A new Scholastic program to sell Harry Potter and the Order of the
Phoenix through the publisher’s book fairs division is causing a sharp
pain in the sides of booksellers and raising questions about the
relationship between publisher and retailer.

As booksellers of all sizes prepare their plans to nab buyers for the
new book, Scholastic has quietly unveiled a program that pre-sells it
at fairs and make the book available for pick-up at one of 76
warehouse locations on Saturday, June 21, the book’s official pub
date.

The company is selling the book for the full $29.99 retail price, but
it is offering other inducements to lure customers who would have
otherwise bought it through retail outlets. These include a
baseball cap, an official certificate of purchase, and
the knowledge that money is going to a good cause (as with all
Scholastic book fairs, schools earn a percentage of the proceeds, as
much as 30% in some states). By contrast, a customer who orders the
book in advance via Amazon – the largest outlet for pre-orders – will
paytwelve dollars less, but will get none of these benefits and will
most likely not receive the book until after the weekend.

Not surprisingly, independents have reacted with comments that range
from mild annoyance to outright disgust. “I just found it interesting
that the company wants us to order lots of copies of this book and is
in the back door trying to get our customers. It just doesn’t feel
right,” says Linda Ronberg, co-owner of Linden Tree Children’s
Recordings and Books in Los Altos, Calif.

Many are concerned not only about losing sales; they worry that their
investment in Potter events could go for naught. “I find this
appalling,” says Cissy Greenbaum, owner of Westwinds Bookshop in
Duxbury, Mass, who is planning to have Hagrid roar up to her store on
his motorcycle at midnight. “They, in essence, are undermining the
sales of everyone: independents, big boxes and distributors.”
Booksellers say they are particularly concerned about a party that
Scholastic is holding at its warehouses for those who ordered the
book, an event they see as competing with their own.

ABA CEO Oren Teicher said the group is in the midst of drafting a
letter to Scholastic “expressing our chagrin and concern over what’s
happening.” Barnes & Noble, another party likely to be affected by
Scholastic’s move, declined to comment.

Although this is the first time that Scholastic Book Fairs have
pre-sold a Harry Potter title, brand management director Stacy
Sparrow, who has managed the Potter line for the past three years,
said the move is beneficial to several parties and shouldn’t be a
cause for retailer concern.

“It’s a way for the schools to make money in these economic times,”
Sparrow says, noting that it was the schools that approached
Scholastic. “This is standard business practice for our Book Fairs
division to sell the books.” Indeed, the division has rankled
booksellers for a number of years, offering paperback editions not
available to trade retailers. The division and the hundreds of fairs
it oversees are run separately from Scholastic’s trade unit.

While the stores may be very disturbed by the latest program, the
benefit to Scholastic is clear: The company takes home a larger
percentage of revenue than it would through retailer sales. At a time
when a number of the company’s divisions – and the firm’s stock – have
been going through a hard time, it’s easy to see the program’s appeal.

Sparrow said that booksellers have no reason to be worried as there
are more than enough riches to go around. This should be a “a great
moment for booksellers, consumers and Scholastic,” she says. That is
what we hope booksellers will be focused on. We are working closely
with each and every one of our accounts to create wonderful promotions
and events to drive customers to their local bookstore on the release
of this book.”