Why is it too late to "make money" in business literature
The history of Boffo with books is inextricably linked - it was from them that this company began (initially - a niche boutique of business literature), we carefully selected them, read it ourselves, told about them in our mailings.
Nevertheless, the “book” story of Boffo comes to an end: we stop working with the business literature segment, around which our entire business once was built.
Photo of Germán Poo-Caamaño / CC
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A cursory overview of what is happening in the book market is not in favor of our decision. The General Director of the Russian Book Chamber reports that the market of published books in Russia not only does not stagnate, but even grows slowly: compared to the first half of 2015, the volume of published books increased by 5% compared to the first half of 2015.
Even earlier, book publishers and sellers said that Russians do not stop reading, the average bill in bookstores is increasing, and electronic publications are still preferred on paper — they simply buy them online with courier delivery.
It would seem that all the conditions are in favor of the online book boutique: live and enjoy the established business. But we see the situation from the inside, and our assessments do not always coincide with what is written about the book market as a whole.
The main mistake in this case is to perceive all market players as a single harmonious organism, in which publishers are engaged in the direct production of books (and only), stores - sales, and electronic literature stands out as an enfant terrible of classic book production. In fact, all these elements and their relationships are much more complicated than it seems at first glance - but more on that later.
So, our assessment of the current situation is different from the general or average market: recently we have recorded a steady decline in the share of sales of business literature. If earlier our monthly sales volume in this segment was measured at several million rubles, then recently it amounts to several hundred thousand, and in the future, according to our estimates, it will be even less.
“Hundreds of thousands are also quite a few,” you will say. However, the point here is that the margin of the store in this market is relatively small - we cannot “wind up” the price of a book several times as compared to the one for which we bought goods from the publisher. Yes, in percentage terms, these can be quite serious figures (at 25 and even 30%), but in absolute terms, 25% of the cost of 400-500 rubles turns into a rather modest "earnings". And given that sales are gradually declining, we understand that continuing to sell books as before will be extremely risky.
Just a couple of words about the risks: “paper” literature only at first glance seems to be a simple commodity. Yes, books formally have no shelf life, and they can be stored for an arbitrarily long time, compared to, for example, food or cosmetics. Yes, books do not lose their relevance for a long time, and Shakespeare and Tolstoy (and in the case of business literature, Peter Drucker and Dale Carnegie) people continue to read as readily as half a century ago.
However, books are goods with a relatively low turnover. Few people have the habit of buying a new book regularly once or twice a month: business literature, unlike the “light genre,” does not read “just to read” (such a book should be comprehended, “digested” and, ideally, start follow the described recommendations before starting a new batch of tips). On the other hand, the fashion for collecting and home libraries is also becoming a thing of the past.
If we talk about business publications, they are acquired in order to solve a specific task, to make a gift to a work colleague, or simply on the wave of a general interest in a topic. Compared with the same food products, business books are bought much less often - and on average, they are not much more expensive (or even cheaper) bottles of wine, large packs of elite tea or coffee, which, of course, people acquire more than once a year. At the same time, paper books are sensitive to humidity and temperature, so their storage is not much different from the same non-perishable food.
A good and realistic description of what “normal people” should have in this connection: loaders and trucks, pallets, elevator, operators and packers is not the type of goods that an employee of a small online store can do in case of “one left” throw in the trunk of your own car. In addition, the weight of the books determines how much the courier can carry with them (if the store delivers) and how many “flights” he will need to do during the day (and this also increases the cost of the store — to serve all customers on time, with one or two couriers no longer do).
As a result, we come to the fact that from the seller’s point of view, paper books are not a simple product: they require special storage conditions, are not inferior to other “heavy” goods during transportation and courier delivery, are sold with a small (in absolute values) mark-up and at the same time does not cause the reader “persistent addiction” and the constant desire to buy more.
Now take a look at the situation on the part of the buyer. For him, the central object, around which the whole purchase "revolves", is the book (product), and not the store in which he bought it. And here we return to the issue of market heterogeneity. In the ideal from the point of view of the seller’s world, publishers are engaged in typography, settle issues with authors, spend certain amounts on the promotion of their books. Stores buy reprints from publishers, and then they sell these books.
In reality, the situation is changing: the cost of printing services is growing, the costs of publishing houses are increasing, therefore, in order to stay afloat, they begin to sell books themselves: they create their own online stores. As a result, an independent seller and publisher from partners become competitors.
In this case, the buyer's sympathies remain on the side of the publisher. The buyer knows this company (there are not so many of them on the Russian market), he is already aware of what she is doing, and by default has more confidence in the one who sells “first-hand”. Choosing a book, the buyer primarily focuses on the brand of the publisher - and does not see any contradictions when a “third party” ceases to be engaged in sales.
