Wednesday, February 08, 2006

Discounting and Wottakars

It's invidious, I know, but occasionally a comment on an earlier post seems to me to be sufficiently interesting as to warrant being fished out and posted on the front page. So it is with Clive Keeble's comments on discounting and the proposed Waterstone's/Ottakar's merger. Clive is a small independent bookseller who actually favours the merger, which is unusual. Here's what he says:

Amazon worldwide sold 1.6 million copies of the latest Harry Potter - surprise, surprise this did not return them a profit.

"Turnover is vanity : profit is sanity"

Without the advantage of listing and commission income from over a million 3rd party sellers Amazon would be unable to deliberately price point new books at a level which does not show them a profit.

In the short term their customers are the winners : however, retail history shows that such discounting will always have knock-on business failures, and often in the long-term a reduced catalogue selection.

As a rural independent bookshop owner I have made a submission to the Competition Commission re Waterstone's acquisition of Ottakar's. Me, I'm strongly for the takeover as without a vibrant retail bookshop backbone, via a resurgent Waterstone's, the supermarkets and Amazon are going to control the UK booktrade to suit their shareholder's interests.

Meanwhile, press reports indicate that Tim Waterstone himself is planning to buy back his old company. Gosh, I wish I had a pound for every time I've read that story. But sooner or later it will probably turn out to be true.

1 comment:

Clive Keeble said...

I feel slightly flattered to see my views placed on the GOB "frontpage".

On Friday, Feb 10th,I noticed that views similar to mine, from Geoffrey Atherton - Uplands Bookshop, Swansea - were "posted" on Competition Commission third-party submission webpage.(My own submission has not yet been archived). >http://www.competition-commission.org.uk/inquiries/ref2005/hmv/third_party_submissions.htm<

In USA there is anti-price discrimination via Robinson-Patman Act ; this restricts the differential discounting by distributors. Enlightened publishers would have foreseen the likely effects of the abolition of the Net Book Agreement.

Borders are disposing of approx. a dozen of their (London) Books Etc outlets. There must be considerable rationalisation on the high street if terrestial shops are going to be able to survive and compete with the new virtual world. I have not read a single word in the media from authors anxious that Books Etc are disposing of these shop leases. Although I do not have any inside information I would hazard a guess that these Books Etc outlets, which were probably only marginally profitable have been greatly affected by London commuters purchasing via the internet : the publishers failed to accept that the internet (in particular Amazon) was, for the most part,going to derive its sales from customers who previously purchased in terrestial shops.

Michael, thank you for giving exposure to the alternative view !!!

Clive Keeble