Biblio Announces New Pricing Schedule
Biblio offers choice of pricing schedules.
By Michael Stillman
The third largest old book site on the internet recently announced a new pricing schedule for its dealers. No, it is not a simple price increase. It is an option. Biblio now allows its dealers to choose from two pricing schedules, and for some of them at least, it could mean a price decrease. It all depends on how the dealer sells.
Biblio, in the past, has worked on a straight commission schedule. You pay 15% of sales up to a certain point, 7.5% on sales over that level (the threshold depending on how many books you list). Nice and simple, and no cost if you make no sales.
Biblio has retained a commissions only structure, but has now added a combination commissions and flat fee option. That is option, not requirement, as sellers may remain on a risk-free commissions only structure if they wish. The use of a combination structure is one that has gained popularity among the selling sites. Abebooks previously moved from a flat fee only to a combination structure, and now Biblio goes to a (optional) combination structure from a commissions only structure. The popularity of a combined fee schedule by the sites makes sense. Commissions allow them to participate in the success their dealers enjoy on their sites, while flat fees provide a predictable, guaranteed flow of monthly income. Both are important to any business.
Biblio's two structures work this way. Plan A is a flat 15% of sales. This is not quite so favorable as the old commission structure, at least for those with higher sales. The old formula was 15% up to a certain level of sales (based on number of books listed). After that the rate dropped to 7.5%. Now, it no longer drops.
However, larger dealers can opt for Plan B instead. This adds a flat monthly fee, ranging from $10 for up to 10,000 books listed, to $25 for 40,000 books listed, plus $5 per additional 10,000 books. Under Plan B, all commissions are at the 7.5% rate. None are charged at 15% any longer.
For the smaller dealer, there is effectively no change. Those who did not sell enough to reach the cut off rate where commissions drop from 15% to 7.5% can choose Plan A and they experience no change at all. They pay the same 15%, including zero if no sales are made in any given month.
For larger dealers, the structure actually offers a price reduction! When was the last time you saw that? For example, under the old schedule, a seller who listed 25,000 books, and made $300 in sales ($300 being the cut off between the 15% and 7.5% rate) would have paid $45. Under the new formula, that dealer pays a $20 flat fee, plus 7.5% of his $300 in sales, or $22.50 in commissions. His total is now $42.50, versus $45 under the old formula, a savings of $2.50. Since both structures charged 7.5% on sales above $300, that $2.50 savings will remain no matter how much larger his sales might be.
Biblio Announces New Pricing Schedule
The only places where the dealer who reaches the old minimum cut off point loses is at the very bottom (marginally), or where his listings exceed 130,000 books. The dealer who used to list under 500 books but made $133 or more in sales pays a meaningless additional nickel. However, at over 130,000 books listed, even Plan B is more expensive because the old structure had no further cut off points above 100,000 listings. The cut off point at 100,001 or 1,000,000 was the same: $900. The new structure adds an additional $5 for each 10,000 books listed above 40,000. So, under the old formula, a dealer with 100,001-110,000 books listed (the cut off was $900 in sales) paid 15% of $900, or $135. Now, he will pay $60 in flat fees and 7.5% or $67.50 in commissions for a total of $127.50, a savings of $7.50. He will only pay more after he crosses the threshold of 130,000 listings, when an additional $10 in flat fees will turn his $7.50 gain to a $2.50 loss. From that point on, every additional 10,000 books listed will cost him another $5 per month.
What we see is that under Plan B, any bookseller who lists between 501 and 130,000 books and meets the old cut off point in dollar sales, will save money under the new formula. Only the mega-listers pay more. Those whose sales were too small to reach the old cut off points can simply stay with Plan A and their costs will not change. Can anyone who lists under 130,001 books lose under the new formula? Yes, it can happen, though the explanation is a bit more subtle.
The bookseller who will pay more is the one with inconsistent sales, that is, one who some months sells over the old cut off, and others under. Plan A works for those who sell below the old cut offs, Plan B for those who sell over, but those who bounce back and forth can pay more, since they must select one plan or the other, and choose in advance. Here is an extreme example. In the first month, a bookseller with 50,000 listed titles, sells $600 worth of books (the old cut off was $433). Under the old schedule, he would have paid 15% of $433, or $64.95, plus 7.5% of the remaining $167 or $12.52. Total was $77.47. Under Plan A, he pays $90, or $12.53 more. Under plan B, he pays a fixed $30 plus $45 in commissions, or $75, for a savings of $2.47.
In the second month, the dealer is shut out. Sales are zero. Under Plan A, he pays nothing, same as before. It's a wash. So after two months, he is still $12.53 behind. Under Plan B, he pays only the monthly listing fee in the second month, $30, or $30 more than he would have under the old formula. Combined with the $2.47 he saved in month one, under Plan B, he ends the second month $27.53 behind. So this is the dealer who ends up paying more under the new pricing. The dealer who consistently sells only a little stays the same, the one who consistently sells a lot saves money, while the one whose sales jump up and down pays more. Slow or fast, but steady, wins this race.
Biblio also added a $0.50 minimum charge per book. That means the commissions on a book priced under $3.33 will go up. Frankly, I don't know how anyone could expect Biblio to make a sale for less than fifty cents in commissions anyway. You may have to sell those dollar books at a yard sale. The maximum commission per book remains at $40, same as before. Biblio also plans to make more frequent payments than the old once per month to its booksellers under the new plan.