Kiser & Associates

How Much? That All Depends
When it comes to finding a consistent price for Spanish-language books, the U.S. market can be unpredictable at best
Críticas, Winter 2001

Librarians know the problem well. One distributor may carry Harry Potter y la piedra filosofal for $13.95, while another sells it for $18.95. Prices often change from the time a library orders a book to the time the book arrives. Unexpected price differences pop up – Spanish-language translations of bestsellers can be much more expensive than the English-language originals.

Booksellers face similar problems. They can order and receive five copies of a new title from a distributor in July, but two months when they order 10 more copies – they can get a different price. Distributors are not immune to the pricing dilemma either. They respond to a market that forces their prices to shift often. They try to cope by peppering their catalogs with phrases like “all prices are subject to change without notice.”

Why are there significant differences in price among U.S. vendors for the same Spanish-language book? Why isn’t there a U.S. list price? How can you tell which distributors offer fair pricing?

Publisher’s Elusive List Price

Establishing a list price is a fairly straightforward process for most U.S. publishers. They factor in the costs of manufacturing and printing a book; they consider the book’s subject matter, competition, type of binding and page count; and they take into account other costs such as overhead, author royalties and trade discounts. With this information they establish what is known a the “list price” or “publisher’s list.” Publishers include the price in all catalogs and marketing pieces and most often print the price right on the book jacket.

Technically, the number is just a suggested retail price; retailers are free to sell the book for any price they wish. Because the discounts they receive vary according to volume, larger mainstream vendors like Amazon.com, Borders and Barnes & Noble can afford to sell books for less than the publisher’s list price. Amazon.com offers 30% off the publisher’s price for many of its hardcover books. Barnes and Noble sells its top 100 books for 40% off the cover price. Even smaller independents discount new releases or bestsellers.

The beauty of the list price is that it serves as a solid point of reference. Discounts to wholesalers, retailers, book clubs, librarians and educators are based on it. Although librarians may receive a 10% discount from one jobber and 20% from another, they know that these discounts are based on the same publisher’s list. With English-language books in the U.S. trade, you will rarely find a retailer that sells a book for more than the list price. And the list price is clear.

Go to another country, however, and all that changes. Have you ever bought English-language books while traveling in another country, say, France, Mexico or Japan? Chances are you paid more than the publisher’s list price, and it makes sense that you would. The local retailers pay the added shipping and customs charges to import the books, and these costs are passed on to you. The same procedure happens with Spanish-language books imported into the United States.

In Latin America and Spain, publishers go through a similar process to determine the price of a book. They factor in the manufacturing and printing costs, author royalties and discounts they offer to local distributors and retailers. They consider the book’s subject matter, page count and competition. But that’s where the similarities end. Publishers print books with their local markets in mind, not the United States. Normally, prices are not printed on the book jackets or mentioned in catalogs. Instead, these publishers prefer to create separate price lists that can be inserted into the catalogs or sent separately to potential vendors in other countries. Retailers either sticker the books themselves or mark the price on the inside of the book in pencil. Why?

Changing Currency Rates

Currency fluctuations are one of the primary reasons prices vary for Spanish-language books in the United States. The value of local currencies is constantly changing. The Mexican peso might be worth $0.103 against the U.S. dollar one month and $0.108 the next. When the value of the Mexican peso or Spanish peseta changes significantly, so must the prices of consumer goods. Although this sounds simple enough, many U.S. librarians and retailers continue to be baffled by the price differences in Spanish-language books.

In the United States, we take price stability for granted, particularly when it comes to books and other goods. David James Duncan’s latest book, My Story As Told By Water, for example, will be $24.95 today, tomorrow, next week and next month. Larger stores can certainly offer discounts, but it’s highly unlikely that the list price will suddenly change to $29.95. However, the price fluctuation of books from other countries, particularly in Mexico and the rest of Latin America, is analogous to that of the price of gas in the United States.

As an example, Los mejores antojitos mexicanos (The Best Mexican Appetizers) might have a list price in Mexico of 65 pesos. If the exchange rate is 10 Mexican pesos to the dollar this week, the publisher in Mexico will sell the book to U.S. vendors for $6.50. If the exchange rate changes to 8.9 pesos to the dollar, the book costs $7.30. Although exchange rate fluctuations represent a large piece of the price puzzle for Spanish-language books, a number of other factors also contribute to price variations, including shipping methods, distributor margins and volume discounts.

Shipping Methods

Distributors can use a wide variety of shipping methods to import books from Spain, Argentina or Mexico. Each method will directly influence the final price paid by consumers. Some distributors consolidate orders from publishers in Spain before having them shipped. In this case, they order books from a number of publishers, who then ship the books to a local consolidating company in Spain. The consolidating company repackages the books and ships them together to the U.S. distributor. This method is usually a cheaper alternative to paying FEDEX charges for smaller packages from a dozen or more publishers, although it can take a lot longer to get the books.

