Discount Creep

January 1998
by Curt Matthews, IPG/Chicago Review Press

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Fifteen years ago, a typical independent-press retail discount schedule looked something like this:

1 copy20%2-5 copies40%6-49 copies42%50-99 copies44%100+ copies46%(FOB publisher)

The point of the sliding scale was to induce the booksellers to order more copies. Individual publishers set the discount thresholds at levels that reflected the size of their lists: the more new books, the farther apart the discount thresholds. Wholesalers were content to work with a 50% discount, less if the number of books ordered was small. The wholesalers paid the freight. Then came the mall chains-B Dalton and Waldenbooks. Since they did their buying centrally, they argued that they should qualify for the highest quantity discount, even though the books had to be shipped to each of their outlets individually and invoiced individually. Initially three or four large publishers objected to this bending of the discount rules, but the mall chains insisted and the publishers quickly gave in.
Next came the superstores. At first, they merely enjoyed the highest retail discount, but then Borders succeeded in establishing the concept of the “captive wholesaler.” This is an in-house entity, now called a DC (distribution center), which receives shipments in bulk from publishers and then reships books as needed to the various stores in the chain it supplies.
Since the existence of a DC eliminated the need for publishers to ship and bill each outlet, the chains were able to insist that orders sh…IBPA Members – Click here to view the full article (login required).

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