Posts tagged distribution
I spent some time on the phone with a lady this morning that runs one of the bigger groups for independent booksellers in the south. It was one more in a long string of conversations that have led to this post. My goal here is two-fold. One, I want to educate everyone, readers, booksellers who might not know, and authors, on the mathematics of a POD book and why the current situation sucks. The second goal is to reach out to all of those same groups of people and work to find a solution. Here toes nothing.
For the purpose of this post, I’m going to use one of my own novels – Heart of a Dragon. This book is available in hardcover and in trade paperback, so I can show you the realities of pricing and distribution.
Out books are printed and shipped through Lightning Source. Lightning Source, of course, is associated with Ingram, but we’ll ignore that for now. Numbers:
Heart of a Dragon – Cover price $12.99 Trade paperback.
Heart of a Dragon – Cover price $24.99 Hardcover
Lighting Source has been very good to us. There is a calculator on their site where you plug in the type of book, the number of pages, and then experiment with prices and discounts so you find a point where you can make a little money and your author also makes money. It’s easy to use.
We have been discounting our books at 40 percent, hoping this would encourage independent bookstores to order from us. I know most of them use Ingrams or Baker & Taylor, and so, I thought giving this discount would at least help. On the above book:
$12.99 – 40 percent discount – we make $3.98 a book. This is split 50/50 with our authors. The rest, we split among the company and the book designer we work with. in other words. Not much.
$24.99 – 40 percent discount – we make $4.53 a book. Same deal.
That is what we make if we manage to sell a book through Ingram. What I’ve been told is – they do not pass this discount on to booksellers. They short discount it – probably no better than 15-25 percent in any case. Why? Because we don’t allow returns. To explain that. If 100 books are ordered, and we accept returns, and only 30 are sold, the other 70 are returned to Ingram, probably damaged at least lightly, and shipped to us, and we have to buy them all at cost. We have no warehouse. It’s a problem. So, we don’t allow returns.
The reality is that Ingrams WANTS you to discount your books 55% and accept returns. If you don’t accept returns, and still manage to get up to 55% you might start to see some bookstore returns, but here’s the thing. For us to make the same amount on the books prices have to go up considerably.
HC – $32.99 – 55 percent discount we make: $4.39
TPB – $17.99 – 55 percent discount we make $4.29
Then, if we were to take returns, we risk having a pile of these laying around….
If people order directly from us, we can offer the deeper discount to THEM. There may be a point in the middle where all this meets up. We may have to raise prices slightly to give bookstores 50 percent without returns. Currently, what we have done (effective the end of June) is to lower our discount to 20 percent, cutting out ANY sales to bookstores through Ingram, but lowering the cost at B&N and Amazon and directly through us and raising the amount per sale that our authors will receive. We don’t want to be for sale only on the Internet, but that appears to be where we’re heading.
What will fix all of this? A Network of independent publishers creating a single source for booksellers to order from that is simple in the way ordering from Ingram is, but that does NOT cost a chunk of the profit to use. Also, and those of you who have published through NYC know this, if we offer returns we have to change our accounting. We have to keep a “reserve against returns” on print book sales for at least six months, meaning you wait longer to get paid for your books, and if they are returned, don’t get paid for them at all. Then we have to have big “damaged book” sales and try to unload them at $5 – $10 a copy to cover print costs.
Another possibility is to make the information on POD books – cover art, description, price available in stores for customers willing to wait for delivery to their store. Maybe laminated product cards?
It’s ridiculous that we can’t find a better way for this to work in this digital age. Print on Demand has changed the availability of books, simplified the math and shipping – but not addressed the distribution. The old model is designed to work well for people using standard, off-set printing, where you pay huge chunks of cash up front, order print runs in larger numbers, dropping the per unit cost, and allowing that 55 percent discount and returns, hope to do better than break even. The really big companies can drop their per unit ridiculously low – and do – by printing literally hundreds of thousands of best-selling books that end up deep discounted, and still make money (while killing thousands of trees) Those of us working through Print on Demand channels need a new method of aggregating the available titles and making them available to libraries and independent book stores in a way that does not inconvenience them out of the game. Dealing with each of us separately does that.
We also need a way to get people into those stores requesting the books, because, in the end, that is the only way to get them to take the extra trouble – and who can blame them for that? I’m open for suggestions, and would love to hear from other publishers using Print on Demand – how you work it, if you take returns, how bad has that been? If the higher prices don’t matter – I would love to know that too. I am trying to make this print line a success..
I don’t know if what we need is a joint catalog put together by independent publishers, a network of e-mail and direct mail programs reaching out to bookstores, raising our prices and caving in…but I aim to find it.