Comments on: Borders financial problems slow payments to publishers

By: BB

BB — Fri, 14 Jan 2011 18:48:35 +0000

Most business products and services are paid within 30 days unless there are special arrangements. Same as your personal bills. Sometimes there is a discount to pay up front or in 10 days. Often there are specials certain times of year for stores to stock up in anticipation of seasonal business and they may not have to pay for 60 or 90 days.
Calendars may ship in the summer and be paid in Dec. Stores can’t pay before they recieve the merchandise to sell to pay back.

The big issue historically in the book business is that books can be returned after a certain amount of time for credit. Often the returns which are only supposed to be in saleable condition are not in good condition. Publisher then sells them off as remainders at a low cost. Publishers can lose alot of money if lots of books are returned. The argument is that they need them available in anticipation of large sales on some new books. Then if sales don’t materialize they are stuck with them. In the gift store and gift book market they get a better discount–50% but cannot return. Bookstores usually get just a 40-45% discount off of retail, which is part of the reason they need sidelines. Sidelines often bring in the profit. Just as drinks create profit in a restaurant, not the food. Publishers also offer advances to authors that may or may not be made back. Even the smaller advances would not break even until several thousand books are sold.

By: Katherine

Katherine — Fri, 07 Jan 2011 22:42:03 +0000

What? I get that online is great and easy to use, but really? Borders is more than just a place to get books, it’s a place where families can spend time together and bond over books, music, movies, or even games! Its a place for teenagers to get together and hang out with it each other without finding trouble(at least not too much!). It provides a space for people to relax and enjoy themselves, without the worry of going online to pay bills or deal with this or that! Borders is one of the only places left that doesn’t go overboard with technology.
I’m not even old enough to drink yet, for those of you who think this post is from old times or old age. My family loves to read or watch movies together. It’s something that we bond over and yes some of us do have ereaders or iPads, bit we still like the experience of going to a store and picking up a book just because the cover looks interesting!
I for one will be so sad to see Borders go and to know that in 20 years my kids will be doing everything electronically only because it’s more convenient. What will we lose next, just for the price of connivence? Nice hope for the future. Hope you survive Borders!

By: Tantalus

Tantalus — Fri, 31 Dec 2010 14:12:33 +0000

The usual arrangement for established bookstores is to pay after receiving books or other merchandise. Some small publishers require payment in advance, and new bookstores with insufficient capital or owners who don’t have a good credit rating will likely have to pay in advance for at least the initial shipments. Publishers will stop shipments to stores that are behind in their bills. William Ackman, whose hedge fund Pershing Square Capital Management is the biggest stockholder in Borders–something like 40% of the stock–has the big bucks to put into Borders, but maybe he has reached the limit of how much he is willing to lose. So, it doesn’t look good for Borders. Borders’ killer competition is Amazon. The costs of running physical stores is far higher than a web store.