Other distributors prefer not to consolidate orders. Instead, they receive shipments directly from each international publisher. This method is common for distributors that work with fewer publishers and carry a larger number of titles from each. Distributors can receive books by air, by sea and by overnight carriers such as UPS and FEDEX – each method affecting the final price paid by retailers and librarians.

Distributor Margins

Once the books arrive in the United States, distributors assign a price in dollars after factoring in the shipping costs and their profit margins. Just as the exchange rates and international shipping costs can vary, so too can distributors’ profit margins. Distributors stocking 2000 titles will likely have different margins than those stocking 5000 or 10,000 titles. Distributors that carry only Spanish-language books will have varying margins than those that also sell music, videos, magazines and English-language books.

Given the number of variables involved in determining a company’s profit margin, it’s no surprise that there is no standard multiplying factor for Spanish-language books. What’s a multiplying factor? It’s a formula resellers use to determine pricing. Say, for example, a distributor is interested in importing 100 copies of a book that costs $6.00 in Mexico. The publisher gives a 40% discount, which means the distributor’s net (or discounted) cost is $3.60 each. If the distributor then resells the book for $9.00 in the United States, a multiplying factor of 2.5 has been applied: multiplying the cost ($3.60) by 2.5 to arrive at the U.S. price of $9.00.

The multiplying factor each distributor uses to price imported books varies. Some multiply by 2. Others multiply by 2.5 or 3 depending on each business.

Volume Discounts

Publishers of English-language books in the United States offer wholesalers discounts ranging from 45-55% depending on volume. While discounts will vary from publisher to publisher, the industry standard for distributors and wholesalers hovers around 50%. Not so with books in Spanish.

In Mexico, in particular, the discounts you receive are often a function of your negotiation skills. Although the “standard” international discount given to U.S. vendors seems to be 40%, the reality is that discounts can vary widely. Recently a distributor asked me to help him set up an account with a publisher in Mexico. He had attempted to place an order for more than 70 books and was told by the publisher that the discount would be 30%. After several emails, faxes and phone calls, we were able to secure a better discount of 40%.

Several months later, the distributor wished to place another order for a similar quantity the same books. The price had been raised from $19.46 per book to $24.00 (a difference of 23%!). Although we also received a 40% discount for the second order, effectively it equaled only a 26% discount off the previous price. Currency fluctuations alone do not explain this increase. In this case, varying personnel might have been part of the problem – the person that authorized the first order was no longer with the company when we placed the second one.

Although Mexico shows up in this example, nebulous discount structures for international orders exist in Argentina, Spain and elsewhere as well. It is difficult to know if the price you are charged is the same price charged to others. The same can be said of discount and payment terms. Some international publishers have more than one price list: one in the local currency and one in dollars for foreign markets. It is often unclear whether the price list in dollars is inflated or a strict conversion to dollars.

Working with Distributors

This is one of the reasons it doesn’t make sense for most U.S. librarians and retailers to buy directly from international publishers. The hassles and time involved in contacting the publisher, negotiating a discount and dealing with customs far outweigh any price savings. Buying directly from publishers abroad requires that you first track down the publisher, find personnel to adequately communicate with them in Spanish, place expensive international phone calls and send international faxes, pay for the books in advance and deal with the hassles of bank transfers. Most international publishers won’t accept a check in U.S. dollars since the fees to cash it often are greater than the value of the check itself. Then there’s international shipping and customs to deal with. When you compare the time and expense of this process with the $5.00 you might save on an individual title by ordering it directly, the savings are minimal. An exception to this would be if your library system is large and consistently orders multiple copies of each title.

Why take on this headache by ordering directly from Mexico or Spain when that’s what distributors are for? There are dozens of U.S. distributors that specialize in Spanish-language books and would gladly take on the hassles of ordering books from international publishers. But how do you know which distributors offer competitive prices?

The answer is simple: Most U.S. distributors offer competitive prices. In order to get the best prices, however, you must work with more than one or two. The more distributors you work with, the greater the likelihood of getting the titles you want, getting them within a reasonable amount of time and paying fair prices.

To prove this theory I compared prices for a dozen Spanish-language books among 38 distributors. If you consider only one title, say, Los Trotamundos (The Globe-Trotters) by Spain’s Edelsa Didascalia, you will find a variety of prices:

	Student book	Workbook
Continental Book Company	$29.95	$13.95
Ideal Foreign Books	$19.95	$8.95
ABC’s Book Supply	$13.95	$6.95

Prices vary for imported educational material and other specialized subjects such as textbooks and technical books since only a handful of distributors carry them. In this case, Los Trotamundos is a Spanish as a second language textbook designed for elementary school students. Since only a few distributors stock it, the variations in price tend to be larger.