Everything that a third-party bookstore can offer a customer: convenient delivery and payment, high-quality service, recommendations in the selection of books, in this case will go to the background. In order to understand how important and valuable this additional set of services is, the client needs to make at least one purchase - and not the fact that he wants to “take risks.”
In addition, the publisher can play the latest and most reliable card of his own: to sell the book cheaper, without that markup, which inevitably would have to add to the value of the third-party seller (or with a lower markup). And in this case, the sympathies of the buyer will also be obvious.
In this difficult relationship between publishers and sellers, there is another pitfall: promotion of new authors and books. In theory, this task lies on the publisher’s shoulders, but for some reason or other (for example, a banal price increase for paper, which, according to some publishers, last year was 30-40% ), the seller has to promote the book. And this means that you need to pay for additional services (copywriters, marketers, advertising specialists), which the entire market will actually “take advantage of”: having learned about an interesting new book, the future reader will go and ... buy it directly from the publisher - there is “safer” and cheaper.
For large marketplaces and Internet giants with huge commodity matrices, this situation will be uncritical - they sell a lot of other goods and subsidence of this direction may seem like a slight injection. Moreover, many of them can afford the luxury of working with virtually zero profit in this segment, if it maintains the buyer's interest in other categories of goods and creates the feeling that "there is everything in this store." However, a small store specializing in books (and in a rather narrow segment) will simply not “compete” with the publisher.
E-books: another, at first glance, the obvious direction in which you can develop a small book boutique. This direction does not require a warehouse and a courier service at all, so it seems more cost-effective than the version with “physical” books, although even here nobody canceled the competition with publishing houses.
In addition, e-books are just the format in which business literature is likely to be most in demand in the future: even those who believe that “paper” books are too early to die, usually cite the example of long-playing formats for children, teenage and educational, but not business literature.
However, go to the sale of electronic books is not so easy. Firstly, the effectiveness of their sales is directly related to the breadth of the range: in this market, those who offer the client the widest possible choice of literature (which is not very consistent with the concept of a niche boutique) benefit.
Secondly, in order to engage in the sale of e-books, the store needs to make fixed payments monthly (to an intermediary who, in turn, pays the copyright holder) - regardless of sales, which in the case of a small store is also fraught with high risks.
You can, of course, avoid this, and enter into a direct contract with each author - but, given the requirements for the assortment, the duration of the negotiations and the cost of such contracts, this scenario becomes difficult to implement. And it becomes completely unrealistic when it turns out that the author has concluded an exclusive agreement with a certain publishing house that will not work around it.
Conclusion: in this market, large players also win: due to the widest possible range, they diversify the risks associated with the need for monthly deductions, and at the same time increase the chance that the occasional buyer will become their regular customer.
Over the 12 years of its existence, Boffo turned from a niche boutique business book into virtually three stores under one brand: the culinary boutique Boffo Gourmet and the audio shop Sound Art. Now Boffo Gourmet is becoming our centerpiece: we plan to concentrate on what we call “small home joys” (and these are various exotic and “gourmet” foods and spices, as well as home accessories), and on gift sets (which we also form from the list of "home joys").
Boffo Gourmet
Literature remains in the form of cookbooks and gift editions - this is the segment of paper books that successfully complements our concept and is unlikely to become unclaimed or fully digital in the foreseeable future. This is our version of the “bypass” of the book crisis (which, we believe, will sooner or later catch up with stores selling “paper” literature). As for other entrepreneurs, they can take the following from the whole story:
1. The statistics “for the market as a whole” may say nothing: yes, there is a slight increase in the book business, yes, the buyer leaves more money in the stores, but publishers, driven by cost increases, are ready to change the balance in this market - and “ squeeze out of it other stores - while paper books are still being sold.
2. Books - "heavy" product. In the literal and figurative sense. They have a relatively low turnover, they are sold with a small (in "monetary terms") surcharge, sensitive to storage conditions, require additional efforts during transportation and delivery to the customer.
3. The publisher is often not interested in promoting their own books (or simply cannot find enough money for this). Therefore, in order to find out about the book or the author, you will have to work. And the client will go to the publisher - if only because he has already formed a recognizable brand and can sell the book cheaper.
4. E-books are likely to swallow the paper market. But niche or small players are unlikely to earn it.
5. The best solution in a situation with an actively changing market is to constantly monitor performance and trends. If you feel that the market in which you work is narrowing, do not wait until the last: find adjacent niches in which you can continue to develop. If you sell business literature - think about it right now.
PS Here you can find books that we sell at a price lower than the purchase, and here and here the most affordable options are collected.
PPS Our blog on Geektimes .
