Business case - Books&Co.
Market
Books&Co. sells exclusively to wholesalers, distributors, and booksellers (B2B - Business to Business) and not to individuals.
The average selling price for wholesalers-distributors is $6 per piece, while the public price is $9.99.
Invoices are collected in about 30 days.
Many wholesalers supply e-commerce sites, so the delivery time (preparation + shipping) must be a maximum of 3 days.
Wholesalers prioritize publishers with a good reputation.
An analysis shows that suppliers give the following importance to each of these aspects:
The market shows strong seasonality in some months of the year, with variations of up to 20%.
On average, a book order consists of about 250 pieces.
The market is composed of 100 national wholesalers and distributors.
In a year, it is expected that 250 x 100 x 240 days = 5,760,000 books will be sold
Products
Books&Co.'s catalog includes hundreds of classic books free from copyright and some budget editions of successful contemporary novels.
Production, storage, and order management is carried out directly by Books&Co. For this purpose, it has 5 machines that allow digital printing of different titles without interruptions.
To produce a book, Books&Co. uses 3 different materials, each costing about $0.30-0.50 per book.
Books&Co.'s suppliers offer medium-high quality products and enjoy a good reputation.
70% of the paper used by Books&Co. is recycled or comes from sustainable sources.
Objectives
Resources
Books&Co. has a share capital of $500,000. Production and offices are located in a single building with a storage capacity of 50,000 pieces and a maximum daily production of 1,000 books. For excess inventory, Books&Co. uses temporary rental warehouses.
The workforce includes: 5 workers, 3 employees, 3 graphics/marketing specialists, and 4 salespeople.
All staff have many years of experience in the sector.
Strategy
To achieve this goal, Books&Co. intends to increase production by purchasing a new machine and hiring a new worker to allow deliveries within 1 day; currently, the average time is 2 days.
Increases in advertising and material quality should not exceed the total production cost of $5.00 per book.
The selling price will remain unchanged to be aligned with the market, i.e., $5.50/piece. The margin is $0.5 or 10%.
Click on the following button to open the page with Books&Co's initial state.
Action plan
To achieve this goal, Books&Co. intends to increase production by purchasing a new machine and hiring a new worker to allow deliveries within 1 day; currently, the average time is 2 days.
Increases in advertising and material quality should not exceed the total production cost of $5.00 per book.
The selling price will remain unchanged to be aligned with the market, i.e., $5.50/piece. The margin is $0.5 or 10%.
Guide step by step
Click on the thumbnails to enlarge.
Step 1
Check initial order value and market share.
Click yellow button to open control panel.
Step 2
In "Human Resources" section, increase workers from 5 to 6.
Step 3
In "Production" section, increase machines from 5 to 6.
Step 4
In "Sales & Advertising" section, decrease preparation time from 1 day to 0 days.
Step 5
In "Sales & Advertising" section, increase monthly advertising investment from $35,000 to $40,000.
Step 6
Click " Apply changes & run" button.
Step 7
Check if orders exceeded 4,000 and market share is above 16%.
Summary: To boost sales, we cut shipping prep time to be more competitive. We increased production to avoid delays. To support investment in human resources and machinery, we increased promotion spending to improve product visibility and strategy change.
Keywords: b2b book distribution, wholesale book market, publisher case study, market share growth, book production efficiency, digital printing strategy, sustainable publishing, business expansion analysis, supply chain management, book industry economics.