Sourcing from Bookstores—Five Ways to Source New Books (3)

Separate Volume: The Complete Guide to Sourcing Books 2 (3)

Bookstores Can Also Act as Secondary Wholesalers

There is a third way to source new books without opening an account with a major distributor or even a small-to-medium distributor: having a bookstore act as a wholesaler for you.

For example, if you are not primarily in the business of selling books—perhaps you just want to sell a few in a corner of your shop—or if you are unsure whether you will continue to handle them but want to try selling them for now, or if you are not even thinking about making a profit from books in the first place, the hurdle for opening an account with a major or even a small-to-medium distributor might be quite high if you are honest about your intentions. Conversely, you might feel that opening a trading account with a wholesale company is a high hurdle for you as well. In such cases, you can try asking a bookstore.

As mentioned earlier, under the resale price maintenance system, new books are supposed to be sold at a fixed price, but in transactions with corporations, known as "external sales" (gaisho), discounted sales have long been practiced. Even in resale price maintenance contracts, the term "bulk purchase" is stipulated as an exception. Interpretations vary, but in any case, discounting in external sales has been tacitly accepted throughout the publishing industry.

For this reason, some bookstores act as secondary wholesalers to other retailers, treating them the same as external sales. If a bookstore sources books from a major distributor at a 20% discount (80% of the list price), they can make a small profit by wholesaling them to another small retailer at a rate of 85% to 90% of the list price.

How to Request a Bookstore

So, how should you choose a bookstore that might be willing to wholesale to you in this way?

The bookstore being asked will have its own perspective. It is an irregular task, and the gross profit margin is low. If the bookstore is conservative regarding the resale price maintenance system, they may express concerns about selling at a discount. Also, if it is a nearby bookstore, they might consider you a potential business competitor. On the other hand, if the terms are, for example, a 90% purchase rate with no returns, there is no risk for the bookstore, and they get half of their usual profit. Whether they will be happy or not depends on their individual way of thinking, and you won't know until you consult with them.

Therefore, if you have an acquaintance who runs a bookstore or are on friendly terms with a local bookstore, it is best to start there. It is common to hear bookstores say, "We don't do this with just anyone, but we do it for you because we know you."

Also, if you inquire with a major distributor about wanting to sell books on such a small scale, there are cases where the distributor will introduce you to one of their client bookstores that is actively engaged in external sales. Even if your scale is not large enough for the distributor to want to open a direct account with you, if it leads to sales for one of their client bookstores, it can be considered a positive decision for the distributor as well.

However, as written earlier, since you are having a bookstore wholesale books that they themselves source at around an 80% rate, the purchase rate for you will be high. If you are asking a bookstore with which you do not have a strong relationship, explaining what you want to do and telling them that you are fine with a 90% purchase rate with no returns might increase the probability of them accepting. Also, if you choose from the stock already on the shelves without placing special orders, it will not be much trouble for the bookstore.

If your goal is not profit but rather to create a situation where you can easily sell books, this is a recommended method.

Reprinted from "A Reader for Future Bookstores," pp. 140-142