Wednesday, January 5, 2011

Books Are Not Commodities! They're ... Pastrami On Rye!

I just spent $52.03 on two sandwiches (a plain pastrami on rye and a "small" chicken salad with bacon), two very small lumps of cheese and a tiny bottle of spice. And no I am not in New York or any other big city where prices are over the moon. I'm in Michigan, a depressed state ranked eleventh from the bottom in terms of cost of living. Even so, I felt I got off cheaply considering we'd made a day trip to Zingerman's.

And whenever there's a debate about book prices - which there are a lot of out there these days as ebooks take off - someone always makes the point about "basic economics" and how the price of any commodity will go down until it is just barely above the price of production, and how writers will have to compete by lowering their prices as close to zero as possible. "It's just basic economics!"

Except it isn't basic economics. It's just he economics of certain elements of open market trading - in particular, commodities. You know, things like gold, silver, oil, corn, wheat and oats. The law of supply and demand rule the price of these things. And if the Saudis decide to flood the market with more oil, the prices go down for everyone. If they decide to hold back, the price goes up.

But the reason it works this way is because oil is oil is oil. When you go to a gas station, you look at the price, and maybe you know that some stations have a tendency to cheat a little, but you don't sniff at the pump and decide whether you want this gallon or that gallon. As long as the legal standards are met and nobody's cheating, gas is gas. So price makes the biggest difference in a customer's buying habits.

Salt is another commodity - one of the oldest. And yes, rock salt, like gold or timber, is sold at auction which sets the market price for everything down the line. Except...

Here is a portion of the salt shelves at Zingerman's. Those bags and cans of salt along the bottom are priced anywhere from 6.49 to 16.99. And I don't know if you can see it, but those little bottles in the upper right corner go for $24 something. These are not commodities.

Bread -- another early "commodity" -- may cost anywhere from a buck to four or five bucks a loaf in your local grocery store. Maybe a little more at your local bakery. Maybe a lot more if you're lucky enough to have a good bakery.

And then there's Zingerman's where you pay something like $8 in the store, but people fall all over themselves to pay $15 plus shipping to ship it all over the world. After all it's not just any bread. It's Zingerman's bread.

Zingerman's is the kind of place where.... Well, once my friends and I tried to arrange for a helicopter to go down to Ann Arbor and pick up a simple pastrami on rye. (We couldn't afford to hire a helicoper, you understand. I could barely afford the sandwich at the time -- but we knew someone who knew someone. The deal fell through because we had no one to deliver the sandwiches to the airport. Unfortunately some of the people involved had never tasted a Zingerman's pastrami on rye, and didn't understand.)

You've got to understand too, that I am not a wealthy gourmet. I am a part-time education worker. I make less than the median income, and only recently managed that. I manage my money well, and I don't own a car which helps a lot. I eat a lot of ramen noodles, which I buy by the case. I do not spend money on snob-appeal foods - no wine, nothing just because it's the latest thing. Most of my foodie shopping is carried out at Oriental Mart, where prices are very low, but the ingredients are exactly what I need. I buy my jasmine rice in bulk for less than I'd pay at the grocery store. Same with my peppercorns.

And I don't eat any pastrami sandwiches which are available in town. You can't price low enough to get my interest.

Books are like pastrami sandwiches. They're not like gas. I don't say this because they are better than gas. I say it because books are not alike. One does not equal another. The price of a book is not about marketing - it's about economics (more on that below) and most of all desirability. Desire varies not only from product to product, but also from customer to customer.

Many unknown indie writers say "but nobody desires my book yet, so I have to compete for customers until they know about it. I have to give samples."

It's true. Zingerman's does give samples. They give them out generously. (It's one of the things they are famous for: the happy, helpful and enthused employees who will give you a taste of nearly anything in the store.) But their prices are what they are. We tasted a lovely sample of fig vinegar that was maybe $35 a small bottle. It was great, but too expensive for us. But they will not have trouble finding customers for it. However, they give samples to everyone because they love that vinegar. They're happy, we're happy, we buy other stuff.

