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A recent article published in Le Monde titled The literary re-entry makes tons of unsold uncovers the truth about a well-kept secret: the disposal of unsold books. In times of restriction, this inconsistency could become incompatible with the sobriety measures imposed on the general public.
As mentioned in the article, “The world of publishing was built on the logic of overproduction with two objectives: visibility and the reduction of the manufacturing cost per unit.” Publishers are indeed stuck between these two objectives. They walk a fine line when it comes to determining sales forecasts. It is what J.-C. Grünstein, commercial director of Gallimard, confirms by saying that it is “an impressionist work.” One of our clients, Jay Millar, co-publisher at Book*hug Press, has pretty much the same opinion, “It’s a balancing act, you always want to be picking the right number.”
The destabilizing factors
The COVID-19 pandemic made us realize we had become extremely dependent on other countries for goods, even for things as simple as masks. This is also true for paper. For reasons that would be too complex to analyze here, all global supply chains are now disorganized. We are currently dealing with delays in delivery and cascading rate increases.
If we add the national markets that are prioritized by the producers and the relative standardization of their products catalogues, we end up with an opposite result of what the economic credo has been telling us for a long time, i.e., that the law of comparative advantages dear to David Ricardo should allow us to increase our purchases while continuously lowering our costs. We are now closer to a form of commercial chaos than anything else.
David Ricardo
Liberal economist from the early 19th century, he developed some essential notions of liberal economics, such as the value in use which must be distinguished from the value in exchange, the gold standard for the creation of money and the comparative advantage which made it possible to theorize international trade.
Source : Wikipedia
- The first one is that we never fully recovered from the financial crisis of 2008. World trades never returned to their prior levels;
- The second one is that more or less consciously, we often base our opinion on the ambient buzz, which is far from reality.
The decline of globalization is not the end of the world
In March 2022, Larry Fink, the very liberal leader of the BlackRock investment fund said, “It’s the end of globalization.” This announcement made by one of those who benefited the most from globalization sounds like a warning. We can imagine the current stress level of the shareholders of all the multinationals which have made tons of money from globalization and who have been seated at the top of the economic chain now that we are facing an economic slowdown. Since then, other anxiety-inducing messages have been said, as you might have noticed.
Here is what might await us in the next few years. It is what we could call “the big come back.”
- Back to more protectionism and more inflation;
- Back to a gradual return of exchange and capital controls;
- Back to sharing the added value with employees to the detriment of capital;
- Back to more local production.
The impacts on the book market
When it comes to book production, printers have been facing several major changes since the end of 2021:
- The increase in the cost of raw materials and energy;
- A supply chain slowdown;
- Increase in wages.
A new fact is that our paper orders are sometimes subjected to quotas, based more or less on our previous consumption. This issue would be less problematic if we could make quantities of the first print runs go down. If we could print only the books that booksellers need, we would undoubtedly solve a large part of the problem.
As of now, it would be better to resolve the structural problems of publishing rather than waiting for third parties (the States or our raw materials suppliers) to set even more restrictive rules.
The publishing industry must reinvent itself
Rather than suffering from this situation, it is possible to change the publishing model in order to get a better match between supply and demand. For ten years now, Rapido has offered publishers a short-run solution that has proven to be efficient. Every year, our business grows four or five times faster than the market. So, if we need to go even further to make our offer faster, more powerful and smarter as to meet the challenges ahead, we are ready.
It is in collaboration with a few publishers and by taking into account the point of view of other players that Rapido has been able to launch an experiment of a completely new nature. For more than a year, we have been testing a new order preparation system with some of our customers, based on their inventories. This solution is called EasyRapido. It will reach a new milestone in 2023. All those who already use it have nothing but positive comments to say, especially because it saves them a lot of time and allows them to reduce their costs.
I don’t need to monitor my backlist nor my frontlist like I used to, the system is watching everything for me. I’m still in charge and make the decisions, but I don’t have to do all the manual work.
For us, this model is the future. It allows publishers to get out of the overproduction cycle by producing fewer books at a time and to do it as quickly as possible. Because of the progress that this method will allow us to make in the years to come, we will be able to gradually move closer to an organization where production will come as close as possible to demand.
Jay Millar, a man with a great sense of humour, concluded our last interview with this quip “I would be reluctant to recommend EasyRapido for only one reason . . . I don’t want everyone to know about this great secret that I’m benefiting from!”
In 2021:
Let’s modernize our methods
Kanban method
Industrial production method which consists in only manufacturing the quantities ordered.Since its creation, Rapido Books has stood out in the book printing world. While our colleagues dream of best-sellers and large print runs filling their production schedules for several months, we remain convinced that printing less and faster is the best solution to avoid unsold stock, to eliminate waste, and to reduce our ecological footprint.
With the ongoing inflation, the energy crisis and the economic slowdown looming, we are now convinced that the strategy that prevailed when Rapido was created in 2013, i.e., replacing inventories by responsiveness, will become an essential element of tomorrow’s publishing industry. It is an “antifragile” strategy, to use the expression of the economist Nassim Nicholas Taleb, which means a strategy that will only strengthen as the economic environment becomes more and more tense.
