New Star Blogs

My Careen as a Bookseller (7) :: Plan A

Elliott Bay Books

This is what a prop­er­ly func­tion­ing just-in-time inven­to­ry sys­tem for books looks
like. Elliott Bay Books in Seat­tle, not so far away real­ly.
Pho­to by sea turtle/Creative Com­mons.

My career as a book­seller real­ly began in the late 1990s, when I dreamed up a scheme for get­ting New Star’s books into a few stores, a scheme that I called Plan A. My People’s Co-op con­nec­tion was the key here. Plan A would nev­er have hap­pened, had store man­ag­er Ray Viaud not accom­mo­dat­ed my pro­pos­al back in 1997. Plan A saved New Star Books when our dis­trib­u­tor failed in 2002, and the rest of the Cana­di­an pub­lish­ing indus­try was decid­ing to go all-in with Indi­go-Chap­ters.

To recap, the prob­lem I was grap­pling with as New Star’s pub­lish­er was the shrink­ing space for our books — in spite of the sup­pos­ed­ly bur­geon­ing retail book trade. The People’s Co-op was typ­i­cal, in that New Star’s sales of $1K to $2K per year there had fall­en to less than $300. The stan­dard nar­ra­tive was that us small pub­lish­ers had lost touch with the mar­ket. Our books were being ordered in 1’s and 2’s and 3’s instead of the for­mer 5’s and 10’s, because that’s what the “mar­ket” was dic­tat­ing. Don’t wor­ry, our reps, and the book­store buy­ers, reas­sured us; “just in time” inven­to­ry man­age­ment tech­niques would see to it that books for which there was demand would be stocked.

But that promise was not kept. Most of the time, those 1’s and 2’s and 3’s would not be re-ordered when they sold, sim­ply because they fell under the bookseller’s radar. A book that was ini­tial­ly ordered in quan­ti­ties of less than 5 had already been judged as not like­ly to sell in the quan­ti­ties required by the book­seller. The soft­ware tools they were increas­ing­ly reliant on were not trained to spot poten­tial steady-sell­ers, they were look­ing for bestsell­ers. Worse, our books, which since the ear­ly 1990s were avail­able through main­stream dis­trib­u­tors, were also being returned pre­ma­ture­ly to those dis­trib­u­tors to free up the bookseller’s cred­it: the tech­nique of “churn­ing” that I described in this post.

There is a fun­da­men­tal truth about book buy­ers that has been stead­fast­ly ignored by the archi­tects of this re-engi­neer­ing of the book trade. It is the fact that, as sur­vey after sur­vey and study after study has shown, some­where between two thirds and three quar­ters of all book pur­chas­es are what they call “impulse pur­chas­es”. That is, the vast major­i­ty of books are pur­chased by peo­ple who had no inten­tion of buy­ing that par­tic­u­lar book that day. Maybe they had heard some­thing about it, maybe the cov­er caught their eye, maybe the book­seller hand­sold it to them: in any case, the book was pur­chased only because of its pres­ence in the book­store.

Let me under­line the impor­tance of the “impulse pur­chase”. The most valu­able bit of real estate in any retail estab­lish­ment is the cash desk. Shop­keep­ers will clut­ter that space with dis­plays of inex­pen­sive, but high-mar­gin, items that shop­pers will pick up on impulse as they pay for their pur­chas­es. Retail­ers who demand pay for dis­play (gro­cery stores, and the stores mod­elled on them: e.g., chain book­stores) often won’t rent this space out at all, but reserve it for them­selves.

The con­cept of “just in time” inven­to­ry is based on the premise that a cus­tomer enter­ing the book­store has a shop­ping list, lay­ered with the belief that they will ask the book­seller to spe­cial order a title they can­not find. This sup­pos­ed­ly amount­ed to pret­ty much the same as hav­ing stocked the book all along. Mean­while, the store’s valu­able real estate could be devot­ed to the “big” books from the “big” pub­lish­ers because, well, that’s what was going to be dri­ving their sales, and their prof­itabil­i­ty, here in the New Econ­o­my.

