At Indy Sellers, You Pay Full Price -- but Get a Community

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Book Chains Rewrite Their Marketing Plan

At midnight July 21, Mitch Kaplan will lead a caravan of friends, his children and employees of his three independent Miami bookstores to hand-deliver "Harry Potter and the Deathly Hallows" to more than 1,000 eager readers.

The extraordinary thing isn't so much the over-the-top customer service -- it's the price tag. While Amazon.com is selling the book for the shockingly low price of $17.99, Mr. Kaplan is charging the full-fledged, unadulterated list price of $34.99.
Mitch Kaplan owns three Books and Books locations in Miami.
Mitch Kaplan owns three Books and Books locations in Miami. Credit: Barbara Parker

So why would someone buy from Mr. Kaplan if they can hop on Wal-Mart.com and preorder the seventh installment for even less than on Amazon -- $17.87?

"Our customers know they have to support us for us to survive," said Mr. Kaplan, the former president of the American Booksellers Association and the owner of Books & Books. "Plus, we have the best Harry Potter party in town."

Accruing loyalty
Even though he expects to see a nice bump in sales, the big spending on midnight parties and the gas for all those deliveries means the profits won't by any means be big. But he hopes to recoup dividends later in loyalty. "It's about building a sense of community," he added.

Indeed, often overlooked in Potter-mania is the fact that very few retailers make money from it. "The release of this book will produce a large sales spike in the second quarter, it will be sold at a deep discount, producing very little gross margin," noted the nation's biggest bookstore chain Barnes & Noble in a recent SEC filing. The chain has already logged 500,000 preorders. Amazon.com has already surpassed 1 million.

Mr. Kaplan isn't the only independent bookstore selling the Harry Potter book for full price, said Meg Smith, director of membership marketing at the American Booksellers Association. "Everyone knows you can go down the street and get the book cheaper, but that's not the point."
The children's room at one of Books and Books' locations in Miami
The children's room at one of Books and Books' locations in Miami Credit: Barbara Parker

Giving back
That point is not lost on Russ Lawrence, who is selling the book for $34.99 at his Hamilton, Mont., store. He has already presold 80 books, no small feat in a town of just 5,000 and with Missoula an hour away, "where these's every chain store you can imagine."

For every book preordered, though, Mr. Lawrence is essentially taking the profit he may have made and donating $7 to the library of the purchaser's choice. Any additional profit will help pay for a midnight party, an extravagant event that will include a street party outside the stores with games and puzzles and the dramatic arrival of the books that remains "top secret." (The last release party had the character Hagrid riding in on a motorcycle with the books in tow.)

And if there's anything left? "This is not our vacation to Hawaii," Mr. Lawrence said. "It's our intention to benefit the community and to have a romping good time around books. It will certainly cover pizza for the crew."
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