http://practicallife.wordpress.com/2008/07/24/books-prices-and-marketing-strategies-in-singapore-bookstores/
I have been observing prices on two largest chain of bookstores in Singapore - Borders and Kinokuniya. Read more to find out what I have found.
Borders
Borders in singapore once achieved the most profitable store by area size in the world. It generated more revenue dollars per square meter or square feet than any other stores. I personally like Borders as they have a large store and allows most of the books to be browsed.
While some people do try to exploit the goodwill e.g. stacking many books and read them at one corners for hours or whole day long, it provides many genuine customers an opportunity to read and evaluate if they want to buy the book. Sadly, recently, they started to wrap some of the books but this is still quite minimal compared overall numbers of books.
It also concentrates on English books and no Chinese or Japanese books are on sight.
For many years, Borders did not have any discount or membership cards. Last year, they launched Borders Preferred card. The card holder is entitled to have 10% further discount from book price or after any ongoing store discount. This is pretty unique.
It entices customers to come to their stores. Almost every month, an email would be sent with a e-coupon for a big discount on purchase of one book. Yesterday, I just bought 1 book with 25% discount voucher and additional 10% with the card. I also bought two more books at a normal discount (see how it works to attract customers with big discount of one item and customer tends to purchase more?)
Kinokuniya
It has the largest bookstore in Singapore by area and located in Ngee Ann City (Takashimaya). Many o fthe books are wrapped so one can’t really browse the content to evaluate. Larger and more complete collections are offered here ranging from non-English books to less popular interest.
Kinokuniya has a long-running membership program that entitles the members to have 10% discount of normal book prices or 20% during certain promotion period (over the weekend usually). The books they have is more complete while borders usually stock 1-3 copies and stop selling if it has slow turnaround time.
Facts
Book prices in Singapore from those two bookstores are excessively expensive. A book that sells for US$ 29.90 (~ S$ 42) would be listed at S$ 60.00. This mean most of the books are have 50% over their RRP in the US. Compare this with Amazon price, you’ll know that even the RRP is already high. Amazon never sells at RRP, simply because RRP (Recommended Retail Price) already have a significant margin included for bookstores to make money.
Typically, a book can provide at least up to 30% margin for the retailers. So in this case, the bookstores grossly increased the price by 80% to Singapore local price. It can even be higher margin if the publisher provide a special or higher discount for the retailers for buying in bulk.
Now, provided that the bookstores provide 10% discount, they store still earn at least 70% in gross profit margin. I would believe they earned a hefty amount of money even after substracting all operating expenses. No wonder Borders in Singapore can achieve the most profitable store in this small-population country.
So the next time you buy books even with 35% discount, think that you may be still contributing 50% of your book to the bookstore. It is a good deal but not a great deal.
One may argue that buying from Amazon is cheaper but become more expensive when added with shipping cost. True, but I still feel that companies should maintain a reasonable profit margin and no higher than that. Obviously reasonable could be different from consumer and seller point of view.
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