Book buying choices that work for everyone.
“It’s easy to think that readers gain a great deal by being able to buy books cheaply. But if a price is unrealistically cheap, it can damage the author’s reputation (or brand, as we say now), and lead to the impression that books are a cheap commodity and reading is an experience that’s not worth very much.”
Philip Pullman, July 2017
Book buyers are no exception to the rule that everyone loves a bargain. But as the Fairtrade movement has shown, a good deal for the consumer can add up to a poor deal for the producer. Authors want their books to reach as many readers as possible – and there is plenty of evidence to show how this can benefit individuals and wider society – but authors also need (and deserve) to be paid.
In a survey in 2013, ALCS concluded that writing is a very risky profession with median earnings of around £11,000 for ‘professional’ authors and around £4,000 for all authors, less than one quarter of the typical wage of a UK employee.
Publishers and authors do not control the price at which a retailer sells books, even though a very low selling price could have a negative impact on the rest of the market. However, a reader’s buying choices can have a considerable influence on retailers, and on author incomes.
Independent and chain high street booksellers
“I very much want independent booksellers to survive and prosper. It’s not exaggerating to say that they are the lantern bearers of civilisation.”
Philip Pullman, July 2017
Most authors receive full royalties on books sold by high street bookshops, and the physical presence of books on the high street showcases the importance of reading, culture and learning. Many local bookshops also play an important community role, providing venues to promote reading groups and authors.
However, in addition to staff costs, independent bookshops and chain high street booksellers pay premium business rates for their high street presence. They do not have the space or clout to stock books in bulk, so they generally pay more for their stock than online retailers and supermarkets. They also cannot afford to treat bestsellers as loss leaders.
These overheads mean that high street booksellers often cannot compete with online retailers and supermarkets on price alone. But where they win hands down is in the experience for book buyers. The joy of browsing physical books and discovering a new work by a favourite author, or being led by serendipity to discover a new author, is not an experience that can be replicated online.
But while sales by independent bookshops and chains work well for authors, those retailers need customers to survive. So please, support your local bookshop.
Public libraries are a huge community benefit, offering free access to books and local resources.
Although there is no charge to you to use your local library, authors still receive a royalty on the initial purchase of their book by the library and a modest payment (called PLR) of around 8p each time their book is borrowed. This is currently only the case for physical books but, from 2018, PLR will also be paid on the remote lending of ebooks by public libraries.
However, many local libraries are facing threats of reduced funding and closure. We urge all readers to use and support their local library, and get involved with local campaigns if your own library is at risk.
Amazon and other online retailers
Amazon has done much to raise the profile of books and ensure their wide availability. With its print-on-demand and ebook facilities, it is a strong outlet for self-published works which might struggle to find a publisher, or another bookseller willing to stock them. Particularly with some forms of genre fiction, it is meeting what would otherwise be a gap in the market. However:
Amazon and royalty-generating book sales
Amazon can and does absorb the cost of selling some books at well below cost price when it chooses, and it insists on publishers giving it the same sort of discounts given to the largest high-street bookshops – though Amazon does not have to deal with the financial constraints faced by, and benefits from tax breaks not available to, high-street bookshops (the Booksellers Association reports that ‘Waterstones on Bedford High Street is paying 17 times more in business rates than Amazon’s operation in the same town’).
New and used
Amazon not only sells books it sources from publishers. It is also a marketplace for new and used books sourced from many other suppliers. It is the world’s largest second-hand book dealer and has almost total control of the ebook market. And it allows these multiple versions from multiple suppliers to be sold alongside regular retail sales, directly competing and often at prices which undermine regular sales.
Amazon’s New and Used tab for a book often displays a bewildering number of offers at wildly differing prices. Assuming that ‘used’ means second-hand, an author will not receive a royalty on such sales although they may have received a proper royalty on the initial sale of the book, and even ‘new’ in this context simply means ‘pristine’ rather than ‘a first sale of a book on which the author receives a royalty’.
