Conduits to Customers, Part 1: Distribution Options

February 2011
by Linda Carlson

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The process of getting books to customers generally has two parts:

Distribution, a word that’s usually defined in the book business in terms of relationships with wholesalers and/or distributors that serve bookstores but that is also applicable to relationships with wholesalers and distributors outside the trade.

Fulfillment, which involves warehousing, invoicing, packing, labeling, and shipping books in response to orders.

This is the first of two articles covering the ways many IBPA members handle these two jobs, both for bound books and for books in the form of electronic files that can be anything from simple PDFs to full-color text and video for e-readers.

The suggestions from members will be helpful if you’d like to expand your markets or make changes in the way your books get to end users. And if you have authors who sell copies of their titles, you may want to pass the information on packing and shipping along to them.

This month I’ll describe methods of distributing books (for more on this subject, see “An Evolved Distribution Solution” on page 3). An upcoming article will cover the logistics of physically getting books to customers.

Distributing on Your Own

When you self-distribute, you choose whether or not to seek wholesaler relationships; you submit your titles to Amazon.com and other Internet retailers; you contact catalog and specialty stores, libraries, and possibly bookstores; and you probably sell directly to readers too.

This DIY approach has several advantages for very small publishers: the discounts can be lower; you’ll know how many sales calls are made, and to whom; you’ll know exactly when orders are fulfilled; and you can develop personal relationships with at least some of your customers.

One important reason to self-distribute, perhaps in combination with using a wholesaler or distributor, is the ability to reach specialty markets. Joe Smiga of the J.P. Smiga Co. reports, “I sell to the Agway stores, veterinarians, sport shops, and pet boarding facilities.” Similarly, Cypress House sells direct to veterinary clinics and sports gear retailers, as well as to gift and frame shops, salons, and companies that run conference bookstores.

At Toolemera Press, Gary Roberts sells direct to woodworking schools and by tailgating at auctions, which works as informal market research: “I learn a lot about what people want by chatting about the books,” he says. “One woodworking school has preservation carpentry students who are interested in early American architectural books, books the average woodworker cares little for.”

If you self-distribute, it’s easy to insert promotional material with shipments and add marketing messages to invoices. (Although many publishers insert only catalogs or coupons, Northern California’s Lost Coast Press puts red ostrich feathers into each copy of its popular Dancing Naked in Fuzzy Red Slippers, not something a distributor is likely to do.)

Self-distribution also lets you determine which returned books with dust jackets can be marketed as new if re-covered.

On the flip side, every hour you spend on package insertions, selling, packing, hauling books to the post office, and collecting past due bills is an hour that you’re not devoting to acquisitions, editorial matters, design, printing, and marketing. Just think of the time spent on marketing by Mary Jo Hazard, who sold 1,300 copies of her debut title, The Peacocks of Palos Verdes, in its first three months: “I contact every one of the 29 venues that carries my book at least twice a month to see if they need more,” she says, adding, “and I sign and deliver them—or have my assistant do it.”

A more significant disadvantage is that many bookstores will not order from smaller publishers except on a special-order basis.. As a result, unless you have ways to stimulate demand for your books in the trade, self-distribution will probably limit the number of copies you sell in trade channels.

Surprisingly, self-distribution via Amazon.com’s Advantage program can be more expensive than working through a wholesaler or distributor. Pete Masterson of Aeonix Publishing Group reports: “I now use Beagle Bay as a distributor, and it’s a direct vendor to Amazon. While there are additional costs to me of having a distributor, this change actually resulted in a greater margin because the net discount on Amazon sales changed from 55 percent with Advantage to 46 percent net.”

Mark Wayne Adams of Longwood, FL, makes a related point: “Yes, distributors take a percentage of the book sales. So what—that’s a book I couldn’t have sold on my own.”

At Mountaineers Books in Seattle, sales and marketing director Doug Canfield says it’s daunting to think of the investment and expertise needed to start self-distribution today. Mountaineers Books was “self-distributed from the start in 1960,” he explains, “and this was easier when it published only outdoor recreation titles for a very local area. The distribution function grew from there along with the publishing program, and we now distribute worldwide.”

“To manage volume efficiently, you need enterprise-level software that will accept orders and route that data to the various functions, including fulfillment,” he continues. “It also has to be able to manage back orders, remove books from inventory, track stock in multiple locations (i.e., firsts, hurts, consignment), print packing and picking slips, and create labels.”

Then there’s EDI (aka Electronic Data Interchange). As Canfield emphasizes, “The ability to receive orders electronically and send back a variety of electronic documents via EDI—which is costly and complicated—is now a regular part of doing business with the large chains and wholesalers.”

Using Wholesalers

Wholesalers outside the book trade are often good conduits to target markets. Working with wholesalers that serve the trade is important for publishers that want their books inventoried by both chains and larger independent booksellers. Most do not buy from small publishers except to fulfill special orders. Many libraries also prefer to deal with wholesalers rather than individual publishers.

