Bookoff, Amazon Japan, and the Japanese Retail Bookselling Industry

1590 Words Oct 24th, 2008 7 Pages
Japan is a large market for bookselling industry. According to the case, Japanese retail bookselling industry has an annual sale of nearly 8 billion dollars. Even though there seem to be a big opportunity for the retail bookselling company to entry Japan, there are things that need to be considered, especially a law of Resale Price Maintenance System or Saihan System. Since 1953 Japanese publications must be sold at fix price due to the Saihan system. It has a huge impact on the publication business both on internal and external firms. Some groups are gaining advantages from the system while some are requesting an abolishment.

Although the demand of books in Japan is in a large scale, Japanese retail booksellers do not make much profit
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The success of rental book stores in Japan also indicates that readers are satisfied with reading without owning.
Third, there is an intensive competing situation among retail booksellers. Along with Saihan system, there is also the Consignment Sales System that allows wholesale distributors and retail booksellers to return unsold books back to the publishers without any charges within a set period of time. Hence, opening a retail bookstore, one needs no experiences but capital only. Therefore, there are a large number of bookstores in Japan. No matter where the customers purchase the book, it costs the same so there is no point of going to a leading bookstore when they can buy at a convenient store.

To look into the consequences of Saihan system, it has both positive and negative effects towards the publication industry.
Saihan System allows the publishers to set up a fix price which affects the price of the whole process until the books distribute in a retail bookstore. – See figure 2 for the profit margin that is set for wholesale distributors and retail booksellers. Publishers and distributors can make sure that they are making profit out of each book they are selling and enable them to distribute a wide variety of titles in small volumes and makes possible royalty payments for books with a small circulation. In addition, the authors will also receive fair royalty