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The Steve Laube Agency

Helping to Change the World…Word by Word

The Steve Laube Agency

The Steve Laube Agency

Helping to Change the World Word by Word

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Home » Book Business » Page 7

Book Business

Hidden Retail Economics

By Steve Laubeon October 18, 2021
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I find the world of retail and bookselling economics fascinating. Doesn’t make for scintillating party conversations, but I digress. Below is a video that you should watch first as I have a few thoughts related to its content below the video. (If you cannot see the video in your newsletter feed, please visit the blog on our website where it is embedded.)

This particular video is a few years old, but many of the principles remain the same. While there may be a reduction in the practice of “slotting fees” (paying for shelf space in the store), there is still an ongoing form of it, even in the book retailing world. In many ways this “pay for positioning” has moved online.

You’ve read about Amazon ads or have personal experience with them. While not a slotting fee per se, the more you spend for a spot the greater the chance of that placement will be seen by the reader you are trying to reach. The same for Google ads, which unapologetically puts it this way on their own website:

“Google Ads runs an auction every single time it has an ad space available–on a search result, or on a blog, news site, or some other page. Each auction decides which ads will show at that moment in that space. Your bid puts you in the auction.”

Thus, the more you pay, the more likely your ad will be seen.

Next time you see an ad online, remember that it is highly likely that someone paid so that it would be seen by you, based on your search history, your purchasing history, and other sorts of data that rolls around, hidden behind the curtain.

Personal History

Back in the late 80s I was the national book buyer for a Christian bookstore chain. We were in the fledgling days of combining and leveraging our buying power with publishers. We created a Christmas catalog in which publishers could buy ad space. If they did so, I would then place orders with those publishers for all our stores in sufficient quantity to support the advertising. There were considerable negotiations for the fee the publisher would pay and the discount the publisher would give us based on the number of books we would buy. Considering that nothing was computerized in those days, it was a rather complicated process!

One publisher came to us, asking to buy “screen time” on the TVs in our video departments. They paid to have a sample of their kid’s video series run on a loop for a minimum of six hours per day during the Christmas season. That would be an example of a “slotting” or “positioning” fee. It worked really well because parents shopping in the store would park their kids in that section and afterward realize how good the product was and buy copies for family and friends. (The downside is that it drove the store staff buggy hearing the same songs over and over again!)

Back then it was also well known that Barnes & Noble and Borders would charge a publisher for “front of store” positioning and for “end cap” space.

Implications for Authors

If you are publishing with a major traditional publisher, you can be assured that this is nothing new to your publisher. They have been fighting for “positioning” for years and hopefully are doing the same for your books.

If you are publishing independently, you must fight these battles by yourself and use your own funds to underwrite the effort. You have considerable flexibility in changing the ads and experimenting to find what works and what doesn’t. But you are the entrepreneur doing the work and paying the bill.

I know of one couple who had a nonbook business selling on Amazon’s Marketplace, a wonderful “mom and pop” operation run out of their house. They did extremely well for many years until sales began to tail off due to other vendors paying more for the ad spaces (slotting fees).

They mentioned one case where a particular product retailed for $5. Their gross profit on that product was $4 because they bought it in bulk overseas for $1. They had a budget of $1.50 per unit sold for advertising space. (Are you following the math?) Suddenly, the price for that ad space increased to $2. Then to $3. And to their shock they found competitors willing to pay $4.50 per ad space for that $5 product.

Amazon and Google didn’t care. They were happy to collect the fees in the bidding wars. But my friends ended up selling their business to a larger company whose purchasing power allowed them to compete better in that arena and be profitable.

Educate Yourself

Never forget that publishing is a business. Sure, in our industry it is a business with a ministry purpose; but it is still a business. Videos like the one above and posts like this are my attempt to help us all have a better understanding of the business side of our Kingdom calling.

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Category: Book Business, Economics

The Secondary Market for Books: Friend or Foe?

