Academic book publisher and distributors are finding online platform like Amazon, Flipkart, Snapdeal and Paytm, unviable and less profitable as the associated costs with the marketplace is higher. Charges such as collection fee, marketplace fee, shipping fees, payment gateway fee, packaging cost, and service tax of 14.5%, which otherwise would not be applicable in the offline market, takes away major chunk of their earnings. Even if the distributors are purchasing the books at 40% discount from the publishers, they hardly tend to make any profits for books sold online.
For instance, assuming that a book priced at Rs 300 and weighs less than 500 grams is purchased by the seller at 40% discount. Considering the various charges – the sellers are incurring a loss of Rs 18-20 on each book sold on online market places (Except in case of Paytm where there is a nominal profit of Rs 2.48. If the book weighs more (particularly the engineering, law, accounting and IT related) the shipping cost increases accordingly and the losses tend to get higher.
The only respite the book sellers have is when the customers are charged for the shipping, which online platforms like Flipkart and Snapdeal discourage and Paytm and Amazon allow to pass the burden on to the customer. Though the online marketplaces are now giving discount to attract more customer, in future, if the sellers are asked to take the burden of discounts, it would further hit their margins. And in the case of Flipkart and Amazon, if the fulfillment is done by these players, the shipping and packaging cost is reduced resulting in about 10-15% profit to the sellers.
Speaking to FE, Amit Karki, Sales head at S Chand and Co. Pvt ltd, one of the largest publishing company in the country said, “For academic books, offline market is still stronger and in no way will the online marketplaces hamper the offline sale. Ideally, the sellers would prefer to go offline as the sales and margins are higher and the associated costs are less.”
Some of the publishers and distributors like UBS Publishers Distributors and Shroff Publishers who sell books both in the online and offline market, say that the latter is the preferred choice, because the associated cost with the online marketplaces are higher.
“It is a myth that purchasing on online marketplace is cheaper. The only advantage online marketplaces offer you is the convenience of sitting at home and ordering anything with just a click of the button, but for the price-conscious consumer, it is more beneficial to call up the local bookshop and ask for home delivery with discounted prices,” Aziz Shroff of Shroff Publishers said.
While Amazon and Flipkart decline to comment on the sales numbers, Amazon India, this year, while the overall book category growth has grown by 200% in terms of units sold, test preparation books, competitive exam books. UPSC, CAT, GATE & JEE books were the ones in high demand.