Sunday, June 17, 2012

Issues with wholesalers selling on internet marketplaces

I had the first very negative reaction to my prospecting email a few days ago. This was from a used and rare dealer. He said:

NO! Wholesalers in the book industry are now obsolete.  Retail prices online are lower than even what wholesalers are charging.  No reason to buy from wholesalers anymore.  Minimums are where wholesalers make their money but cause a lot of problems for the small retailer.  No minimums would be a better policy.  Since that is not an option -- then No Please do not send me emails.  Every "wholesaler" these days is retailing on the side and I believe that to be a dishonest practice because often they are charging their retail customers the same price {equivalent} except retail buyers only have to buy 1 book.

This was the first time I had a detailed negative response. This is much appreciated. For one thing, it took some effort to think it through and put it in writing, and especially because I now know what some booksellers might be thinking.

My easy and positive responses first:

Wholesalers are anything but obsolete. Publishers increasingly sell ALL of their returns to one or another of the wholesalers, which means there are big warehouses full to bursting of wonderful inventory at great prices, much of which is not available anywhere else.

As I've said elsewhere in this blog, the big buyers in bricks & mortar bookselling and internet marketplace sellers keep buying more and more. The businesses that buy these books are seeing their sales go up. They buy new arrivals, and they reorder again and again, so something must be right about this business.

Minimums are there to keep retail customers from buying this stock. They must come to you to buy. If you have a problem with a minimum, say so and it can probably be negotiated down. There is also much common sense in buying enough deeply discounted books to make it worth everybody's while. One example is freight costs, which are proportionate to the size of an order:  more books cost less to ship per book. The bottom line: With no minimums, what's the point of wholesaling at all?

Most booksellers to whom I send my prospecting email do not respond. There is a small number who respond by saying yes, please send lists, and an even smaller number who say no, please don't send lists. Some of those say "remove me from your mailing list," even as they are responding to my email asking permission to add them to my list, but I understand. I like spam about as much as anybody. The thing is, if you don't respond, I don't start sending you lists. I only send you lists if you tell me I can.

Many wholesalers do open stores and sell inventory on internet marketplaces. I have always had a problem with this for the obvious reason that they are competing with their and my customers. I have not, however, seen them selling at the wholesale cost. If they sell on a marketplace it's almost always at a multiple of the wholesale price, or at least at a significant number above it. The problem for the wholesalers is that much of their inventory goes unsold for many months and they can't carry that cost forever. Years ago, decades ago, this inventory cost pennies on the dollar and remainder wholesalers could afford to carry it almost indefinitely. Now that the business has matured, the publishers have raised prices to the point where it is a real challenge to make a profit, and the wholesalers have no choice but to sell wherever and whenever they can.

I'd love to see enough sales to prevent my wholesaler clients from having to sell on marketplaces and open stores, so stop ignoring the lists and order some books!!