Some IBPA members can meet major wholesalers’ requirements, and all IBPA members can now take advantage of the new IBPA-Ingram marketing initiative (see “IBPA Goes ‘E’—New Marketing Programs for 2011” in the January issue), but wholesalers generally are selective about what titles they carry. Also, they often require a setup fee, buy on a returnable basis, and usually pay no sooner than 90 to 120 days after they receive stock. In some cases, they pay 120 days or more after they sell the books.

Book trade wholesalers order traditional printed books from publishers at discounts from the cover price that are usually 50 or 55 percent (in other words, the publisher will receive $4.50 or $5 for a $10 title). They also buy from distributors such as IPG and NBN.

Although wholesalers may make sales figures available to customers and usually issue catalogs, they don’t typically employ sales representatives to promote titles. This means that getting bookstores and libraries to order books is the responsibility of the publisher (and sometimes the author).

Using Distributors

Distributors deal with wholesalers and retailers for publishers. Book distributors’ contracts usually require exclusivity in the trade; in other words, the distributor will probably insist on handling all your sales—including sales made to online retailers—to book wholesalers, libraries, and bookstores. But some distributors require exclusivity only for certain geographic areas or specialties.

Distributors are even more selective than wholesalers about the titles they carry. They too may have setup fees in addition to requiring discounts from retail price, which can be 65 to 70 percent. Some distributors will inventory an entire press run; others require that publishers maintain their own warehouses.

Like book wholesalers, book distributors buy on a returnable basis. Unlike wholesalers, most do have sales representatives who present books to bookstores and other potential trade customers.

It’s wise to realize, however, that publishers and authors still have to do most of the book promotion, and to make sure their distributors know what they’re doing. As Mark Wayne Adams says, distributors “need to be vested in your project. I update my distributor about events, awards, new releases, and any media publicity I receive. Its sales team will sell if they know you’re doing the same thing.”

Distribution services are also available from several publishers, including Random House and other huge firms as well as smaller companies such as Epicenter Press in the Seattle area and Todd Communications, a directory publisher in Anchorage that makes Epicenter titles available in Alaska. The larger Mountaineers Books also provides distribution for a handful of publishers. As Doug Canfield explains, “For this to be successful, the distribution client needs to be aligned with our niche—outdoor recreation, sustainable lifestyle, and conservation topics.”

At Penfield Books of Iowa City, IA, owner Joan Liffring-Zug Bourret comments similarly: “The title must tie into our own publications, and, in our opinion, enhance cultural understanding.”

Being distributed by a larger publisher with titles similar to yours can mean benefiting from its customer and sales rep relationships in target markets. Mountaineers, for example, makes more than 35 percent of its sales to outdoor retailers, parks, big-box stores, and direct to consumers, and about 10 percent to schools, museums, and gift stores, a hard market for small publishers to penetrate.

For some titles, publishers can arrange distribution via magazine publishers. Late in 2010, Gary Roberts contracted with F+W Media, publishers of craft magazines, to carry his titles through its Woodworkers Book Store. “F+W will carry any titles that have BISAC codes that match their product lines and that are wholesaled by Ingram,” Roberts says. “The company handles the billing, deducts 30 percent of the profit, sends me 70 percent, and I handle the ordering through Lightning Source for the customer.”

And some printers have distribution affiliates. Several IBPA members have their books printed at BookMasters Inc. and distributed through its AtlasBooks Distribution Service in Ashland, OH. Others work with Greenleaf Book Group, an Austin, TX, firm described by development manager Tanya Hall as a distributor that offers publishing services.

Using Partners for Digital Distribution

For digital printing and print-on-demand delivery of traditional books, some publishers work with Ingram’s Lightning Source or Amazon’s CreateSpace. These companies and others also have programs for converting printed books to electronic formats and then distributing them. Smashwords, another electronic book publisher/supplier, has such programs for publishers and self-publishers.

Then there’s OverDrive, the vendor most often mentioned when I contacted libraries about how they purchase e-books (see “Pitching Books to Indie Stores and Libraries,” July 2010). A distributor founded in 1986, OverDrive serves libraries, schools and universities with digital media of all kinds: books, audiobooks, music, and video. OverDrive claims to supply digital media to more than 11,000 libraries, schools, and retailers. NetLibrary, since early 2010 a unit of EBSCO Publishing, says it offers libraries 200,000 e-books, thousands of e-audiobooks, and other collection development resources.

Many IBPA members sell digital books directly. Mountaineers, for instance, recently launched a Web site for sales of PDF editions of its books. “We’ll sell them both singly and in combination with their respective print editions,” Canfield reports.

