Buyers complain that the $7.98 and $8.98 books aren't there any more, but even with mass merchandisers moving into the bargain book business and chains bidding directly on overstock, remainder houses counter that good titles abound. "Good things always come through," says Robin Moody, president of Daedalus Books & Music in Columbia, Md.
The problem is everybody's interpretation of 'good things' is of a bestseller nature" When bestsellers are available, Moody adds, "they go for really high bids. It's like offering opium to an addict."
Everybody's digging around in the pile of what's available," adds San Francisco—based commission rep Richard Fisher, who carries both Daedalus and Texas Bookman in his bag. "That really wasn't true five years ago. It used to be that people would buy what they could find and then sell it. I don't see any drought—I see a change of expectations. Really good books are being pushed out by really spectacular books."
The A List
In some respects, the bargain book business resembles the trade, with both chains and independents alike looking to the same handful of titles for 80% of their sales. "I don't feel like we're being offered fewer titles," says Leslie Wolburg, who buys for BAM's American Wholesale Book Company division. "We're all fighting over the same 10 books." On top of that, mass merchandisers and those once thought of as "nonbook" accounts have moved into the book business in a bigger way and want those same titles.
Since books really are everywhere these days, from gas stations to movie theaters, many booksellers view bargain as a way to make their stores stand out. And now that flat has become the new up for trade, bargain book buyers are getting even pickier than before. "Buyers are excluding whole categories of perfectly reasonable books—on lighthouses, on trains and solid histories," says Richard Fisher. "What they want are the same categories that work in the front of their stores."
"Bookstores have been having a hard time for the last three years," says Pandora's Books owner Amy Thomas, who operates two Pegasus Books stores in Berkeley, Calif., and a Pendragon Books in nearby Oakland. "We had to think that the loss in trade is permanent. We're looking at fewer books, and they have to be better. It's very competitive for my customers' attention; they're being offered loads of cheap books on the Internet." To fill that need, Thomas describes her buying as "more granular. We've always bought book by book. We can do that because there are so many sources for books." Plus, she has three other buyers to help her sift through the thousands of titles available from as many as 200 wholesalers, some of whom offer just a few titles online.
Jay Medgin, district center manager at Powell's Books in Portland, Ore., also takes an aggressive approach to filling bargain tables. "We travel far and wide and go to London a couple times a year," he says. At the same time, he's become more flexible. Powell's continues to add new bargain categories, like romance and chick lit. But the biggest change Medgin has seen has less to do with the books he's offered than the way he finds them. "Since I started buying three years ago," he explains, "we did an in-house program for our laptops so I can scan every title." Although he still needs 40 or 50 copies of a book in order to display it in all six Powell's stores, with his laptop he can cherry pick as few as two copies of a book for an individual store.
Still, technology can cut both ways. "Buyers used to say, 'That's interesting,' " says Daedalus's Moody. "Now they go into their computers and say, 'I only sold two, that's not enough.' " But if booksellers want to fill their bargain tables with more sure winners, what's happening to the rest?
Exclusives: Yea or Nay?
"Remainders are not what they used to be," says Judy Sisko, v-p of international sales and special markets at Holtzbrinck. She's made exclusive arrangements for St. Martin's, Picador and Tor with remainder wholesalers willing to buy all of their overstock, not just the A-list books. Less commercial lines, like FSG and Holt, continue to be sold via bids. And, on occasion, Sisko notes, all publishers pulp some books in order to create a better remainder market.
Holtzbrinck is not the only one to turn to exclusives to clear out unwanted inventory. Other large houses, including HarperCollins and Simon & Schuster, now sell that way. The impact on the remainder business has been so profound that CIROBE cofounder Marshall Smith ranks exclusivity—along with the Internet (see story, p. S6)—as one of the two biggest changes in bargain books in the past five years.
Off the record, one wholesaler refers to exclusives as "kind of like a new girlfriend." That's not far off the mark for Jeff Press, president of World Publications in North Dighton, Mass., who calls exclusivity "a bad thing for the most part," but continues to flirt with exclusive arrangements for hurts. The problem, as he sees it, is that exclusives tie up a lot of books. They can also be risky should any of the newer companies enticing publishers to give them all their books falter.
On the plus side, exclusivity has forced World Publications and other remainder wholesalers to modify their mix. "We don't get Tom Clancy, Robert Parker or Nora Roberts anymore," says Press. "When we got 100,000 copies of a Tom Clancy or a Stephen King, it was good, but it took forever to sell. And it wasn't that profitable."
Philosophical about changes in the business—"when one door shuts, another door opens"—Press notes that through World's proprietary line, JG Press, the company has the option of printing books for a changing market. Despite competition from exclusives, Press's inventory has increased about 25% this year, and he's looking to relocate World Publications from its current warehouse, which has more than 200,000 sq. ft., to a facility with more than twice that space.
Daedalus, too, has diversified its offerings by moving into entertainment with CDs and DVDs. Still, Moody worries about the impact of exclusivity on an already precarious business. "Exclusives always work out in the beginning," he observes. "But by the third year, if they haven't backed out, the deal falls apart." Of course, those who have exclusive contracts are much more sanguine about this option's long-term viability.
"With these contracts, we get the A titles and we get the F titles," says Dean Winegardner, president and CEO of nine-year-old American Book Company in Knoxville, Tenn., which has agreements with both Harper and Penguin USA. "We buy everything. The publishers don't have to worry about what they don't sell. It's better for them to sell everything." In fact, says Winegardner, "we've got more exclusives than we ever had. It used to be a small part of our business; now it's the majority."
As to exclusives contributing to a drying up of inventory available to booksellers, Winegardner points to the selectivity of the chains and the drop in the number of independents as the true culprits. "Really," he says, "to grow your business, you have to go outside the book business. Well over half our business now is in the nonbook market. The bulk of it is with 15- to 20-store general merchandise companies I would never have thought I'd sell a book to."
Exclusives have also been responsible for the growth of 10-year-old Strictly by the Book in Bridgewater, Mass., which has long-term agreements with Hachette Book Group—Warner, Hyperion, Disney, Phaidon and Little, Brown—along with other long-term exclusives with publishers like Scholastic. "We have plenty of inventory and are receiving plenty," says president and CEO Erez Bredmehl. "What we found, because we're purchasing millions of books a month, is that it forces us to continuously find new markets." According to Bredmehl, fewer than half of his company's books go into the traditional book market. "From what I see," he adds, "publishers who don't have long-term exclusive agreements are at least entertaining the idea."
Not everyone is sold on exclusivity, even among the major publishers. "We, Random House Inc., do not have an exclusivity arrangement with a partnering remainder house, and we have no expectation in the near future of changing that," says chief spokesperson Stuart Applebaum. "It's actually worked out well for us having a multiplicity of vendors."
So, where are all the books going? James Patterson and Nora Roberts are still available—but from only one vendor. John Grisham isn't available in hardcover, nor will he be any time soon, since Doubleday is committed to keeping his entire backlist in print. But for those looking for Nobel Prize—winning authors or smaller quantities of other big books, they're out there. While it's become more time-consuming to get the "good things," many in the industry remain optimistic. "The thing I feel hopeful about," says Pandora's Thomas, "is that people will always feel the urge to print and publish." And as long as that's the case, remaindering can't be far behind.
