Ingram Returns – Why Do They Happen?

September 1996
by Curt Matthews, Chicago Review Press/IPG

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In last month’s newsletter, I complained about the propensity of small
presses to complain about irritating aspects of the book business that can
not be changed. This time I want to take a hard look at what may well be the
leading subject of such complaints: the undeniable fact that wholesalers, and
in particular Ingram (which since it is by far the biggest, draws most of the
heat on this topic), are continually, and even simultaneously, returning and
then reordering copies of the same titles. What a way to do business! Why do
they do it?

The most popular explanation is that they do it to restart the payment
clock; when they have had a batch of books long enough to have to pay for
them, they return the stock, reorder, and give themselves another 90 or 120
days to pay. If this is true, it is a serious violation of business ethics
and publishers should raise hell about it.

But it is not true. Anyone who has processed returns knows that the cost and
trouble of handling returns greatly exceeds any benefit that could be had
from delaying payment. A wholesaler in financial trouble might resort to this
practice, but as an ongoing business policy it would be self-destructive. So
why then do wholesalers return and reorder the same titles?

There are three reasons. The first is that the national wholesalers have
multiple warehouses serving particular regions of the country. Demand can be
strong in one region, declining in another. Since for the most part such
wholesalers do not…IBPA Members – Click here to view the full article (login required).

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