The other thing about Zingerman's is that they're just a deli. They were a sandwich shop with some canned goods and a counter. They weren't satisfied with the bread they were buying, so they started their own bakery. And they wanted better cheese, so they started seeking out better cheeses... and found so many wonderful ones that they wanted to share. And sausages. And spices. And olive oils. They grew out of their own wonderfulness and enthusiasm. They love what they do so much, they refuse to dilute it by franchising. (However they are perfectly willing to train others in how to do what they do.) And they grow and they grow and they grow anyway.

So if Zingerman's doesn't fit the commodities business model, what are they? Zingermans is an Artisan Business. With artisan products, the value is in the touches the craftsman adds to the product.

Books and all other intellectual property products are artisanal products.

Not all artisanal goods are expensive. Many are very cheap. Homemade donuts or pies from a mom and pop store in a small town may be very cheap. But that's not what brings in their customers. Price is a side issue - a negotiation between what the vendor needs and what the customer can pay. With artisan goods, price is economics, not marketing.

So how do you compete in an artisanal model?

The same way Zingermans did! By being wonderful. And sticking at it, one sandwich at a time. Sure give samples - and be personal about it. You're not a machine. Don't leave your customers with a nameless unhappy jerk behind the counter who doesn't care. You are your store. Love your product. Love your competition's products when they are really good. Love your customers. Make dealing with you a wonderful, surprising and interesting experience. Make the customer smile. (Or with fiction, make them cry, laugh, shake with fear, sigh with satisfaction.)

And give it time.

And if you aren't satisfied with the bread on your sandwiches, don't close up shop, and don't lower your prices, learn to bake better bread.

Because in the end, it's all about the bread and the pastrami, and nothing else.

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Sharon said...

What a fabulous blog. Loved all of it, the story, the pix, the writing, the concept.

You are a true Artisan!

Seren said...

Such a brilliant post! I'm brand new to your blog, but this is such a heartening and enlightened take in the midst of such "books are DYING" panic that I'm immediately passing it on to all of my writer friends.

The Daring Novelist said...

Thanks Seren and Sharon:

This has already become my most popular post. People seem to be passing it on on Facebook and a few other places. (And I've been getting hits from Zingerman's mail servers, even.)

Books aren't dying - it's a boom time. The issue of prices is just one of those blips along the road. (As I said in an earlier series on ebook pricing - if the lowest price were going to drive down all prices, then the Gutenberg Project would have put us all out of business a long time ago.)

My main reason for writing this is not to advocate for higher prices, or lower ones, but to assure people that IT'S OKAY. Books priced ultra low aren't hurting those priced higher. At the same time, those who feel they have to price ultra low to "compete" should chill.

Price at your best guess, and then compete on your great stories. Write more. And more. And more.

Csilla said...

This approach is truly a breath of fresh air. Love what you do and the price that you charge will be the perfect price - no more, no less than the value or it which is filled with love. Thank you for the message and the beautiful pictures.

Karen Wojcik Berner said...

It is easy to get caught up in the pressure cooker of selling frenzy. Your post helped me remember why I am a writer in the first place -- for the artistry of it all, the fun of playing with words, crafting the story.

Thanks for this great post.

The Daring Novelist said...

Yes, and when you do sell, just make it a great experience for the other person.

Thanks, all!

Kae said...

Neat article.
I posted the following quote on my FB page that addresses the same thing: "Literature is like any other trade; you will never sell anything unless you go to the right shop." -- George Bernard Shaw

Now you've told us why that's important.

Unknown said...

Good post, Camille.

The Daring Novelist said...

Thanks again. Food is a wonderful metaphor for life. (I guess that's why it plays such a big part in so many religions.)

And now that it's too late I realize I should have mentioned my sister's artisan business Ellelle Kitchen, where she makes jam by hand. Expensive, but it's love in a jar, and people are eager for it even in these hard times.