Borders, Book Competition and Your Pricing Policy

Borders Australia announces it a new pricing policy in direct competition to Amazon at http://mhpbooks.com/mobylives/?p=15017.  

For authors and publishers, this only means a reduced net profit. It means a reduced net profit for Borders as well. For a few customers it sounds like good competition,  but most will never follow up on a refund (or merely buy from Amazon). Those who understand this retail ploy will see it as manipulative, rather than a straight-forward "better price for all" policy.

A lesson here for retailers in general is that those TV beat-the-price ads for mattresses and other items--including this Borders policy--appeal to the few. They may feel like an assurance that the retail outlet will do its best to price low, but most know a gimmick when they see it. Most know that the expensive ads must be paid for, that the retailer must make a profit just as their competitors must.

Further, a gimmick like this sends some prospective customers to the competitor to check for prices. He or she may well stay there and buy if the price is the same. If the price is the same too often, the entire process will start to look like a game if not collusion. If the price is only a few pennies less (as it probably will be with something as low-priced as a book), it will look like trickery.

The most important reason that this is a poor policy is that, surprise! Customers want service. They want fast shipping. They want ease of checkout. Yes, they want low prices, too. But to focus on price like this seems a very, very bad move. And a dangerous one. Bookstores (like the rest of us) can ill afford a downward spiral in in our profit margins even considering high volume.



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Carolyn Howard-Johnson's FRUGAL book for retailers is A Retailer’s Guide to Frugal In-Store Promotions: How To Increase Profits and Spit in the Eyes of Economic Downturns with Thrifty Events and Sales Techniques launched at the National Stationery Show at Javits Center. Because she is the author of the multi award-winning how-to books for writers,The Frugal Book Promoter: How To Do What Your Publisher Won't and The Frugal Editor: Put Your Best Book Forward to Avoid Humiliation and Ensure Success, retailers will also find essentials of writing for blogs, Web sites, and newsletters on this blog. She is the author of an award-winning novel, This Is the Place; and other fiction and poetry. She blogs on better writing at The Frugal, Smart and Tuned-In Editor blog. Find her tweeting for retailers at @frugalretailing . If your followers at Twitter would benefit from this blog post, please use this little green widget to let them know about it: