This week, we bring you the fifth installment in our series on the Spanish market with some thoughts about exporting books to the Spanish market. The following is an excerpt from our 2015 market guide Selling Canadian Books in Spain.
Distribution of books in English and in French
The modalities for the distribution of titles by foreign publishers who export their books to Spain vary depending on their business strategies:
- Distribution through a distributor: According to the Federación de Asociaciones Nacionales de Distribuidores de Ediciones (Federation of National Associations of Distributors of Publishing / FANDE), in Spain there are 914 foreign publishing companies with contracts with distributors. These include:
- National companies specializing in exporting. Before contracting with one of these companies, one must take into account their (national or regional) territory.
- Foreign companies based in Spain: those with longer reach are Penguin, Oxford University Press, Taschen, and Cambridge University Press. All have good commercial teams.
- Distribution through wholesalers located outside Spain: There are Spanish bookstores that make all or part of their purchases directly to a foreign wholesaler. These are usually English, Dutch, or French and almost never North American (because of the shipping costs).
- Direct sales to bookstores: This system is the most beneficial for publishers, but also the most difficult, because it involves working one-on-one with bookstores. This can be addressed in two ways:
- Sending the publishing catalogue to the chosen bookstores.
- Employing the services of a commercial agent who can do on-site visits.
- Association with a Spanish publisher with its own sales and distribution: The large Spanish publishing groups have their own distributors, but there are also medium size publishers who distribute their own titles. There are even partnerships between small publishers such as Grupo Contexto, for more efficient distribution and promotion of their titles.
Trade margins
Trade margins are usually the same for Spanish and foreign publishers. However, conditions are more favourable for distributors when purchases are firm (15%) because returns are not profitable.
Typically, there is a 45–50% margin on the retail price, which includes bookstores’ margin (on average around 35%). We find the gross margin of the distributor situated between 10% and 15%.
Returns
Bookstores are often forced to buy foreign books without the right to return. The reason is simple: the return of the book to the publisher has huge costs. In these cases, since the risk is transferred from the publisher to the bookseller or distributor, trade margins on both ends tend to be higher.
Pricing
According to Ley del Libro (Spanish Book Law), the importer sets the final retail price. Because of this, the distributor has control of the price of the book. For books supplied on firm sale, the distributor becomes like the book publisher for the book in Spain, because it bears all transportation costs and the associated risks.
Shipping
Logistics, tariff, and the shipping costs remain the real obstacle to imports from overseas countries.
According to the Schengen Agreement, which has been in force since 1995 and signed by Spain, the movement of people and goods between member countries of the EEC (except Ireland and the UK) is open. This implies a tariff exemption for exports between EU countries. Furthermore, in most European countries, and particularly in Spain, the importation of books does not pay tariffs: the importer pays the 4% VAT on the amount (in euros) of the commercial invoice. The only document to be presented at customs is the Documento Unificado Aduanero (DUA, Unified Customs Document), where payment of VAT is formalized.
Under these assumptions, the recommendations to Canadian publishers are:
- To establish business relations with book import companies. They can be Spanish or European. It doesn’t matter where in Europe they are based, because with the exception of Ireland and the United Kingdom, they will not pay taxes to export to Spain. What matters here is that they have a wide sales network in the country.
- When a Canadian publisher wants to sell directly to bookstores, it can take advantage of the print-on-demand (POD) service to print directly in the country and save all the inconveniences of export. In Spain, there are printers that provide good-quality POD books and handle shipping to bookstores. Meanwhile, Amazon offers publishers the print service Create Space.
Recommendations from FANDE (the Federation of National Associations of Distributors of Publishing) to Canadian publishers:
- Before the export, the publisher should do an analysis of its objectives and marketing formulas. It is therefore advisable to use sources of information relative to the distribution sector or hire the services of an expert consultant in the Spanish market.
- Distributors can provide access to specialized bookstores, either through the different genres in the publisher’s catalogue (e.g., bookstores specializing in the humanities, selling in all languages) or by the language of publication (for bookstores specializing in one language or another). It is advisable for publishing houses to make a genre based analysis and even a title-by-title analysis for their catalogues.
- It is possible that for some publishing houses (especially those small and medium size) it is much more profitable to negotiate directly with a bookstore chain or book-store by bookstore, to find where their titles can fit in.
12/11/2015 | Export, Market Guides