Monday, May 9, 2016

Book Distribution Only Serves the Distributors

Now in the irritating part of the business world, book distribution is an irritant on par with a sour stomach at bedtime. I've never had a single positive experience with the book distribution aspect of publishing. The antiquated system of returns from all directions going right back to the publisher and taking a bite out of profits has come home to roost - again. Out of the blue I received a bill from our distributor Baker and Taylor for a large sum of money. Since no checks had come in from Baker to justify this sum, I contacted them with one of those questions that starts with "What the heck???" I soon discovered that in their business "RETURNS" mean ALL returns from all sales sources whether they went out through Baker and Taylor or not.
This business model is absolutely insane. In fact, I'm going to stamp it with the word "PURE INSANITY". If my company is forced to pay for books we didn't even sell you can imagine the hurting that put on our bank account. Worse though, these types of business practices are driving publishers right out of business. It means being charged for books under the 3L brand no matter where they were sold. You can't have any sort of tracking or cost justification in that game of shells.
The good news is the eBook revolution puts this practice to bed. Our statistics from last sales year was about 1 print book to 9 eBooks sold with slight variations. Also, eBooks only cost a one-time conversion fee, there is no physical storage and postage associated with it, and while eBooks can be returned, it shows up immediately within the first 14 days of the sale. So, Kindle, Nook and iBook (Apple) aren't sending me bills.
As we go forward, we are severing our relationship with Baker. It's not bad news. It's reality. It's not worth it to 3L Publishing nor is it worth it to the author. When your print book goes into circulation and ends up coming right back to us, the money wasted is ridiculous. Let me give you an example. Baker ordered 200 copies of one of our top-sellers. Within weeks, those books started being returned - certainly not enough time to measure if those books would have moved on the bookstore shelf. We paid postage to send them. Those copies came back and the next thing you know 1, 2 or 4 single copies were being ordered at a time. So now double-postage is being paid for the same books that just got returned. Then some weeks later, those same 1, 2 or 4 single copies come back and more small orders get placed. Now we're looking at a "triple threat" on postage costs. Now imagine that on each book, there is perhaps a $5 per book profit margin. If you do the math on double or even triple orders it's painfully obvious all profit is spent on postage.
So, Friend-Os that is the reality of publishing, and it's why being profitable in this business can be challenging. BUT on the good news side, Amazon and other online sellers don't ding you on returns. You have the one-time order and no returns. If people wonder why Amazon is a growing monster, it's because their business practices aren't stomping out the little guy. Yeah, Amazon has its issues for sure, but at least the author and publisher can actually make money. Physical distribution is just a joke.
And since the theme of my newsletter and business is to be positive:
Thank goodness for Amazon, Kindle, Nook and iBook!
Thank goodness for eBooks!

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