Overview of the Australian Book Market – Sales Channels

Recently, we have been exploring the Australian book market through excerpts of our Selling Canadian Books in Australia market guide. In our final post on this guide, expert author Michael Webster outlines this market’s potential sales channels for imported books.

Retail Sales

Retail book sales in Australia are tracked and measured by Nielsen BookScan, which collects transactional data at the point of sale in all the major book retailers, department and discount stores (DDS), online stores, and a weighted representation of independent stores. In a typical week, it collects information on over 90,000 different titles, representing more than $15 million in sales. Nielsen BookScan’s estimated retailer coverage is approximately 90% of Australian retail book trade sales, representing sales from more than 1000 retail outlets. The panel currently monitors only print book sales with an ebook sales panel in development.

Based on Nielsen BookScan data, retail turnover of print books in 2016 was $968 million (53.6 million units), a 5% decline due to the drop in adult colouring book sales, which had dominated the market in 2015. Against this, the heavy discounting seen over the past few years has been reducing from an average 18.5% to around 16% in 2016, with a further drop in the first six months of this year. The result of the decline in discounting is that the average selling price for print books in 2016 increased 4.2% to $18.07.

It should be noted that there is no retail price maintenance in Australia, although the tradition of books carrying a publisher-set recommended retail price continues. Generally speaking, price points are similar to Canada’s (with the exception of the 10% GST embedded in the price of all books sold in Australia and only displayed separately on the sales receipt).

The government previously did not impose GST on imported books unless the value of the shipment exceeded $1000, one of the highest thresholds in the world. This changed on July 1, 2018 when GST on low-value imports began being charged.

Retailers

It is estimated that there are more than 5,000 outlets in Australia that sell books. These include around 1,100 that consider bookselling a primary activity or where books make up a significant part of their product range. Of these, more than 600 are members of the Australian Booksellers Association (ABA), the main body for all booksellers.

The “traditional” bookselling market is divided into three categories: chains and online (Chains); independent (Independents); and department and discount stores, including supermarkets (DDSs).

Chains and online: This sector, which accounts for around 45% of print book sales, includes but is not limited to company-owned and franchise stores, most operating nationwide. It includes major chains such as Dymocks and Queensland Book Depot (QBD), each with 59 outlets; the not-for-profit Co-op Bookshop with 64 mainly campus stores; WHSmith with more than 50 outlets, most situated at airports and operating under a range of brands; AWPL with 10 airports and another 40 or so news/mass market outlets; Collins Booksellers with 29 mainly regional stores; and Sanity—the music/ DVD retailer—which has a limited range of Australian Broadcasting Corporation (ABC) titles in its stores.

While all bricks and mortar chains have online facilities, some in this sector are online only, including The Nile, Fishpond, and by far the largest, Booktopia.

Chains receive 45–55% discount off the recommended retail price (RRP) set by the publisher/distributor, purchase medium to large quantities of midlist to bestselling titles through head office central buying, and currently have return rates around 18–20%. Their sales are a mix of RRP and low-level discounting.

Independents: Unlike other markets, including the UK and US, the independent sector in Australia remains robust. It represents around 27% of sales, a percentage fairly constant over the last five years. While most of this sector is single-site and owner-operated, it also includes multi-site stores, generally operating in one state only. For example, the Melbourne-based Readings group has seven stores, while Queensland’s Mary Ryan and Sydney’s Gleebooks each have five stores.

Titles—from niche to bestsellers—are purchased by independents at discounts of 40–45% by individual stores or, increasingly, through Leading Edge, the national buying and marketing group used by more than 170 independents. Sales by independents are generally at full price (e.g., recommended retail price) and returns for the sector are between 10–15%.

Department, discount, and supermarket stores (DDS): This sector’s market share hovers around 30%. It includes department stores David Jones and Myer; super- markets, including Woolworths and Coles; and discount/big box retailers such as Kmart, Target, Big W, Toys “R” Us, etc. As with other sectors, DDS all have high-traffic retail sites as well as an online presence. Their stock — centrally purchased and mainly mass market — is generally heavily discounted. Returns are currently running at 20% plus for this sector.

While the bricks and mortar sector remains healthy, it is not without its concerns, which include heavy promotion by trade publishers of new/frontlist titles, which can lead to excessive buying by many booksellers, which in turn can lead to greater returns. The split between frontlist and backlist sales has been constant for the last three years and should remain the same into the near future.

The concentration of distribution is also emerging as a concern for many retailers. While many smaller/niche publishers retain their own distribution centres, consolidation into the “Big 3” distributors (UBD, Alliance, and Harper Entertainment) is a concern for some. For example, according to anecdotal evidence for this report from a sample of large independent stores, library suppliers, and franchise stores, the percentage of stock purchased from the major distributor, Random Penguin’s United Book Distributor (UBD) can be over 50%.

Libraries

It is estimated that 10–12% of book sales (print and digital) in Australia are to the library sector. Australia has more than 10,000 libraries, most linked electronically through the Australian Libraries Gateway (ALG). While digital collections have been building over the past decade, with a corresponding impact on print book acquisitions, libraries remain a significant purchaser from specialist library suppliers and from individual publishers.

Publishers wishing to contact acquisition librarians directly can obtain specialist mailing lists (adhesive labels or email addresses) from sources such as the Australian Library and Information Association (ALIA), the main association for librarians, or from Auslib Press.

The library market consists of many sectors, each with its own organization or representative group within ALIA. The overall library market consists of 500 public library “buying points,” which purchase for and distribute to 1,500 separate library branches (e.g., in Western Australia there is central buying by the State Library Board for the 232 public libraries in the state); 9000 primary and secondary school libraries; 31 240 university and other higher education (e.g., technical education); eight State Libraries and the National Library of Australia; and 1,200 specialist libraries including company, government, health, law, association, parliamentary, etc.

As in Canada, there is a statutory requirement that all publishers in Australia—commercial or otherwise—deposit, within one month of publication, copies of their new works with the National Library of Australia as well as their local State Library. In February 2016, legal deposit was extended to cover all Australian online publications, including all Australian print and digital books, journals, magazines, newsletters, reports, etc.

Want to learn more about this market?  Download the full version of our guide on Selling Canadian Books in Australia (2017).

 

02/13/2019 | Export, Market Guides