the cost of printing the book, though the actual unit cost will depend on how many were printed in the first place. Long runs result in lower unit costs.

I have just had a look at Publishing Agreements (now edited by Charles Clark and Lynette Owen). Publishing Agreements is the standard UK reference book on publishing contracts. I don't have a bang up to date edition, but terms for authors have generally got worse in recent years, so my 1993 edition is probably a fair guide.

What it says there, in the 'model' contract between publisher and author, is that, one year after a book has appeared, the publisher shall have the right to dispose of copies as a remainder or overstock. If the price obtained is more than the cost of production, the author will get 10% of the proceeds. So, with enormous good fortune, a writer whose book is included in Ted Smart's 'bargain bundle' may get as much as 6p or 7p per book.

However, it is much more likely, I suspect, that the 67p obtained by the publisher is less than the cost of production. And what does the 'model' contract say about that? It says 'On disposal of stock at or below the cost of production, no royalty shall be payable.'

So the author gets Zero. Zilch. Nothing.

All you budding authors out there have been warned.

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