Using Sales Reps

Independent commissioned salespeople typically represent several noncompeting publishers. They often also sell such sideline merchandise as stationery, journals, and toys. Besides booksellers, their customers may include gift, cookware, toy, and children’s stores, card and museum shops, college campus stores, garden centers, hospital and hotel gift shops, florists, clothing stores, and spas.

Unlike wholesalers and distributors, commissioned sales representatives do not warehouse any books. And even large sales-rep groups handle only a fraction of the number of publishers represented by wholesalers or distributors.

For more information about how publishers can work with reps, see NAIPR.org, the National Association of Independent Publishers Representatives site, which also has a directory of member sales-rep groups.

Linda Carlson (LindaCarlson.com) writes for the Independent from Seattle, where she spent a dozen years self-distributing job-search guides. She owns her own hand truck.

A Selective List of Wholesalers and Distributors

Wholesalers that serve accounts across the United States include Ingram Book Co., Baker & Taylor, Midwest Library Service (in Bridgeton, MO), and Partners (in Holt, MI, and Renton, WA). Some give discounts on their setup fees to IBPA members.

Regional and specialty wholesalers include:

• Bergquist Imports in Cloquet, MN; Scandinavian and Nordic topics

• Big River Distribution in St. Louis; Midwest regional books

• American West Books in Sanger, CA; regional

• Skandisk, Inc., in Minneapolis; a publisher and wholesaler of books, calendars, cards and stationery, and novelty gift items, especially on Scandinavian themes

• Catholic Word Publisher Group in Juneau County, WI; religious books for parishes, schools, and individuals

• Small Press United in Chicago, the Independent Publishers Group subsidiary for smaller publishers

• STL Distribution in Elizabethton, TN; describes itself as the largest Christian distribution nonprofit in the world

• Follett Corp. in River Grove, IL; serves public libraries and the education market

• Brodart Co. in Williamsport, PA; serves the library market with both purchase and book rental programs

• Quality Books Inc., in Oregon, IL; serves the library market with adult nonfiction and selected children’s and young adult book titles and nontheatrical DVD titles (no poetry or novels)

• Unique Books in St. Louis, MO; also serves the library market and claims a special emphasis on small-press titles

• The Book House in Jonesville, MI; another library wholesaler

• American Wholesale Book Co. in Florence, AL; a subsidiary of Books-A-Million that serves Southeast retailers

• The News Group, with its U.S. book-buying office in Bloomfield, NJ; provides periodicals, calendars, and books (mostly mass market paperbacks) to such U.S. and Canadian retailers as Kroger, Safeway, Albertson’s, Target, Publix, Shoppers Drug Mart, 7-Eleven, Indigo/Chapters, and BC Ferries; it states that its policy is to not consider publishers with fewer than five books in print or print-on-demand or self-published titles

• Raincoast Book Distribution Ltd, in Vancouver, BC; handles English-language trade titles oriented to bookseller, library, and gift and specialty stores (no foreign-language publishers, textbooks, single titles, or self-published books)

• BCH Fulfillment & Distribution in Harrison, NY; describes itself as handling titles that are often underrepresented (including titles on addiction, animal communication, and personality disorders)

• New Leaf Distributing Co. in Lithia Springs, GA; conscious living, natural wellness, and spiritual realization media

• Nutri-Books & Products in Denver; health books, cookbooks, and lifestyle products for health and baby products retailers

• Alpen Books in Mukilteo, WA; sells to outdoor-gear retailers, sporting goods stores, and college, university, and private outdoor education and recreation programs

• Booklines Hawaii Ltd. in Mililani, HI; serving the islands

• Canyonlands Publications in Bellemont. AZ; specializes in books and media of the Southwest

• Rainbow Resource Center in Toulon, IL; homeschooling and classroom materials

• Gem Guides in Baldwin Park, CA; books on rocks, minerals, gemstones, fossils, lapidary arts, crystals and crystal healing, jewelry and bead crafts, gold prospecting, and treasure hunting

Explore Distribution Costs Before You Publish

Many prospective publishers are shocked by the discounts that bookstores, other retailers, wholesalers, and distributors demand. Even if you have some publishing or wholesaling experience, IBPA members caution you to estimate all possible costs before you commit to publishing a book.

One self-described “newbie” reports: “I lose 90 cents for every book that’s sold through my distributor because I allowed myself to be pressured into a low retail price” for a book that was expensive to produce. “Obviously this is not a sustainable business model.”

This member’s advice: List all the expenses involved in acquiring, editing, copyediting, designing, printing, warehousing, and distribution on paper, making sure you take account of discounts, shipping, and the handling of returns. If you don’t understand, “keep asking questions until you do. Don’t let people badger you into making commitments before you understand.”

For help with accounting and budgeting, see “A Crash Course in Accounting Basics” (November 2010) and Marion Gropen’s “Building a Better Budget” series that concluded in the December 2010 issue, available via ibpa-online.org.

 

 

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