Monday, March 23, 2009

Down Economy Pushes Up Remainders

by Edward Nawotka -- Publishers Weekly, 3/16/2009

I don't understand why it's not shoulder-to-shoulder in here,” said Paul Mann, co-owner of the Book Gallery, a bargain books chain with six locations throughout Tennessee, Kentucky and Alabama. He was standing amid the 500 or so tables piled high with bargain, remainder and hurt books at the Spring Book Show, held March 6–8 at the Cobb Galleria in Atlanta. Mann was upbeat about the SBS. “Returns from Christmas are huge, and there's lots of great product to get jazzed about,” he explained. “With so much product coming in the warehouses, it's a buyer's market, since the companies have to move out old stock to make room for the new.”

So Mann was looking to score deals. Earlier this year, he purchased some five skids of books, 7,000–8,000 units, for which he paid a mere 12½ cents apiece, including shipping. “I held a '1 Day Sorting Sale' in which I left the books in the gaylords [boxes in which they were shipped], and priced every book marked $13.99 and lower for $1.99 and those above $14 for $2.99,” he said. “People got so excited they were diving into the gaylords face first. We sold about 1,500 books in the first 90 minutes, which is enough to cover the cost of all five skids. Everything we sold after that was profit.”

Mann isn't the only one experiencing a surge. “Bargain is up,” confirmed Jeffrey Press, president of World Publications Group of East Bridgewater, Mass., one of the largest remainder distributors. “The economy is bad and books are cheap entertainment. Things are so busy, we put in a permanent second shift at our warehouse.”

Yet the depressed economy isn't good for everyone. Smaller, hand-to-mouth operations are struggling and some have closed. “There were plenty of people we called to come whose phones were out of order,” said Larry May, director of the SBS. Some 850 people were registered for the event, a drop of 250 from 2008. “At the same time,” said May, “we still sold out the vendor space, had 15% new attendees and plenty of new sellers.”

Among notable new vendors was ToW Distribution, a graphic novel remainder house in Buford, Ga.; Parable from Franklin, Tenn.; a quartet from the U.K. (AB Books, 66 Books, PR Books and Columbia Marketing); and two university presses, the University of Alabama Press and the University of Tennessee Press. Daniel J.J. Ross, director of the University of Alabama Press, said the press has 100,000 books in overstock. “Previously, we would sell overstock direct, but came here as an experiment to see what kind of price we could get,” Ross said. He called the show “a learning experience” and observed that the sellers appeared to outnumber the buyers.

May estimated approximately 350 of those in attendance were buyers, including those from the big chains as well as discount outlets such as Citi Trends; largely absent were overseas buyers—currency devaluations prevented them from making the trip as they have in earlier years—and independent booksellers.

Among the issues being discussed at the show were publishers' plans to shrink lists, which could result in a tightening of the supply of remainders three to five years out. Most dismissed the buzz among publishers about trying to sell nonreturnable and higher sales of e-books as nonissues. All were following the saga of Borders, which should it fail would, in the words of one distributor, “dump tons of books” on the remainder shelves. (The Borders remainder buyer was at the show ordering books.)

“It's impossible to predict where things will go,” said May with a smile and a shrug. “This is the book business, after all.”

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