Australian Book Prices: The Difference is 16 percent

Last week the PriceWaterhouseCoopers (PwC) report for the Book Industry Strategy Group (BISG) was released. The report was a market analysis of the book industry in Australia. After not having any Australian Bureau of Statistics for our industry for a number of years it is good to see some statistical analysis of what is going on in our industry, although the figures in the PwC report were just estimates.  Still it does put into focus what has recently only been anecdotal evidence.

One of the recommendations in the report was that bookshops, independents in particular, need to become cultural destinations and diversify their product range to remain relevant and competitive. Bookshops, independents specifically, are already cultural centres and have been for a long time. Many bookshops already sell a diverse range of products including music, DVDs, giftware, stationery, coffee, food and wine but a bookshop’s primary business must remain books, especially in tough times. To remain relevant to book lovers they must be able to offer a full range of books in a full range of formats and be able to supply them in the time frame the consumer expects. It will not matter how much affection people have for their bookshop if they can’t get the book they want when they want it, at a competitive price.

The part of the report that I found most interesting were the reasons for Australian book prices being more expensive. GST was mentioned as was postage inequity. Exchange rates were also referred to with an US/Aus exchange rate of 80 cents being stated as the break even point. However the figure that caught my attention was that supply chain inefficiencies in Australia can add up to 16% to the price of books here. Now I have had a couple of rants about book prices (What Price a Book in Australia and Book Pricing Repeating the Same Mistakes only on a bigger scale) and put forward my thoughts on what a book should be worth and funnily enough the difference has been about 15% ($32.95 should be $27.95).

In all the debate about the price of books it has been difficult to compare like-on-like because of factors like tax, postage and fixed costs like wages and rent that differ from country to country and currency to currency. But this report makes it clear that there is up to 16% difference in the price of books in Australia caused by the way we all run our businesses. And I want to be clear here. Supply chain inefficiencies do not just mean publishers supplying bookshops. It means the total supply chain from customer to bookshop to distributor to printer to publisher to author and everything in between. It is the way bookshops order books, the way publishers supply those orders, they way bookshops receive those orders, returns, printing, remainders, stock turnovers, EVERYTHING. There is not a problem with one sector of the book industry it is the whole industry that has a problem and the whole industry has to fix it together.

The supply chain is the most critical aspect of our industry at the moment both in terms of print books and eBooks. Our industry is leaking more than 50% of  online book sales for physical books overseas and with 70% of eReaders being Kindles this is happening on a much bigger scale with eBooks. (Local publishers may still be getting the sales when eBooks are sold via Amazon but it is at the expense of their local retail partners). Hopefully the final BISG report can address some of these issues and we can see improvement in inventory and distribution practices from both booksellers and publishers.

14 thoughts on “Australian Book Prices: The Difference is 16 percent

  1. After four books with a trade publisher over the past 5 or 6 years I recently set up my own imprint for future titles. My original intention was to publish a 200-page paperback and set the price to $8.95 or $9.95 in Australia (instead of $16.95) but that would have meant no distributor or bookseller could have justified getting a copy in, even for a special order. Schools & libraries are the primary market for this title, and trying to flog them copies one by one isn’t my idea of fun.

    I blogged about the hard choices here:

  2. In the UK a few years ago, the independent bookshops (a vanishing species) set up an internet network, a website that they all shared. It featured their opinions of the books, but basically it was a way to provide a more comprehensive service for customers – eg you could look online and order a book to be sent to your nearest inde bookshop in the network so you could pick it up, and other similar things. I am not sure that it has survived – not much use for me as the inde bookshops that were in the town where I live when I first moved here 20 years ago have long gone.

  3. For me a drop to $27.95 per book is still pretty uneconomical, given I read 150+ books a year. It’s a start, and it’ll be interesting to see what the industry’s response is to this report, but I have to be honest and say it wouldn’t stop me buying from the evil depository from across the ocean.

