The Bookseller.com

8th January 2009

Laurence Orbach is chairman and c.e.o. of Quarto.

Back to basics

22.05.08

Amazon is flexing its muscles. One publishing executive defiantly stated last week that the time had come to take a stand against the trading demands of the dominant internet bookseller. But the UK already has the most generous trading terms of any major publishing nation, so maybe the moment has passed.

I’ve long thought that low profitability in the book industry is a greater threat to survival than new media. These media will either establish themselves as vital, or not. Right now, as the Amazon assault demonstrates, we have to deal with the ever-present “threats”.

What’s at the root of the problems is not simply extortionate demands from retailers. It’s abdication from responsibility by executive management, who often trade long-term health for short-term gains.

Book publishing is also ex-growth (i.e. a mature market). In building Quarto, we’ve made acquisitions. We’ve looked at imprints being disposed of by much larger companies, and I’ve been struck, and appalled, by some of what I’ve seen, particularly mission statements paying lip service to what the business produces, but proclaim that the creation of a happy working environment is their “purpose”. What fatuous nonsense is this?

It should go without saying that the purpose of a business is to make money, but sometimes you have to restate the obvious. A pleasant environment and good benefits do not make a business successful; rather, a successful business depends on effective staff and can, and should, provide decent wages and benefits.

We all want pleasant working conditions, but these have to be earned. It’s more important to offer staff the opportunity to be stretched and challenged than to provide a gym. It’s vital for people to believe that their work, which consumes most of their waking hours, is worthwhile, and contributes.

It’s time for us to focus more on the imperatives of our businesses. If one is in uncommercial arrangements with major customers, it’s better to withdraw. The alternative, of knowingly entering into un­economic relationships, not only encourages the aggressive customer but, over the longer term, also drives out the economic rationale for the buyer, as he is confronted with a landscape of crippled vendors. It’s vital to the health of businesses to make sure that your customer, or vendor, is making money in dealing with you.

Returning to Amazon, it’s possible that their business model is flawed and can’t make money. I don’t believe that. Maybe taking a stand now will work wonders, but I’m a sceptic.

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