Bookoff, Amazon Japan, and the Japanese Retail Bookselling Industry

1606 words 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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Thus, the publishers will have more opportunities to choose books to publish since there are many authors willing to sell their works.
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.
NEGATIVE
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.

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