HERI Committee Report

APPENDIX K

PUBLISHER AND WHOLESALER DISCOUNTS

Books can be ordered directly from publishers or from one or more wholesalers. When booksellers, libraries or schools order books, they typically receive discounts based on the number of books ordered. This Appendix illustrates the potential difference between ordering books from three separate publishers, or buying the same books from a wholesaler.

Many publishers use a sliding-scale when selling books. Thus, the greater the number of books ordered, the higher the discount. Because an industry standard for discounts, however, does not exist, discounting practices tend to differ from one publisher to the next. For example, one publisher might offer a 20% discount on orders of less than 10 books, and 40% on orders of 10 copies or more, whereas another might offer a 40% discount on orders of less than 50 books, and 50% on orders greater than 50 copies.¹

Table K-1 shows the total discount received in a scenario where three orders for 70 books are placed with three different Canadian publishers (with each book worth $10 retail). Due to differing discounting scales (and allowing for freight expenses), the discount received for this order of 210 books would be about 32.1%.

Table K-2 illustrates the total discount received if a book buyer purchased these same 210 books from a wholesaler who offered a flat rate discount of 42%.² In this instance the order is large enough to qualify for free shipping. Furthermore, the net discount is 42% overall versus the 32% that would have been received if the books had been ordered directly from each publisher.

¹ See the Canadian Booksellers Association's CBA Source Book, 1999 for examples of publisher, distributor and wholesaler discounts.

² The data for this example were included in an 8 May 2000 information package provided to Committee's research team by Pegasus Wholesale.