Waterstone’s is calling for a higher discount flat rate on books in exchange for scrapping its promotion fees, which is a move that has been described as “fairer and more transparent” by some publishers. Indie publishers are particularly in favour.
The bookselling chain's m.d. James Daunt has been carrying out margin negotiations with publishers, proposing the general principle of increasing the percentage of discount it gets for books while dropping charges for promoting titles. This would enable Waterstone's to have more autonomy over the products it showcases. Last week The Bookseller reported that the chain was dropping its decade-long three-for-two promotion, a move that has also been welcomed by publishers.
It is believed Daunt has asked some publishers for discounts of around 59%–60%, a significant increase for some, although it is thought the terms vary between companies, with many still to reach a final agreement. The Waterstone's m.d. is also thought to be taking a tougher line over discount levels with the larger publishers than with smaller companies. A publisher liaison team of eight people , is also being established.
Andrew Franklin, m.d. of Profile Books, said Daunt's new promotion plans were a positive step. He said: "[Daunt] wants to decide what to promote, where and when. He's not interested in renting or selling promotional space.
The flat rate is a stroke of genius. It's simpler, clearer, more transparent and fairer—it's not about publishers buying the space, bribing the booksellers. It's a fundamental dfference and it's terrific. It's an opportunity to liberate booksellers."
Juliet Mabey, co-founder of Oneworld Publications, said she thought the proposed system was the right decision for Waterstone's, and called on publishers to support it. She said: "Though the new, steeper flat rate discount system will mean lower margins for publishers, it shares the high cost of running high street bookshops. Oneworld has a very strong backlist, and this move to one discount with no promotion fees will ensure Waterstone's can broaden its range, and offer a more level playing field for the independent publishers.
"This is very much the direction we'd like to see Waterstone's move [in], and I think customers will welcome the changes in store too." However, Alessandro Gallenzi, founder of Alma Books, said that while his hopes were high that Waterstone's new approach could work well, the higher discount request was still a concern, though he had not yet heard exact figures.
Gallenzi said: "When people come and ask for more discount you are always worried. At 60% to 65% you make no profit and we have to protect our margins."
Some publishers have reported that the pre-Christmas margin negotiations are taking place at a difficult time of year, putting them under pressure to tie up consultations quickly.
One said: "It's a bit like a gun held to the head if they say ‘we're not going to do anything until this is agreed'."
Another publisher said: "These changes need to be rushed through as stock levels are still low. The peak pre-Christmas selling season is almost upon us so it is understandable that many publishers are feeling a bit coerced."