Friday, 5 November 2010

Budgetary Concerns

Back in the days of the Net Book Agreement, books had a cover price which people paid, no questions asked. Haggling in shops, particularly chain shops where prices are clearly marked, is still somewhat unconventional. Unusual, but not unheard of, as I discovered the other day, when a man accosted me at work.

“How much is this one?” he asked.

“It’s £8.99.”

“Can I have a discount?”

“Why?” I said, nonplussed. “It’s in perfect condition.”

“Yeah,” he said. “But I was wondering if you could just... take some money off.”

“It’s on three for two,” I said. “So if you got three books of the same value it would effectively be a third off.”

“I just want this one.”

“I’m sorry, but that’s the offer. As a single book it’s £8.99.”

“Can’t you come down a bit on that?”

“No.” I said. “I’m afraid not.”

People actively expect to pay less than the full RRP for books, and feel now feel ripped off when booksellers ask for this. In a 2007 survey of six countries which also included the USA, Ireland, the Netherlands, Sweden and Finland, the average selling price for a book in the UK was £6.34, which was the lowest of the six countries in the survey, bringing the lowest gross profit per book: a mere £1.60. The Netherlands, which still operates a price-fixing agreement, had the highest average book price in the survey at £13.29.

I think that this is a thorny problem, and one that could get worse. While it’s only fair to give bookbuyers the best value for money, if booksellers, desperate to compete on price, continually squeeze the publishers, the same editorial and production standard simply won’t be maintained. And while Waterstone’s once benefitted from the collapse of the Net Book Agreement, which allowed them to benefit from economies of scale unavailable to their smaller competitors, using deals like their 3 for 2 offers to secure a bigger market share, they are no longer the biggest bookselling fish. Their focus must switch to knowledgeable staff and good customer service; but with the current mood of austerity, it is likely that cost will prevail as the most important deciding factor for many.

A book buyer for Asda questioned whether offering a product with a certain cultural significance, like a book or a CD, for less money, would make people place less value on it. “In fact, I think I would love it even more," she said. Certainly books are facing increased competition with other forms of entertainment, such as computer games and DVDs, and price is one way to grab potential customers’ attention. But in ‘Predictably Irrational’ Dan Ariely reports the results of psychology experiments involving food which suggest people do enjoy the same thing more if they believe it is more expensive. More incredibly, subjects told that a certain new painkiller cost $2.50 rather than ten cents found it much more effective; it was a sugar pill. Pay more for a book and enjoy it more? Maybe. But you won’t enjoy it at all if you don’t get to read it.

There are no discounts just yet for customers with the chutzpah to ask for them. Not even if you’re asking, as my customer was, for a discount on ‘Whoops!’ by John Lanchester. Subtitle: “Why everyone owes everyone and no-one can pay.” Well, quite.