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The Complex World of Distribution Partnerships

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PUBLISHED JANUARY 2017

by Deb Vanasse, Founder, Running Fox Books


Deb Vanasse

Warehousing, orders, fulfillment, payment, shipping, returns. From a publisher’s perspective, the complex system through which books enter the marketplace can seem daunting.

By partnering with a book distributor, independent publishers can gain access to this system and stand to benefit from the advice of industry experts who share their passion for success. But to forge a fruitful partnership, publishers need to understand the difference between full-service and wholesale distribution, how they can qualify for the services they need, and how to structure and maintain distribution arrangements.


The Biggest Divide

The biggest problem CEO Leah Abrahams of Mixed Media Memoirs LLC faces is lack of distribution. Several years ago, she used a New York-based fulfillment house, but then discovered that the company lacked a sales force and its return policy didn’t accommodate the expectations of retailers. Now she has no distributor for her print titles.

Others understand Abrahams’ frustration. As She Writes Press publisher Brooke Warner puts it, not being able to secure a full-service distribution arrangement creates “the biggest divide between traditional and self-publishing,” especially when it comes to discoverability. Confusion over the distinctions between full-service distribution and wholesale distribution compound the problem.

Full-service distribution, also known as traditional distribution, “always encompasses a sales force actively selling your books into accounts,” Warner explains. In addition to facilitating pre-orders, full-service distributors ensure that inventory is readily available in the regional warehouses from which retailers are accustomed to ordering.

Publishers who don’t meet a distributor’s requirements for full-service distribution may opt for what some term “wholesale distribution,” a more passive relationship in that the distributor takes orders, bills retailers, ships orders, and (sometimes) processes returns without actively pushing sales. Ingram, for instance, provides full-service distribution for larger publishers, but Ingram’s Lightning Source and IngramSpark® offer only wholesale distribution, explains Robin Cutler, director of IngramSpark®.

Responding to retailer demand, wholesalers specialize in moving books efficiently within the marketplace, says Eric Kampmann, president and CEO of Midpoint Trade, a full-service book distribution company. A distributor may use a wholesaler to assist with the physical movement of books, but the distributor also works to create demand. A distributor knows the history of a publisher and its titles, marries that to the knowledge of the accounts they’re selling into, and puts the word out about books before the books are even available, Kampmann explains.

Despite the advantages of full-service distribution over wholesale distribution, Upper Access Books publisher Steve Carlson notes that publishers should weigh the ways in which a full-service distribution partnership will affect their overall business model. Inventory needs to be sufficient, he notes, and unit costs need to be low enough to accommodate discounts and ensure that cover prices are competitive in bookstores. Distribution “affects your entire mode of operation—all the choices you make in publishing,” he says.


Finding a Full-Service Distributor

As the saying goes, it takes two to tango, and that’s certainly true of partnerships between publishers and their distributors. But the reality is that although almost anyone can sign up for wholesale distribution, independent publishers may have a hard time finding full-service distribution partners. “To be honest, there are not many full-service trade distributors left,” says Joe Matthews, CEO of the Independent Publishers Group (IPG). “Those that are, like IPG, tend to be highly selective.”

Meeting the minimum requirements set by full-service distributors can be tough, Warner says. “Every distributor is going to have some sort of baseline,” she explains. “Unless you’re super successful, distributors aren’t courting you.” It’s an area in which hybrid publishers have an advantage, she admits, because they can aggregate many titles to meet baseline requirements.

For publishers who aren’t sure whether they qualify for full-service distribution, Warner recommends attending gatherings such as IBPA’s Publishing University (PubU), April 7-8, 2017, in Portland, Oregon, (publishinguniveristy.org) where they can interview distributors and learn about their requirements. In areas where they fall short, Matthews suggests publishers lay out plans for growth with the intention of re-approaching potential distributors a few years down the road.

As part of these plans, publishers should bone up on their understanding of how the marketplace works, suggests Kristen Steele, director of marketing and publisher relations for Bookmasters, which offers full-service distribution in affiliation with wholesaler Baker & Taylor. “Publishers need to understand where their titles fit in the retail landscape, recognize the level of priority one publisher’s list will receive from their distributor as compared to other publishers’ lines with that same distributor, know their competition and consumer, and be prepared to compete for that market with their distributor’s guidance,” she explains.

When the time comes to approach distributors, Kampmann reminds publishers to do so with confidence, noting that he and his staff are “nonprocedural” about many of their partnership decisions. “I always listen to someone with a story to tell and something to offer,” he says. A publisher’s success, knowledge base, and even personality all factor into his decisions.

Publishers should be equally discerning in their choice of distribution partners, Carlson says. As a starting point, he says, a distributor should like your line of books. “If they don’t, they can wreck your business,” he explains. “But a good relationship can result in greatly increased sales to bookstores and even to libraries.”

Expertise and market reach are additional criteria publishers should evaluate when reviewing distribution options, says Steele, adding that a distributor’s scale, the priorities that drive their actions, their key contacts across all market channels, and staff experience should also be considered.