Nevertheless, the “book” story of Boffo comes to an end: we stop working with the business literature segment, around which our entire business once was built.
Photo of Germán Poo-Caamaño / CC
')
The growth of the market for books says nothing
A cursory overview of what is happening in the book market is not in favor of our decision. The General Director of the Russian Book Chamber reports that the market of published books in Russia not only does not stagnate, but even grows slowly: compared to the first half of 2015, the volume of published books increased by 5% compared to the first half of 2015.
Even earlier, book publishers and sellers said that Russians do not stop reading, the average bill in bookstores is increasing, and electronic publications are still preferred on paper — they simply buy them online with courier delivery.
It would seem that all the conditions are in favor of the online book boutique: live and enjoy the established business. But we see the situation from the inside, and our assessments do not always coincide with what is written about the book market as a whole.
The main mistake in this case is to perceive all market players as a single harmonious organism, in which publishers are engaged in the direct production of books (and only), stores - sales, and electronic literature stands out as an enfant terrible of classic book production. In fact, all these elements and their relationships are much more complicated than it seems at first glance - but more on that later.
As we see the situation, we
So, our assessment of the current situation is different from the general or average market: recently we have recorded a steady decline in the share of sales of business literature. If earlier our monthly sales volume in this segment was measured at several million rubles, then recently it amounts to several hundred thousand, and in the future, according to our estimates, it will be even less.
“Hundreds of thousands are also quite a few,” you will say. However, the point here is that the margin of the store in this market is relatively small - we cannot “wind up” the price of a book several times as compared to the one for which we bought goods from the publisher. Yes, in percentage terms, these can be quite serious figures (at 25 and even 30%), but in absolute terms, 25% of the cost of 400-500 rubles turns into a rather modest "earnings". And given that sales are gradually declining, we understand that continuing to sell books as before will be extremely risky.
Just a couple of words about the risks: “paper” literature only at first glance seems to be a simple commodity. Yes, books formally have no shelf life, and they can be stored for an arbitrarily long time, compared to, for example, food or cosmetics. Yes, books do not lose their relevance for a long time, and Shakespeare and Tolstoy (and in the case of business literature, Peter Drucker and Dale Carnegie) people continue to read as readily as half a century ago.
However, books are goods with a relatively low turnover. Few people have the habit of buying a new book regularly once or twice a month: business literature, unlike the “light genre,” does not read “just to read” (such a book should be comprehended, “digested” and, ideally, start follow the described recommendations before starting a new batch of tips). On the other hand, the fashion for collecting and home libraries is also becoming a thing of the past.
If we talk about business publications, they are acquired in order to solve a specific task, to make a gift to a work colleague, or simply on the wave of a general interest in a topic. Compared with the same food products, business books are bought much less often - and on average, they are not much more expensive (or even cheaper) bottles of wine, large packs of elite tea or coffee, which, of course, people acquire more than once a year. At the same time, paper books are sensitive to humidity and temperature, so their storage is not much different from the same non-perishable food.
In addition, books are, oddly enough, a “heavy” (literally) product: high-quality literature printed on coated paper, in hardback, weighs a lot in a banal way.
A good and realistic description of what “normal people” should have in this connection: loaders and trucks, pallets, elevator, operators and packers is not the type of goods that an employee of a small online store can do in case of “one left” throw in the trunk of your own car. In addition, the weight of the books determines how much the courier can carry with them (if the store delivers) and how many “flights” he will need to do during the day (and this also increases the cost of the store — to serve all customers on time, with one or two couriers no longer do).
As a result, we come to the fact that from the seller’s point of view, paper books are not a simple product: they require special storage conditions, are not inferior to other “heavy” goods during transportation and courier delivery, are sold with a small (in absolute values) mark-up and at the same time does not cause the reader “persistent addiction” and the constant desire to buy more.
How the buyer sees the situation
Now take a look at the situation on the part of the buyer. For him, the central object, around which the whole purchase "revolves", is the book (product), and not the store in which he bought it. And here we return to the issue of market heterogeneity. In the ideal from the point of view of the seller’s world, publishers are engaged in typography, settle issues with authors, spend certain amounts on the promotion of their books. Stores buy reprints from publishers, and then they sell these books.
In reality, the situation is changing: the cost of printing services is growing, the costs of publishing houses are increasing, therefore, in order to stay afloat, they begin to sell books themselves: they create their own online stores. As a result, an independent seller and publisher from partners become competitors.
In this case, the buyer's sympathies remain on the side of the publisher. The buyer knows this company (there are not so many of them on the Russian market), he is already aware of what she is doing, and by default has more confidence in the one who sells “first-hand”. Choosing a book, the buyer primarily focuses on the brand of the publisher - and does not see any contradictions when a “third party” ceases to be engaged in sales.
