Kinokuniya to buy more books directly

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Kinokuniya Co. President Masashi Takai.
The Yomiuri Shimbun

Kinokuniya Co. plans to increase direct purchases of books from publishers - as opposed to buying them through wholesale booksellers, the conventional practice - as the major bookstore chain has received positive responses to its direct purchase of a new title by popular writer Haruki Murakami, the company president, Masashi Takai, said during a recent interview with The Yomiuri Shimbun.

Kinokuniya purchased 90,000 copies of Murakami's "Shokugyo toshite no Shosetsuka" (Novel writing as a profession), of 100,000 copies printed, directly from Switch Publishing Co. when the book was released on Sept. 10.

Kinokuniya's action is aimed at striking back competitively against online retailers, which have increased their presence in the publishing market.

"We'll rely more on the direct purchase system so that local bookstores will be revitalised," Takai said.

Under conventional deals via wholesale booksellers, retailers are allowed to return unsold books to publishers.

By buying copies directly from Switch Publishing, Kinokuniya has to keep them in stock if they are not sold, but the firm has been able to reduce the number of copies that would have been supplied to rival online retailers, thus boosting its market presence.

Kinokuniya can also secure higher profit margins because no intermediary party was involved in the deal.

There are also some benefits for the publisher in Kinokuniya's direct purchase approach, as no unsold copies will be returned from the retailer.

As a result, Kinokuniya has received offers of similar deals from other publishers, Takai said.

While the value of book sales at conventional bookstores have been on the decline, the total sales of online retailers increased to ¥160 billion (S$1.9 billion) in fiscal 2013, up about 70 per cent from fiscal 2007.

Following are excerpts from the interview with Takai:

The Yomiuri Shimbun: What is your purpose for the direct purchases [of Murakami's new title]?

Masashi Takai: I aim to revitalise local bookstores before online retailers become dominant. At "real" bookstores [in contrast to online ones], people can encounter various books and store clerks that could increase the number of people who love reading. Of course, we cannot return unsold copies [under this method] - we cannot start anything new unless we take risks. Our approach has received some good responses [from other bookstores].

Q: What kind of problems do you find with conventional book distribution practices?

A: The commissioned sales system [in which retailers can return unsold copies] has fallen into a systematic pattern. It has become seriously wasteful, because the ratio of returned copies has reached 40 per cent. There should be multiple options for distribution routes. Our latest deal could stimulate [the industry] as a whole.

Q: Will Kinokuniya continue similar deals?

A: We've received similar offers from other publishers. We'll go on with similar direct purchases if we think we can make a profit. In addition, at a joint venture firm that we established with Dai Nippon Printing Co. [which has Maruzen and Junkudo bookstore chains under its umbrella], we'll try out a pilot project in which more than one chain will jointly purchase books directly from publishers.

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