Where are all these cheap books coming from? We know that some heavily discounted titles intended for export, surplus stock initially bought outright (or ‘firm’) by mail order companies or bookclubs, and remaindered stock turn up on Amazon Marketplace. For instance, we are aware of cases where only a hardback has been published in the UK, but there is a paperback version available in some other territory, and those paperbacks have leaked back into the UK market. In all these examples, authors receive very low royalties on the initial sale, and none of course on that copy’s re-sale on Amazon. At the same time, these versions cannibalise regular retail sales and can undermine the economic viability of publishing the work at all.
We are urging Amazon to commit to the undertakings it gave to authors at its inception by prioritising regular retail sales and making it very clear to buyers whether or not a copy is one which will generate an author royalty. Amazon’s principal loyalty may be to buyers not creators, but it should still treat the authors who contribute to its massive wealth fairly.
Where it is within their power, we look to publishers to regulate the circulation of what can end up as cheap second-hand copies. We also urge Amazon strenuously to police territorial rights, and not to sell books – in print or electronic form – at prices so low that they damage any chance that the book world (authors, publishers, high street bookshops which give physical prominence to books in a way Amazon cannot emulate) might have of remaining commercially viable.
Supermarkets, clothes shops, garden centres and other non-traditional outlets
Supermarkets and some major general retail chains buy in large quantities and in return demand very high discounts from publishers. Sometimes the titles in question are niche (e.g. art books) but more often are the anticipated bestsellers. In addition, books are a small part of these retailers’ business and often sold ultra-cheap as loss-leaders.
While publishers might conclude that the size of the order outweighs the size of the discount they are having to concede, authors receive much lower royalties when the publisher sells to the retailer at a high discount, the opportunities for independent booksellers and chains to sell the same books are undermined, and it leads to a false perception of a book’s true value and the costs of creating it.
Neither publishers nor authors can control the price at which the retailer sells the books, even if a very low selling price undermines authors and high-street bookshops. However, publishers can control the availability of such copies and we are encouraged by the positive response we are receiving to our campaign to ensure that authors are part of the decision-making.
The Book People and other mail order and direct sale companies
Such companies buy in large quantities outright, rather than sale or return, so the publisher is paid up-front. In return, they demand very high discounts from publishers, sometimes as much as 80% or more.
The issues are the same as with supermarket sales but with the added problem that because the retailer has acquired stock outright, and very cheaply, it is likely to offload any unsold copies under ‘new and used’ on Amazon, where those copies compete directly against royalty-generating sales. Control of the existence of such copies is in the hands of publishers and again we are campaigning hard to ensure that authors are part of the decision-making.
Second-hand and charity bookshops
Second-hand books have an environmental advantage and it is great to see books shared and loved, but authors receive no royalty or other payment from sales of second-hand books, and charity bookshops have an economic advantage over high-street booksellers because they stock for free, are staffed by volunteers and are exempt from business rates.
Discount high-street booksellers and garden centres
Such booksellers usually buy remaindered stock on which the author have been paid only a small royalty, but such copies do not usually compete directly with full price sales.
Authors receive a royalty on legitimate sales of ebooks. And from 2018, authors will receive a PLR payment for ebook loans from public libraries, mirroring the PLR setup for physical books – so do support your local library.
However, watch out for the following:
- Free download sites – almost all such sites are illegal. Publishers and authors receive no remuneration for ebooks downloaded from them, and many are fraudulent setups designed to harvest credit card details. Please don’t be taken in.
- Likewise ebook lending sites - ebook lending is usually unlawful in the UK unless it is done through public libraries or other sources authorised by the author or publisher.
- We are concerned at Amazon’s market dominance of the ebook market which enables it to insist on large discounts from publishers, and to sell ebooks at 99p or give them away free . Don’t forget there are other ebook retailers out there.
- 20% VAT is charged on ebooks but not on physical books. This means that for a £4.99 ebook 20% will be deducted in tax leaving less revenue for the publisher and author. We believe that reading should not be taxed.
There is no doubt that the true benefits of reading, both to readers and to wider society, are immeasurable, and of course all authors want to be read – so do please keep reading - we hope that this information might help inform the routes you take to discover the books you enjoy.
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