Choose a book from trade publishers such as Fondo de Cultura Económica or Alfaguara, and you will find only small price variations:

Distributor	La fiesta del chivo by Mario Vargas Llosa (Alfaguara)
Pan American Books	$19.95
New Latin American Book Trade	$22.90
Baker & Taylor	$22.95
The Bilingual Publications Company	$22.95
Lectorum Publications, Inc.	$22.95
SBD Spanish Book Distributor	$22.95
Schoenhof’s Foreign Books	$22.95
Latin American Book Store	$24.50

Why? Both Fondo de Cultura Económica and Alfaguara have sales offices in the United States. As such, they import the books themselves, warehouse them and assign a U.S. list price, operating in a similar fashion to U.S. publishers of English-language books. Because the books are already in the United States, it doesn’t make sense for distributors to create more work and go around the publishers and purchase the books directly from Spain or Mexico. The U.S. sales offices for such Mexican and Spanish publishers determine the list price for their titles, and most distributors respect that price.

The majority of publishers of Spanish-language books, however, do not have sales offices in the United States, and their books are offered with greater variation in price:

Distributor	El alquimista by Paulo Coelho (Grijalbo, Mexico)
Astran	$17.95
Baker & Taylor	$16.95
Libros Sin Fronteras	$16.95
Pan American Books	$12.50
Schoenhof’s Foreign Books	$24.95

Even though individual titles can vary significantly in price from one distributor to another, if you compare entire orders of multiple titles, the differences get smaller. Add in domestic shipping charges and the price disparities among distributors are often minimal. It is not uncommon for distributors with slightly higher prices to have inexpensive shipping and handling charges. In contrast, distributors that seem to offer lower prices often make up the difference with higher S&H fees. The bottom line is that working with a number of distributors will ensure that you get the most bang for your acquisitions buck.

Looking Beyond Price

Librarians and retailers alike should not get bogged down by pricing. Nor should you choose a distributor based on prices alone. When I compared distributor prices in the above examples, the most startling finding was not the range of prices, but the wide range in selection and service. Of the 38 distributors I contacted, a surprising 44% did not return my messages. Some required that I provide title, author, publisher and ISBN information in order to quote me a price. One wouldn’t quote any prices unless I provided him with the name of my library – a practice that is both unusual and unnecessary. Seven distributors didn’t stock any of the requested titles. In fact, no two distributors carried all of the books I requested.

Rather than select a distributor based on price alone, choose your distributors based on the three “S”: Selection, Service and Speed.

Selection

Most distributors do not carry all the titles you’ll need. Spain and Mexico combined publish more than 50,000 new titles each year, which is equal to the entire annual output of English-language books in the United States. Add in the production of Argentina, Colombia, Venezuela the United States – which is expanding its Spanish-language publishing – and other Latin American countries and that number jumps to more than 80,000 new titles per year. With the average U.S. distributor stocking fewer than 10,000 titles in Spanish, the logic in working with multiple distributors becomes clearer.

Librarians and retailers would do well by getting to know distributors and their specializations. Are their strengths in Latin American fiction, audiobooks or children’s titles? How does their title selection meet your needs? How many Spanish-language titles do they stock? Do they welcome special orders?

Service

The level of customer service is one way to distinguish reputable distributors from less-than-professional ones. When selecting your distributors, consider some of the following questions:
• Do your distributors notify you when an item is out of print or on backorder?
• Do they have a catalog?
• Is it annotated?
• How often is it updated?
• Do they have a web site?
• Is their entire catalog listed on the site?
• Can you place orders online?
• Do your distributors offer processing, cataloging or rebinding services?
• Do they have approval plans?
• What type of discounts and payment terms do they offer?

Speed

Speed is the third factor librarians and retailers should consider when selecting a distributor. What is the turnaround time for in-stock and special orders? How long does it take your distributors to respond to phone calls, faxes or emails? Do they offer more than one shipping method?

Once you have selected a number of distributors that meet your needs, create a comprehensive list of the Spanish-language titles you want to purchase. Send the list to each distributor and request information regarding title availability, price and discounts. In a matter of days you’ll know who has what and at what price. You’ll also have a better sense of the type of customer service and fill rate you can expect. Place your orders accordingly.

Although this international book market can certainly seem be unpredictable with its multiple distributors, varying levels of service, uncertain title availability, changing prices and nebulous discount structures, it’s still a relatively new market with plenty of challenges and endless opportunity. Choosing your distributors wisely and knowing what can reasonably be expected of them are the first steps toward simplifying the ordering process and getting a fair price.