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July 24, 2007
Harry Potter's Big Numbers Attract a Wide Spectrum of Retailers
The numbers are huge, 8.2 million copies sold in 24 hours in the U.S., 2.65 million in the U.K., but Harry Potter isn't necessarily a boon for book stores. The big chains, Barnes & Noble, Amazon, and the like, discount the book sharply in order to compete with one another, and then they hope that customers will pick up some other books where the profit margins are better. Independent bookstores are far less likely to discount at all. They don't get the books in large enough quantities to get a deal from the publisher, and, less efficient than the chains, they can't afford to trim profit margins much.Generally, this is the case for most any bestseller, where the chains discount 20%, 30%, even 40% or more, and the indies sell books at full price, getting by on atmosphere, customer loyalty, and skillfully selling non-bestsellers that may not be on the front tables at chain stores. In the case of Harry Potter, however, a whole nother layer of retail establishments gets in on the action. The big box stores, like Wal-Mart, Costco, and Target, have already put the squeeze on the bookstore chains with bulk quantities of deeply discounted bestsellers, so a book like Harry Potter fits nicely into their business plan. But the net is cast even wider for Harry Potter. Grocery stores, usually not likely to have much in the way of books aside from the occasional rack of mass-market paperbacks by the register had stacks and stacks of the final boy wizard installment. Even Best Buy, whose products are probably more typically responsible for a decline in reading, had customers lined up at midnight so it could sell the book, placing Harry Potter alongside the Wii and the PlayStation3 in the pantheon of must have products hawked by the electronics giant.
And so, by selling the book at full price and getting by on charm, it's likely some of the indies got a bottom line boost from the Potter madness, but for the chain stores, squeezed by other giant corporations, profits may be tougher. On a much smaller scale, this challenge was evident in Malaysia, where book chains protested the price slashing of grocery giants, who sold Harry Potter at below cost, by boycotting the book (imagine Barnes & Noble trying that!) Eventually, the Malaysian booksellers worked out a deal with Penguin, Harry Potter's distributor in the country, but the episode highlights the high stakes competition that book retailers face when they are forced to go up against retail heavyweights.
- C. Max Magee @ 7:30 AM ~
comments: 3 ~ Links to this post
Bryan D. Catherman @ July 24, 2007 10:12 AMThe management of this particular B&N deserves kudos for the effort they and staff put into this book event -- their costumes weren't provided by headquarters but were home-made, as was some of their event materials. It was hot and crowded inside and packed with children for many hours, but the staff all maintained a good-natured attitude. At other times this same store brings in local authors for talks and signings, and it always has a wider selection and better ordering service than any independent bookstore I've ever seen in our town of 100,000-plus people, even back when the independent stores were the only book source in town.
The same night I visited one of our local SuperWalmarts, which had not strongly advertised the book, had no displays (you had to ask a clerk who directed you to the layaway counter at the back of the store) and had very few customers, despite lower prices.
Maybe a pricier charm only beats big-box-store cheap when the readers are emotionally invested in the book. I'd be interested in seeing the Harry Potter sales figures for each chain after the first weekend, when B&N and Borders offered parties and comraderie, and a month later, when the parties are over and the readers are just looking for the least expensive copy.
@ July 25, 2007 12:16 AMSponsor:
