No More Returns

August 2006
by Doug Shidell

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No More Returns


by Doug Shidell


Imagine this: The head of one
of the major chains or wholesalers utters three words—“No more
returns”—and changes the business model for the entire book industry.
With two more words—“Net 30”—the industry would be on the path
toward a sustainable future. Pay-to-play, consignment sales, return and
reorder, six-month payment delays, low retail margins, and other strange
characteristics would melt away.


Good riddance to them all. They
are complicated attempts to deal with a bad business model. If we scrap that
model and adapt the proven model of other industries, we could free up cash and
creativity for better purchasing software, better trained buyers, better
editing, higher-quality books, better marketing, and maybe even better pay for
book industry employees.


Why would any bookseller make such
a bold move? Margins, relevancy, and the black eye.


Retail margins provide the
strongest motive for changing the business model. As discussed last month in
“Reducing Returns,” simply moving from net 90 to net 30 terms would let
booksellers negotiate for up to 2 percent more margin.


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