By Tamela Hancock Murrayon September 15, 2021
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Understandably, most artists want to earn the highest royalties for their hard work. Remember how Garth Brooks wanted a secondary royalty on his music, thereby kicking off a feud with secondary-market retailers? (See the article linked here.)  So, as an author, do you feel that the secondary market is a friend or foe? I think this market is our friend. Here are a few reasons why: …

Read moreThe Secondary Market for Books: Friend or Foe?
Category: Book BusinessTag: Used Books

Supply Chain Blues

By Steve Laubeon September 13, 2021
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Two weeks ago I wrote of the Slushpile Blues. Today is another scintillating topic. Supply chain blues. By “supply chain” I mean the various steps along the way for a vendor to have a final product to sell to a consumer. For electronics, like your phone, it means collecting various pieces before assembly: the battery, the camera lens, the transistors, the memory chip, the glass, and more. If any …

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Category: Book Business

What Goes on the Copyright Page?

By Steve Laubeon August 9, 2021
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I have an odd habit born of being in this industry for four decades. Whenever I pick up a physical book, I look at the front cover, back cover, and then the copyright page. I know, it’s a rather nerdy thing to do; but you would be surprised what information can be found there and what it means. The copyright page is placed after the title page and should always be on the left-hand side …

Read moreWhat Goes on the Copyright Page?
Category: Book Business, Common Questoins, Copyright Issues, Indie, Publishing A-Z

The Pressure Is Off

By Dan Balowon August 5, 2021
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Last week, I wrote about the pressure on writers to write well and compelling enough to gain and keep readers. Today, I promise to take some pressure off. For Christian writers only, if you feel the pressure to affect a reader’s life rests entirely on your own ability to write well, here are some red-letter words direct from the Creator God. From the Old Testament book of Job, chapter 38, verses …

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Category: Book Business, Inspiration, The Writing Life, Theology

The Pressure Is On

By Dan Balowon July 28, 2021
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For anyone creating material in any media, pressure is high, not only to gain users but to keep users. Just because someone subscribes or buys what you create doesn’t mean they are using it. I’ve seen several studies indicating for an average book only 60% that are purchased are ever opened. Let that statistic sink in. And since dedicated e-book devices and smartphones are two-way communicators, …

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Category: Book Business, Technology, The Publishing Life, The Writing Life

Coping With Publishing Conflict

By Dan Balowon July 7, 2021
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Here’s a big secret about book publishers: Human beings work there. Even literary agencies have humans working for them. The myth circulating that asserts agents are ET beings using AI processes is greatly exaggerated. So, for the time being, since humans are still involved in the publishing process, the best way to cope with conflict (author vs. editor, author vs. publisher, author vs. author, …

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Category: Book Business, The Writing Life

Antitrust Issues and Big Tech in Publishing

By Steve Laubeon June 21, 2021
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On June 11, after a 16-month investigation into antitrust issues in the digital marketplace, the U.S. House of Representatives Committee on the Judiciary introduced five bipartisan bills to the House seeking to curtail some of the business practices used by Big Tech companies. The companies in question are primarily Amazon, Apple, Facebook, and Google. Each bill has both a Republican and Democrat …

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Category: Book Business, Publishing News, The Publishing Life

Made for Such a Time

By Dan Balowon April 1, 2021
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Today is a difficult day for Christians as we remember the final full day of Christ’s life before his crucifixion. Deep down, I wish Jesus didn’t have to go through all he did. Reading through the Gospels, it is clear the events of this week were part of a plan and purpose for Jesus living a human existence. He had a unique and stated purpose, even coming right out and saying it numerous times …

Read moreMade for Such a Time
Category: Book Business, Inspiration, Theology

HarperCollins Buying Competitor?

By Steve Laubeon March 29, 2021
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Over the weekend a rumored purchase (now confirmed, see below) has surfaced in The Wall Street Journal (link). The word is that News Corp (owner of HarperCollins and The Wall Street Journal) will be buying the consumer division (HMH Books & Media) of educational publisher Houghton Mifflin Harcourt. If this goes through, it means classic books by C.S. Lewis and J.R.R. Tolkien and George Orwell …

Read moreHarperCollins Buying Competitor?
Category: Book Business, News You Can Use
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