In my head I heard what was being said, but in my guts I knew it was nuts. “Just in time” was nev­er in time. Con­sumers would not be rewiring their behav­iour to con­form with some com­merce professor’s self-serv­ing the­o­ry about prop­er behav­iour in a cap­i­tal­ist mar­ket­place. Book buy­ers, nev­er the most tractable of con­sumers, con­tin­ued to behave the way they had always done. Some­times they spe­cial-ordered a book, sure. (More and more, that “spe­cial order” was a book that would have been on the shelf under the old regime.) But most of the time, at least two times out of three any­way, they lim­it­ed their pur­chas­es, includ­ing their unplanned pur­chas­es, to what was avail­able in the store that day. And if what had been cho­sen for them didn’t appeal, they just left it. This “com­mand econ­o­my” in books, which looks more like the way the Sovi­et Union did busi­ness than it resem­bles any the­o­ret­i­cal mod­el of free-mar­ket cap­i­tal­ism, is as prob­a­bly the biggest dri­ver of the returns bloom that has seen return rates rock­et­ed from 10 to 15 per­cent on the eve of the giant chains, to the present-day 30 per­cent or more which is con­sid­ered “nor­mal” and work­able by main­stream pub­lish­ers.

What if, I thought, New Star was able to replen­ish that ini­tial order for 1 or 2 of our books when they sold? So I asked our man­ag­er Ray at the store if I could run a lit­tle exper­i­ment. He was quite agree­able (an act of gen­eros­i­ty I did not ful­ly com­pre­hend until I learned, years lat­er, how dif­fi­cult con­tem­po­rary book­store sys­tems make this sort of behav­iour). Start­ing in 1997, the People’s Co-op stopped order­ing our books through what­ev­er big Toron­to-based dis­trib­u­tor they were get­ting our books from, and allowed us to sup­ply direct­ly, mon­i­tor stock lev­els, and replen­ish as nec­es­sary.

The effect was instan­ta­neous. Sales did not dou­ble, and they did not triple. They quadru­pled. Not over an extend­ed peri­od of time, either: overnight. One year after we imple­ment­ed Plan A, our sales at the People’s Co-op had gone from less than $300 in the pre­vi­ous year, right back up to $1,500 — the same lev­el it had been at, before all this crazy ratio­nal­iza­tion gripped the trade.

If a book sold, we replaced it. If the replace­ment book sold, we replaced that. If a book sold steadi­ly, we made sure that we were nev­er out of that title: “just-in-time” inven­to­ry in actu­al­i­ty. In let­ting New Star try Plan A, Ray not only pro­vid­ed some much-need­ed vin­di­ca­tion for my unortho­dox views; he inad­ver­tent­ly saved the press. Because thanks to the People’s Co-op exam­ple I was able to point to, I was able to per­suade fif­teen or six­teen oth­er book­sellers over the next decade or so, to sign on with New Star’s Plan A. For a time around the col­lapse of our dis­trib­u­tor, Gen­er­al Dis­tri­b­u­tion Ser­vices, the cash flow from our Plan A stores made it pos­si­ble for New Star to con­tin­ue. At its peak, Plan A was bring­ing in around 20 per­cent of our sales to the inde­pen­dent sec­tor — an aston­ish­ing fig­ure; remem­ber that Plan A was nev­er more than 15 or 16 stores at any time. Over the ten years of its exis­tence, Plan A sold prob­a­bly 4,000 to 6,000 books that would oth­er­wise not have been bought, because they would not have been avail­able for pur­chase.

Plan A went too much against the grain of the book trade, how­ev­er; and a few years ago I was oblig­ed to wrap it up. I’ll delve into Plan A, and the rea­sons for its demise, in the next post in this series. But in the mean­time, Plan A, and the People’s Co-op Book­store, and the store’s man­ag­er, Ray Viaud, saved New Star Books.

Start from the begin­ning: My Careen as a Book­sellers (1) :: Before It All Began

Con­tin­ue read­ing My Careen as a Book­seller (8) ::  Cul­ture Clash