Everything that a third-party bookstore can offer a customer: convenient delivery and payment, high-quality service, recommendations in the selection of books, in this case will go to the background. In order to understand how important and valuable this additional set of services is, the client needs to make at least one purchase - and not the fact that he wants to “take risks.”
In addition, the publisher can play the latest and most reliable card of his own: to sell the book cheaper, without that markup, which inevitably would have to add to the value of the third-party seller (or with a lower markup). And in this case, the sympathies of the buyer will also be obvious.
In this difficult relationship between publishers and sellers, there is another pitfall: promotion of new authors and books. In theory, this task lies on the publisher’s shoulders, but for some reason or other (for example, a banal price increase for paper, which, according to some publishers, last year was 30-40% ), the seller has to promote the book. And this means that you need to pay for additional services (copywriters, marketers, advertising specialists), which the entire market will actually “take advantage of”: having learned about an interesting new book, the future reader will go and ... buy it directly from the publisher - there is “safer” and cheaper.
For large marketplaces and Internet giants with huge commodity matrices, this situation will be uncritical - they sell a lot of other goods and subsidence of this direction may seem like a slight injection. Moreover, many of them can afford the luxury of working with virtually zero profit in this segment, if it maintains the buyer's interest in other categories of goods and creates the feeling that "there is everything in this store." However, a small store specializing in books (and in a rather narrow segment) will simply not “compete” with the publisher.
E-books: new market and new risks
E-books: another, at first glance, the obvious direction in which you can develop a small book boutique. This direction does not require a warehouse and a courier service at all, so it seems more cost-effective than the version with “physical” books, although even here nobody canceled the competition with publishing houses.
In addition, e-books are just the format in which business literature is likely to be most in demand in the future: even those who believe that “paper” books are too early to die, usually cite the example of long-playing formats for children, teenage and educational, but not business literature.
However, go to the sale of electronic books is not so easy. Firstly, the effectiveness of their sales is directly related to the breadth of the range: in this market, those who offer the client the widest possible choice of literature (which is not very consistent with the concept of a niche boutique) benefit.
Secondly, in order to engage in the sale of e-books, the store needs to make fixed payments monthly (to an intermediary who, in turn, pays the copyright holder) - regardless of sales, which in the case of a small store is also fraught with high risks.
You can, of course, avoid this, and enter into a direct contract with each author - but, given the requirements for the assortment, the duration of the negotiations and the cost of such contracts, this scenario becomes difficult to implement. And it becomes completely unrealistic when it turns out that the author has concluded an exclusive agreement with a certain publishing house that will not work around it.
Conclusion: in this market, large players also win: due to the widest possible range, they diversify the risks associated with the need for monthly deductions, and at the same time increase the chance that the occasional buyer will become their regular customer.
What is the result
Over the 12 years of its existence, Boffo turned from a niche boutique business book into virtually three stores under one brand: the culinary boutique Boffo Gourmet and the audio shop Sound Art. Now Boffo Gourmet is becoming our centerpiece: we plan to concentrate on what we call “small home joys” (and these are various exotic and “gourmet” foods and spices, as well as home accessories), and on gift sets (which we also form from the list of "home joys").
Boffo Gourmet
Literature remains in the form of cookbooks and gift editions - this is the segment of paper books that successfully complements our concept and is unlikely to become unclaimed or fully digital in the foreseeable future. This is our version of the “bypass” of the book crisis (which, we believe, will sooner or later catch up with stores selling “paper” literature). As for other entrepreneurs, they can take the following from the whole story:
1. The statistics “for the market as a whole” may say nothing: yes, there is a slight increase in the book business, yes, the buyer leaves more money in the stores, but publishers, driven by cost increases, are ready to change the balance in this market - and “ squeeze out of it other stores - while paper books are still being sold.
2. Books - "heavy" product. In the literal and figurative sense. They have a relatively low turnover, they are sold with a small (in "monetary terms") surcharge, sensitive to storage conditions, require additional efforts during transportation and delivery to the customer.
3. The publisher is often not interested in promoting their own books (or simply cannot find enough money for this). Therefore, in order to find out about the book or the author, you will have to work. And the client will go to the publisher - if only because he has already formed a recognizable brand and can sell the book cheaper.
4. E-books are likely to swallow the paper market. But niche or small players are unlikely to earn it.
5. The best solution in a situation with an actively changing market is to constantly monitor performance and trends. If you feel that the market in which you work is narrowing, do not wait until the last: find adjacent niches in which you can continue to develop. If you sell business literature - think about it right now.
PS Here you can find books that we sell at a price lower than the purchase, and here and here the most affordable options are collected.
PPS Our blog on Geektimes .
Source: https://habr.com/ru/post/313396/
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