    I have changed my behaviour somewhat in the past few months and am buying more books locally even though they cost me more though I am getting a little tired of hearing about the marvels of independent booksellers. The two that I have relatively easy access too are really not much like the cultural centre you describe (and undoubtedly run). They’re not that interested in my genre of choice (crime), neither has a mailing list telling me when new titles are coming in (or anything else of interest), neither has an online presence that would allow me to do what Maxine above suggested and order books to be collected at their store, one of them has had a single author event this year and I think the other has had a couple of events for children’s authors, neither of them make any effort to welcome local book clubs (one has a coffee shop where my book club meets and not once has anyone from the staff wandered over to ask what we were reading and offer us some small ‘something’ for meeting there (a small discount if we buy next month’s book from them for example)… I could go on at more length but time is short. I get the sense that your shop IS offering many of these services and that’s great Jon but, at least here in Adelaide, the experience is not the same and I don’t feel particularly obligated to save an industry that doesn’t appear to want to save itself.

    1. Thank you for trying to buy more books locally. I think it is great you do think about where you purchase your books from rather than just chasing the best price.

      I’m not very familiar with Adelaide and it is disappointing to hear that your local independents are as engaged as other independents around the country. I do know that Adelaide does have a fantastic Dymocks store in Rundle Mall who have some very keen crime readers on their staff and that newly independent Dillions in Northwood has a very good reputation but they both might not be local for you.

      1. Dymocks in Rundle Mall is where I’ve been going for my local books, sometimes having to order in but I have no problem doing that. They have improved tremendously in the past couple of years.

        Dillons at Norwood is one of the two I was talking about, not the one with the coffee shop but the one I think had a couple of children’s author events this year. I say ‘think’ because I don’t know how one would know unless one walked past the shop in the week or so leading up to it which is when they put a notice out front. They don’t have an email newsletter or a website or blog or any way of communicating with their customers unless you go into the store which just seems insane to me in 2011 and they don’t do any of the things in-store that I would expect from an ‘indie’ such as identifying local authors, identifying staff favourites, posting book reviews from local readers somewhere accessible (ideally that website they don’t have), hosting a book club…the shop is in a prime location in one of the city’s best known cafe strips so they could easily team up with one of the many (many) coffee shops within spitting distance for book club meetings / discussions / author events etc. I have twice recently asked about due-to-be released Australian crime fiction titles only to be stared at blankly, admitedly both times were on a busy Saturday morning but that’s when I’m free so that’s when I need the service. Of course if they had that website I wouldn’t need to hassle sales clerks with tricky enquirieis while there’s a queue of people waiting to buy the latest masterchef cookbook….

        Of course none of this is your problem and I don’t mean to rant again. It is just so tiresome though to be looked at as some kind of traitor to one’s country when one decides to shop online/overseas. It’s a given that local stores cannot compete on price but there are plenty of things that they could provide that would cost them nothing or very little that would differentiate them from the online alternative. At the moment when I buy a book locally I mentally file it under charitable donation which I make because I have loved being in bookstores for as long as I can remember. That is not a sustainable model for their business.

      2. I can definitely see where you are coming from. I don’t want to make any excuses but Dillon’s were an A&R franchise for many years so website, newsletters etc was handled by head office and I do know they are exploring website options including the people who do ours, so fingers crossed?

  4. My local bookstore owner tells me that she is independent, but really she is a franchisee for a chain. She does well with author events, but in no way is she a destination store even for me, and the prices are way more than I can pay elsewhere.

    We do have some fabulous independent bookstores in Melbourne, but my biggest issue is that they are all in the upmarket and wealthy suburbs. It is a vicious circle I know. Business owners need to be in areas where they will be supported by the community but by the same token there would seem to be a need to encourage readers in lower social economic brackets as well.

    We all have to make choices about what we do with our funds and not many of us are lucky enough to be able spend freely. Like Bernadette, I read more than 150 books a year and that means I have to choose to either use the library or buy from overseas. I support Aussie authors and stores when I can, but it isn’t always practical.

    Any outcome of the report which delivers a streamlined and more efficient supply chain has to be a good thing, so here’s hoping that there are some practical outcomes.

    1. Thanks Marg. Another issue that has also arisen in the last 12 months is where our public libraries buy their books from. Many of them have moved their purchasing overseas which also compounds the problem that the local industry is facing.

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