Ask The Editor

December 16, 2008

Major changes in the business of selling books

Filed under: Commentary,News,The Publishing Biz — editorialconsultant @ 11:35 am

The following post will sound a bit “inside baseball” to those not familiar with publishing norms but, bear with me, because this is an important issue for every author and aspiring author.

Borders, the second largest bookstore chain in the U.S., has agreed to stock books from HarperStudio, on a non-returnable basis.

Since the Great Depression, virtually all book publishers have “sold” books to bookstores on consignment, permitting those bookstores to return unsold books for full refunds, even picking up the cost of shipping unsold titles back to the warehouse. While it may have been an essential incentive during the biggest economic crisis of the last century, in today’s market, it can be the practice that puts some publishers and authors out of business.

When books are returnable, publishers can’t accurately assess their profits and losses, even after all their inventory has been shipped to retailers. And authors can’t accurately estimate the sales of their titles, or reap the rewards of unexpectedly good sales, for a year or more. Authors’ royalties are always in doubt because many if not most publishers delay paying out some percentage of royalties due to the possibility of returns.

It’s not unusual for 30 to 40 percent of books shipped to be returned, often damaged just enough so that they can’t be resold. Those returned books are the ones you find on remainder tables for pennies on the dollar.

It’s a brutal business model in the best times.

And it’s not going away just because HarperStudio and Borders have made a different kind of agreement. Virtually every other publisher still does business with bookstores on the old model. But everyone is going to be watching, to see whether this new model makes sense for their own businesses. As an incentive to Borders to take its books on a non-returnable basis, HarperStudio will give Borders a greater discount off the list price.

One issue that I know worries some authors is that bookstores will be even more focused on stocking only surefire sellers if the practice of return-to-sender is ended. But book publishers are already limiting what they acquire to books they believe have a shot at becoming bestsellers. See my earlier post for more details. So, authors have little to lose that hasn’t been lost already and, potentially, much to gain.

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1 Comment »

  1. I loved Tales from Jabba’s Palace. It’s so great to see I’m not the only one. It was great to see how you came up with your idea for this story.

    Comment by samza — December 17, 2008 @ 10:20 am | Reply


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