Book Publishing's Dirty Little Secret
Book "returns," the practice of allowing bookstores to return unsold copies to the publisher, and currently being used with 35-40% of all books delivered to trade bookstores, is a subject of great debate, especially among independent publishers.
The returns system, established during the Depression Era to help assure that bookstores, publishers, and authors could stay afloat, has turned into an abuse of basic business practice that allows both retailers and wholesalers to order unrealistically, delay payment, and disrupt publishers' cash flow. The result is higher book prices,an increased gap between bestseller and midlist books, and the waste of millions of tons of paper and the trees it's made from, not to mention the ink, energy and other resources that go into books. The numbers of them that go into landfills is shameful.
Big Box stores like Wal-Mart and Costco are new to bookselling and the system's biggest abusers. They must find it odd to be given the gift of guaranteed sales -- you can bet they don't that kind of deal from any other vendor -- so they over-buy books like drunken sailors, knowing they'll eventually return almost half of them.
Originally published in Sept. '05, this two-part article by Angela Hoy, editor of WritersWeekly.com and founder of P.O.D. publisher BookLocker.com, explains her company's "no-return" policy, and explores the issue and its growing impact on authors and publishers. With quotes and links to articles from the Wall Street Journal and an Authors Guild study, it's a good way to familiarize yourself with the controversy and to help form your opinion on whether or not to accept returns in your own publishing business.
Lessons from a Professor Turned Publisher
An adventure in lifelong learningIt is said that to be a good teacher, one must also be a good student. For example, the process of earning a doctorate degree is primarily one of learning to synthesize information already available, to see the gaps in that information, and to acquire the skills to fill those gaps.
That is the approach that Linda P. Morton used to become a professor and throughout her career in education. Now, she is bringing it to her second career, as an author and publisher. The teacher has again become a student, and what she has learned so far is that marketing, finances and customer service are paramount to achieving success as a publisher.
“I decided to self-publish because the major national publisher with whom I contracted my textbook – Public Relations Publications: Designing for Target Publics – was more interested in how many copies they could sell than in how well the book filled an unmet need. After six years of self publishing, I better understand the need to sell many copies in order to be profitable,” Morton says.
When she first published her textbook in July 2000, she was still working as a professor. Because of the demands of that position, she turned her book over to another publisher for distribution.
“The other publisher didn’t market my book, and I did no marketing besides taking books to conferences and giving them to other professors who taught courses similar to mine. I did one e-mail promotion in 2002 and by the time the first printing sold out in 2003, 17 universities were using my book,” Morton says.
New Title, New Marketing Approach
For the second printing, she did a select direct mail promotion to 150 educators, but only replaced the schools that she had lost as professors left universities. For the second edition, Strategic Publications: Designing for Target Publics, she implemented a marketing plan and prior to publication has already done postcard mailings to 5000 libraries and bookstores, 3300 journalism and mass communication professors, and more than 3000 graphic design professors.
“The title change broadens my market, and I’m getting as many requests for information packets and complementary copy forms from graphic design and other mass communication professors as from public relations professors. Although a book must fit a niche, I’ve learned not to overly limit my market,” Morton says.
Moving Beyond the Niche
She has also started a Web site – www.BestBooksPlus.com – on which she sells excerpts from her book as e-books. “I envision the e-book purchasers to be small business owners that need identity symbols and publications, but can’t afford to hire to have them developed,” she says. To attract this market, she provides free templates that can be adapted for different businesses. She also provides lots of explanation about her selection of graphics, fonts, typographical items, etc.
“Although my book was designed as a textbook for university classes, I’m learning of other ways it can be used and marketed,” Morton says.
The second major lesson she’s learned relates to finances.
The other publisher paid her three times per year and charged 20 percent for distribution. In September 2004, she realized that the number of books being sold couldn’t support the 20 percent for distribution plus the bookstores 20 percent discounts so she took back control of her publishing business. She then took early retirement in December 2005 to operate her business full time.
“The other publisher made no attempt to collect. He didn’t send out statements, but just took the money as it came in. Sometimes that was a year or more after the books had been shipped. My first action was to implement regular statements and policies to assure that I get paid.”
Tough Discount Policy
She adopted a policy from Tom & Marilyn Ross’s The Complete Guide to Self Publishing, establishing due dates in 30 days from shipping and delinquent dates 90 days from shipping. After an account becomes delinquent, discounts are forfeited and finance charges are added. In addition, delinquent bookstores have to prepay for future orders.
“This policy helped, but when one of the largest chains refused to pay the finance charges, I had to drop it. Other delinquent bookstores would send checks for the original invoice, and I would have to repeatedly bill them for the forfeited discount,” Morton says.
In addition, she was allowing bookstores to return books up to a year from shipping. The books were almost always too damaged to sell to another bookstore, and some returns appeared suspicious.
“I had one bookstore order 60 books before the semester began and return 55 books after the semester was over. All but three of those books were damaged, appearing to be used. Another bookstore recently requested to return 34 books. When I checked my records, I found that it had ordered only 35 books during the past year,” Morton says.
Time for a Change
Thus, she just implemented a new policy. She is now requiring that all customers prepay, and she will not accept returns. To compensate the bookstores for the inconvenience of prepaying and the no return policy, she raised their discounts from 20 to 30 percent.
“I believe this is a win-win policy. The bookstores make more profit. My cash flow is improved, and I don’t have the headache of damaged returns,” Morton says.
The announcement of the new policy has just recently been mailed to her bookstores so it is too soon to know their reactions, but Morton is confident she will not lose sales because of the new policy.
“In regular bookstores, the stores’ representatives make the purchase decision, but in university bookstores, professors make the decisions about the textbooks they will use in their classes. Thus, I don’t expect the new policy to have much effect. The store representatives may complain, but they will order the books requested by the educators,” Morton contends.
That leads to her third major lesson – customer service. “Just a year ago, I knew few of the names of educators using my books. Now I have at least phone numbers and e-mail addresses for them. I’ve also started communicating more frequently and directly with them,” Morton says.
She has started an e-mail newsletter to communicate with them regularly. She plans to do an interview with an adopting educator for each issue, to provide new information as she begins working on the third edition, and to provide a column for educators to share their teaching experiences and tips. She also provides an on-line instructor’s manual, complete with a password-protected test bank.
“I now think of educators who use my book as a community. I want to take care of them as customers, but beyond that I want them to feel that sense of community, to develop relationships with each other as well as with me, and to learn from one another,” Morton says.
She believes that she still has much to learn regarding marketing, finances and customer service, but she is quick to learn and willing to take risks to make her publishing business a success.
“I know I’ll have many more lessons to learn, and I’ll make mistakes along the way, but one of the advantages of being small is being able to adapt quickly. If a policy and practice doesn’t work, change it. That’s the sure way to keep learning and growing.” Morton says.
Professor Morton ought to know. She’s made a career out of it.
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Linda P. Morton has designed newspapers, advertisements and full range of strategic and marketing publications. She has also taught publication design for 15 years, and has written a continuing column in Public Relations Quarterly since Fall 1998.
Strategic Publications: Designing for Target Publics
by Linda P. Morton
ISBN: 0967924812; 295 pg. paperback (August 2006)www.BestBooksPlus.com