Unity Books Wellington is fortunate to have two commerce students (Courtney Smith and Selina Kunac) on the staff. During the recent intensification in the debate about New Zealand RRPs − particularly where the book has the UK price printed on the back jacket – we produced a price comparison spreadsheet for our lead winter titles on our front-of-house pyramid book display.
Looking at the spreadsheet as a whole, there is not a lot of difference between the publisher/agencies involved.
We sent the specific publisher result to each publisher/agency involved and asked them to respond about their factors for pricing books for NZ. We got great and lengthy comments, for which we give them our thanks.
In summary, comments included that NZ RRP involves considerations of: format, extent, print volume and location, UK buy price (their margin), the ebbs and flows on individual title costs created by publisher discount changes, UK home vs export royalties, production values, the forecasted sell-through rate, the air or sea freight costs to the warehouse, then out again by air to NZ, the cost of carrying stock in a distribution centre. Then there is the need for NZ publishers to set some level of standardised price pointing, release date, parallel importing, write offs and depreciation, returns and returns freight, exchange rates (which have been mercifully steady) and, as we are all aware, the many other business overheads feeding book sales and relying on book sales, all involving people & services. No real surprises. Every aspect of the book industry is pared back. The long lunch hasn’t been part of the formula for some time.
Are the originating UK prices too high? Can the multinational’s NZ offices keep improving bookseller margins and Total Operating Margin? Can the pricing process itself (UK price converted to Australian price, converted to NZ RRP) be changed?
Competitively fair pricing has always been vitally important to indie and group viability, and it is amplified now with the growing online offshore consumer culture. NZ online spending offshore rose 11% in a quarter compared with the same time last year. Local web sales increased by half again in the same period. The government’s perpetual “work in progress” about GST capture of offshore purchases is lamentable. Until they resolve that, our RRP is always going to be 15% higher than the Amazon/Book Depository price, regardless of our shop business strategies.
Unity Books Wellington has said for two years, that publisher/agency conversions from UK to $A to $NZ have improved a lot – that NZ RRP’s do not have a lot of fat in them – and this view is reinforced by the results of this exercise. We welcome feedback from others in the book industry.
Unity Books doesn’t want to alienate those for whom RRP is a major industry issue, but our analysis of this survey is that a lot more could be achieved for viability and fair pricing if the entire trade – including the publishers – got behind the Booksellers NZ and Retail NZ lobby for government capturing the GST on offshore purchases.
Article by Tilly Lloyd, Manager, Unity Books Wellington
* opinions in this piece are those of Tilly and her shop, and do not necessarily represent those of Booksellers NZ as an organisation.