Independent Booksellers and the Fixed Book Price: a Horror Story?

By guest blogger Kim Heijdenrijk

We are glad to introduce the first contribution to our series of articles focused on the current state of independent bookselling by a guest blogger – Kim Heijdenrijk. Kim is the author behind Kimbooktu, a blog on miscellaneous book related subjects, cannily subtitled 'Gadgets for book lovers'. The Netherlands based and born, Kim has had an interest in Dutch, English and American lit ever since her teenagehood, making her into an avid book collector. As for her professional background, she has worked as a journalist for an extended period of time, but she has also been directly involved in the bookselling business through her affiliation with one of the biggest independent booksellers in the Netherlands. Presently, she has switched to the field of marketing, but even a short look at her popular bookish blog proves that she remains perfectly up-to-date with the latest trends and events in the world of books and literature.

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The majority of European countries have a fixed book price. Some of them are regulating the prices of books for over a hundred years now; other countries are relatively new to the concept. The Fixed Book Price Agreement (FBPA) means, in short, that offering books at competitive prices is forbidden. No big deal for the big book chains, but a possible horror story for the independent bookseller.

After a gap year, I worked for an independent bookstore for a while. This bookstore is one of the largest, if not the largest, of the Netherlands. The shop is situated at a fantastic location and has a very good assortment of books in every category. Above this, the departments are maintained by people who truly have a love for books. All of this has become their ‘specialty’, the reason why people go there instead of a big chain. After a while, I got the responsibility of the English department. This meant that I would meet representatives of publishers who would try to sell their titles.

It was then that I learned how much is earned on a book. Or better said: how little. And this particular shop got quite a big margin, since it is so large and well known. I was shocked. When speaking to my boss about it, he merely said: “Why do you think we also have a music store, a coffee shop and an office supply store?”. Point taken. It is almost impossible to survive on the sales of books alone. Even with a relatively big margin.

This particular Dutch bookstore is very fortunate. A success story if you will. But only because of the business strategy they chose. Books as a core business, other products to stay afloat. How many independent booksellers are in the position to do this? How do you get people to buy at your shop instead of the big chains that are on every high street? The obvious - if not the only - way is to do what supermarkets do. Have a sale. Lower the prices of particular products, in this case particular books. A very good idea, if the Fixed Book Price Agreement did not forbid it.

Let me explain what the FBPA exactly is. Publishers and booksellers of several different countries have agreed at some point to fix the price of new books that are sold. The reason why this agreement came to existence is to make sure booksellers compete with the books they sell, instead of the prices they sell them at. This in order to make sure that non-best sellers have a bigger chance of being bought. That made me think for a while too. I will explain later.

Almost half the time, the fixed price agreement has been turned into a law. On the first of January 2005, it became a law in my country (The Netherlands). Even though there was an agreement since 1923, it created a big stir in the book market. Other countries that have a fixed book price by law are for instance Argentina, Austria, France, Germany, Greece, Italy, Mexico, Portugal and Spain.

The first country to have some sort of fixed book price was Denmark. This country has fixed prices on books ever since 1837. Germany followed in 1888. It took a while for other countries to catch on. More than a few countries that had a fixed book price by law reversed it, like Australia, Finland, Ireland, United Kingdom, Sweden and Finland. The last one is to re-enact the law this year.

Now the idea behind the FBPA. The idea is that bookshops make the most money on bestsellers. These books, like Harry Potter or the Da Vinci Code, cost little effort to sell. And hardly any advertising money for the bookseller, because these books get enough exposure. Without the fixed book price, a bookshop could offer these books at competitive prices to lure readers into their shops. With the fixed prices, the booksellers loose this advantage.

The publishers want the bookstores to promote lesser known - more specialized - books instead of the ‘high flyers’. They want to create ‘bibliodiversity’, as is stated in a paper by the International Publishers Association. To make sure that the shop owners practice this innovative word, the publishers offer a guaranteed/larger margin on the bestsellers. This way everybody wins. The publisher knows that the ‘big’ books will sell anyway and therefore they can give a good profit margin to the bookseller. The bookseller should be able to fund the promotion of\ the ‘small’ books because of this. And they live happily ever after…

Indeed, happy endings only exist in fairy tales. There are bookstores and there are bookstores. A lot of bookstores are part of some sort of chain. These stores have one communal department that buys books and promotes them. You do not have to read the entire math section of the store to understand this is cheap. These chains buy in high quantities, so they get good margins from the publishers. The chains do not only spend their money more efficiently, they make more of it too.

How different is the story for the independent bookseller. The book freak that started his little shop out of passion. Little shop. Little money. Little margins. No big PR department. This entrepreneur is the buyer, the PR person and sales person all at the same time. And does it for the love of books. But mostly because he cannot afford to hire people for these specific tasks. Nobody starts a bookshop to become rich, you just do not earn enough per book. Bookstores are born out of passion. At least the independent ones are.

The so called ‘benefits’ for these little shops can only be viewed as ludicrous. The fixed book price would protect them from the competition of supermarkets in their area that sell books at bargain prices. For this reason the independent bookseller in less convenient places would have a better chance of survival. I would advise the creator of this benefit to pick up an economy book. The buyer of books in the supermarket is, of course, an entirely different person than the one purchasing a book in a bookshop. The books available at supermarkets are there for the impulse buyer. A person who does not read a lot and heard from a friend that he should read a certain book.

I try to buy most of my books at independent bookstores now. Even though I am often tempted to go into one of those chain stores. It is convenient because they are everywhere, but it makes me feel good to help a struggling independent bookstore. Hey, that’s the benefit of the fixed prices; you know the books cost the same anyway.

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Sources:
Wikipedia: http://en.wikipedia.org/wiki/Fixed_Book_Price_Agreement

Centraal Planbureau: http://www.cpb.nl/nl/pub/cpbreeksen/cpbreport/2002_2/s2_4.html
European Writers Congress: http://www.european-writers-congress.org/upload/2962004103825.pdf
European Booksellers Federation: http://www.ebf-eu.org/paper/Book%20Trade%20in%20Europe%20updated010206.doc
International Publishers Association: http://new.internationalpublishers.org/index.php?option=com_content&task=view&id=29&Itemid=58

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Images used: (Author's archive)
1: One of the few bookshops in Las Vegas. This independent bookstore in the Mandalay Bay hotel on the Strip is now closed.
2: Thalia is a chain of bookstores in Germany, one of the first countries that introduced the fixed book price.
3: The Dutch chain Selexyz got the opportunity to turn a church in the city of Maastricht into a bookshop.

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More articles from this series:
An Insight into the Current State of Independent Bookselling – An Introduction

Independent Bookstores in Danger of Extinction – Who is to Blame?

Chain Bookstores: The Rise, Struggle and Downfall?

Independent Booksellers: What Can Be Done To Help?

An Interview with an Antiquarian Bookseller: The Caretaker

Literaturhaus: Books, Words and Much Much More
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