Page last updated at 23:06 GMT, Tuesday, 22 July 2008 00:06 UK

Clubbing together to beat the big boys

By Anthony Reuben
Business reporter, BBC News

Gary McLaren has been working at the Owl Bookshop in Kentish Town in North London for longer than he is prepared to say, although he admits to having been there more than 15 years.

The Owl Bookshop in Kentish Town
Owl Bookshop faces competition from a Waterstone's less than a mile away

"It is difficult keeping going and the High Street changes through time," he says.

"You just have to make sure you're serving what people want rather than trying to force something onto people."

Independent bookstores face a constant problem that they are not able to negotiate with publishers to secure the same discounts on books as their bigger competitors such as Waterstone's, Amazon or the supermarkets.

"If you look on the High Street there are a lot of half price offers," says Tim Walker of Walker's Books, which owns seven bookshops in the East Midlands.

"Most independents can't even buy their stock at half price."

"Chain stores and supermarkets can sell books to their consumers at a lower price than we can buy them at and that makes it really tough," he says.

Club together

There is nothing evil about this: in any industry someone buying thousands of products will be able to get a better deal than someone buying a few dozen.

But now, two schemes have found different ways for independent bookshops to club together to buy their books on better terms.

Owl Bookshop is a member of Leading Edge Books, which is a sort of book club for bookshops.

Getting independents to do anything together has always been compared to herding cats
Tim Walker, Walker's Books

It launched in the UK last year and now has about 55 members in the UK.

They pay a monthly fee, which is currently 40 but is likely to rise soon, and in return they are offered a selection of books at greater discounts than they can negotiate through wholesalers or directly with publishers.

"It's just a few extra percentage points but it makes all the difference because it's allowing us to buy things for less money, that we can still sell at the same retail price," Gary McLaren says.

Members get other benefits such as offers of reduced insurance or phone bills as well as marketing materials such as personalised promotional leaflets.

It is a model that began in Australia, where two thirds of independent booksellers are members.

Publishers in the UK have generally been supportive of the model, according to Paul Henderson, general manager of Leading Edge Books in the UK.

"They want, by and large, to have a dynamic and thriving independent sector and it's a hard group to reach," he says.

The benefit to publishers is that instead of having to deal with 50 separate orders from individual shops, they can just deal with one organisation.

Minimum orders

The Independent Booksellers' Group (IBG) offers a different way for retailers to club together.

It has about 125 members, and twice a year they get together and choose a selection of new books that they want.

Paul Henderson
It is quite a scary High Street
Paul Henderson, Leading Edge Books

Members do not pay a subscription fee, but the big difference is that they have to take at least 10 copies of each of the books chosen, half of which may be returned if they are not sold.

They also commit to display the books prominently in their stores.

It means that IBG can approach publishers and ask for a discount, confident of a minimum number of books they will want to order.

Members are also offered a selection of discounted older titles, for which there is no compulsory order.

IBG was launched in 2006, led by Tim Walker with the wholesaler Bertrams/THE.

"Getting independents to do anything together has always been compared to herding cats because we're all fiercely independent but I think there's a realisation that actually we need to work together," Mr Walker says.

"It allows us to compete - doesn't allow us to beat the competition on price but at least it allows us to compete," he says.

Tough times

There is an optimistic note for small shops from Paul Henderson, who used to work for Ottakar's until it was bought by Waterstone's.

Ottakar's prided itself on allowing its branches to be relatively independent and having stores in places that other chains would not consider.

"Now that there is no chain opening up in small towns there is a real opportunity for independents to carve a very strong niche in those small towns and suburbs of major cities where the chains won't go," he says.

Gary McLaren is also confident that the store he manages has found its niche.

"We've been able to set our stock range through years and years of trying things out, so we've reached a stage now where we reflect all the local people who buy books and that's probably why we're still here," he says.

But there is no question that there are challenges ahead for those independents that have survived so far.

Consumers are tightening their belts and many competitors are trying to take custom away from the independents.

"Trade is very difficult at the moment," says Tim Walker.

"This year the internet and the supermarkets will probably account for about a third of the book trade where five years ago their share would have been tiny."

In the future he cites the threat of digitisation onto handheld book readers and Google maps threatening travel guides.

"It is quite a scary High Street," Paul Henderson confirms.

"But there is a mood within a lot of consumers to support a differentiated offer and the independents have a very personal, market-specific offer that none of the chains can replicate."


SEE ALSO
Love your local bookshop?
05 Jul 08 |  Magazine
Book company sale saves 160 jobs
29 Mar 07 |  Glasgow, Lanarkshire and West
Ottakar's deal gets green light
30 Mar 06 |  Business
New hi-tech world of bookshops
24 Oct 05 |  Northern Ireland
Bennett urges book chain boycott
13 Oct 05 |  Entertainment
Readers can book some profits
03 Nov 03 |  Business

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