Bookoff, Amazon Japan, and the Japanese Retail Bookselling Industry
Although the demand of books in Japan is in a large scale, Japanese retail booksellers do not make much profit …show more content…
Publishers and distributors can set up an acceptable price for all kind of books. If Saihan system is abolished, some books that are not popular such as text books must be sold at a very high price. But due to Saihan system, the publishers can average their profit from the sale of popular books.
The industry also does not need to be in the middle of the price battle. Without Saihan system, all the companies will jump into price battle in order to increase their sale scale. By cutting off the price, small companies will not be able to survive in the book market because bigger companies will have more power to bargain the price from the publishers or the wholesalers.
There is one big negative consequence that needed to be considered. Discounting is illegal due to the Saihan system. It means that they cannot compete in market competition. This is a very big problem for the publishers, wholesalers and retail bookstores because they can lose their sales easily to other substitutes. Entrance of Bookoff is an obvious example of how cripple they are in order to handle the situation.
Bookoff is a successful secondhand bookstore in Japan which has 988 stores (April 2006), and its revenue is over 38 billion yen. It entered to the book market and used the advantage of Saihan system in order to sell cheaper books.