Ultimately, if they really do stop selling to Seagull, they will probably put Seagull out of business, purchase them or at least make them completely irrelevant in the market place.

From this move, they will be able to increase the average retail price of their books in the market place, drive more foot traffic to their own stores and sell more books through other outlets as well, something they have been wanting to do for a long time. They can largely determine the future of covenant as well.

Signature Books is not a viable factor in any of this, their market share is small, many of their books are controversial and niche.

The mystery in all of this, from a capitalistic point of view is that DB ever allowed Seagull to enter and capture so much of the LDS book market in the first place. I think it has been an interesting evolution. In the early years, the LDS market was really not much of a money maker and the primary motivation of the church was not more prophet directed that profit directed. Their goal was to promote the church and church books any way they could… and how they were perceived by the market place was very important to them back then.

My how things have changed…

To be honest, I think Seagull, like every independent LDS bookseller, doesn’t have much of a choice. Its part of the power that Deseret Book has over this market. (See my post on the problem of Deseret Book).

You are right that any time you purchase from a competitor, you are vulnerable. In this sense Deseret Book is also vulnerable, becaue their stores purchase from Covenant, Seagull’s sister company!

Of course, the real solution is what I called for a few weeks ago (and what I have long thought the LDS market needed), an LDS market wholesaler.

If the market had a wholesaler, then Seagull could purchase from the wholesaler instead of Deseret Book. But since the wholesaler would also sell to a lot of other customers, Deseret Book couldn’t refuse to sell to them to stop Seagull Book from getting its products.

Perhaps this is a pipedream, but I think it would solve a lot of problems in the LDS book market.
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Just my opinion. I could be wrong.

(BTW, I agree that in the short-term this will hurt DB, but in the long-term they will get what they really seem to want: distribution control of their product. What is their arrangement with Wal-Mart? You have to ask yourself: Why would DB leave their product in Wal-Mart and not in Seagull?)

You are correct. The $1.5 million is my estimate of the annual amount Deseret Book gets in cash from Seagull for the sale of their titles.

BUT, I disagree that they will get this all back. The reason is that as much as 50% of these sales are impulse purchases — made by consumers who weren’t necessarily looking for a Deseret Book title, but saw it on the shelf and bought it.

With no Deseret Book titles on the shelf, these consumers won’t purchase Deseret Book titles at all! And those sales will be lost entirely to Deseret Book.

Yes, some consumers are looking for a specific book, and those will go to Deseret Book stores now, and may make impulse purchases there. And you are correct, they will probably pay something more for their purchases.

It remains to be seen, however, how much of a drop in sales this will cause.

A few years ago Deseret Book tried to pull their titles from Walmart, apparently on the theory that people would switch to getting the books at Deseret Book — that lasted about six months, from what I understand.

I too feel bad for Seagull — and I think that this move is simply wrong. As I said above, Deseret Book had at least one better alternative. Its too bad they chose the most extreme way of making their point.

I do agree that in a strict legal sense it would be difficult to prove that Deseret Book had a monopoly, but that for all practical purposes they do, and I feel bad for Seagull.

• Deseret Book to
  stop suppplying rival (Salt Lake Tribune)
• Seagull Book No Longer
  Allowed to Sell Deseret Book Products (KSL TV)
• Seagull Book Can No Longer Sell Church’s Books (KUTV)
• LDS bookstore cuts competitor’s supply (Salt Lake Tribune)
• Deseret Book servers relationship with Seagull (Deseret Morning News)
• LDS Church firm no longer will allow private chain to sell its books (ABC 4/Associated Press)

1. This would be the competent move. I’m not as sure of Deseret Book’s competence as you apparently are.

2. Written? I doubt it. But I’m sure there is a number of lawyers ready to take it on, and they may have dones some research on this.

But, IMO, it will never get to a lawsuit.

3. It is possible that it will kill Seagull Books. I don’t think it will kill its sister company, Covenant (the publisher), but that is also possible, if Kofford doesn’t have them legally separate enough.

4-6. Very possible.

As for Deseret Book’s “business prowess” or “desperation” I don’t think its “business prowess.” I estimate that this will cost Deseret Book something like $1.5 million in sales by its publishing arm. A good portion of those sales won’t be recouped by customers buying Deseret Book’s titles elsewhere.

It just stupid to loose those sales, when there are other options, like reducing the discount Seagull gets, which could actually make up, at least in part, for Seagull’s supposedly poor merchandising and promotion.