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Andy Laties

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Barnes & Noble Shows Its Hand [Jan. 20th, 2011|03:46 pm]
Andy Laties
1) Last year Barnes & Noble superstores sharply reduced book inventories and ramped up sidelines.

2) A few weeks ago Len Riggio of B&N complained that if publishers offer Borders extended terms in order to help stave off a Borders bankruptcy, Barnes & Noble should get these special terms too.

3) Today, Barnes & Noble fired many long-time national book-buyers.

What do these steps mean?

Back in the early 80s, American Bookseller Magazine published an article in which Barnes & Noble reported that by reducing the number of different titles in its children’s book section and facing the remaining titles out, it was able to cause profits to jump sharply.

I’ve experienced this in my own stores, and in my children’s book-fair company. If you have a solid lock on your customer base, the most profitable thing to do is reduce title diversity and face most of the remaining (bestselling) titles out. By concentrating on selling more of what’s selling, you reduce your operating costs and get better discounts from suppliers.

B&N is returning to that discovery of theirs from the early 80s, and applying it to the entire storefront bookselling operation. That's because since Borders has been put on hold by lots of publishers, it’s safe for Barnes & Noble to cut back on the number of different titles stocked: there can be no unfavorable inventory-depth comparison by customers of B&N to Borders.

Why maintain a full staff of specialty book-buyers in New York if your new buying strategy is to use your (incipient) monopoly on national shelf-space to force publishers to pay for access to the (upcoming) bestsellers-only, face-out space in your stores?

No more will publishers be able to simply assume that B&N will be open to stocking “just any” high quality book that has a known readership. Publishers had better get used to ponying up lots more promotional money to get their books into B&N. (Where every book in the store will be a FEATURED book.)

Even worse for publishers, if Borders DOES end up getting special terms from publishers to help avert a bankruptcy, then Barnes & Noble will not WAIT to be offered those same terms. B&N’s “request” for equal treatment from publishers is actually a warning. B&N will simply TAKE extra time to pay publishers: this will be the way they retaliate against publishers for helping save Borders. No publisher will be able to stop this, since no publisher will be able to stand up to B&N, with Borders on the ropes. Publishers will need B&N’s newly constricted shelf space more than ever!

There is only one solution for publishers to this dilemma, and it’s not eBooks (which will always be a market that is subject to intense bestselleritis, since an online selling environment tends to cause readers 1) to be acutely aware of what other readers are reading most, and then, 2) to choose principally from among these most popular books).

The solution to regain a marketplace where great diversity of titles are on display is for publishers to join in the upcoming push for more indie bookstore openings all over the country.

In the 80s, 3,000 indie bookstores opened in just seven years. With the current collapse of shelf-space at Borders and Barnes & Noble (and with last year's closing of 700 Walden and Dalton mall bookstores), the time is right. Publishers must take part. Their businesses are at stake.