Distribution Terms and Services

Because it sets the foundation for the partnership, the agreement forged between publisher and distributor merits close attention. Before entering a distribution partnership, Warner advises publishers look closely at the fees they’ll owe. “Depending on the publishing model you have, you can really get crushed by fees and returns,” she says.

Matthews warns publishers to beware of a few “gotchas” they may encounter in proposed agreements. “A big one is reporting,” he says. “Publishers should be able to see daily sales and inventory figures, including e-book ‘daily’ reports from the major e-book retailers. You are flying blind if you don’t have sales and orders visibility.”

To accurately track cash flow, IPG’s Matthews recommends contract language that ensures payment based on invoice dates, as opposed to payment when the distributor gets paid. He also suggests that publishers negotiate away as many ancillary fees as possible. “Those nickels and dimes can really add up,” he says. “We try to align our goals with our publishers by only making money when they do, too.”

To reach a mutually beneficial agreement, outside help may be in order. To advise her on negotiating terms with her distribution partner, Warner hired a publishing professional. “You’re opting into a relationship with your distributor and, by extension, with every retailer in the country,” she says. “If you can, take a meeting with their distribution team and know who they are.”

Beyond the specified terms of the agreement, publishers benefit from advice lent by experienced distributors on matters such as book design, competitive pricing, and the timing required to move inventory from the binder to the distributor and then to retailers. “To fully utilize the talent at a distribution company is the aim,” Kampmann says.


Intimate Partners

As with any partnership, full-service distribution is a collaborative venture that benefits from open communication, attention to detail, and a proactive approach to problem solving.

In addition to delivering marketing materials in a timely manner, Warner suggests publishers strengthen their distribution relationships by meeting face-to-face with sales reps and attending sales conferences and pre-sales meetings sponsored by the distributor. “The better they know you and care about your list, the better they can represent you out in the world,” she explains.

Take advantage of opportunities to communicate, Matthews urges. “It always surprises me when some of our clients never call or e-mail, don’t visit us when we exhibit at shows, and don’t attend our Publisher Summit,” he says. “Other clients are in touch with us nearly daily, and that’s what we expect when we are such an intimate partner.”

Like Warner, Matthews emphasizes the value of face-to-face meetings. “Instead of demanding more sales from a distributor, it’s much better to visit the team in person and come up with a real strategy,” he says. “Be willing to take product advice—distributors have the unique vantage point of seeing thousands of titles per year and what’s working and what isn’t.”

By setting clear expectations and goals at the outset, distribution partners can minimize problems, Steele notes. But even so, issues are bound to arise. “It’s inevitable,” she explains, “because book distribution is woven together by so many important details—strict solicitation deadlines, fierce discoverability competition, and timely, accurate metadata—just to name a few.”

The sooner publishers identify potential problems, the better the odds those problems will be successfully resolved. “It’s important to monitor sales, inventory, and order reports at least monthly, and to spend the time to scrutinize and reconcile monthly statements and payments,” Matthews advises. “It can be a real mess if a publisher waits until the week before their fiscal year ends to tie down all of their data. Also, you can catch an inventory problem right away, instead of saying, ‘Where did those three pallets of books go back in 2015?’ At that point, the audit trail has gone cold.”

Matthews notes that it’s also worthwhile to consider what problems are most worth pursuing. By allowing for the occasional glitch, a publisher “builds goodwill with the distributor, who will be more likely to take a risk or try something new with those amicable clients,” he explains.

As a last resort, a publisher can terminate a distribution arrangement, an option that should be spelled out in the initial agreement. But termination can lead to additional challenges, as Carlson discovered when he decided to sever ties with a distributor whose reps didn’t seem to care for his titles or cooperate with promotions. After opting out of the distribution agreement, he discovered his titles had been tagged as “out of print,” and Upper Access lost most of its trade sales for the year.

Matthews acknowledges the worrisome aspects of terminating a distribution agreement. “I think publishers fear that if they tell their distributors that they are unhappy and thinking of leaving, the distributors will be ‘angry’ or somehow biased against selling their books,” he says. But, from his perspective, quite the opposite is true.

“I want to hear right away if something is amiss or expectations are not being met,” Matthews explains. “If someone says they may terminate, I see it as a challenge to make the changes needed to get back on track. We are professionals—publishers come and go all the time. We don’t ever harbor grudges. What we want to do is sell books, even in the last month before the publisher moves somewhere else.”

Happily, Carlson’s Upper Access has moved on to a more satisfactory arrangement. He reports that his new distributor shares galleys with major reviewers, takes advance orders, and facilitates arrangements with major wholesalers and chain stores.


Mutual Satisfaction

As they hone their understanding of options and terms, select appropriate partners, and do their part to ensure a healthy relationship, independent publishers can enjoy the advantages of efficient and timely distribution. By working toward their mutual goals, publisher and distributor alike enjoy the satisfaction of connecting books with readers—and enhancing their bottom lines.


Deb Vanasse is co-founder of 49 Writers and founder of the author co-op Running Fox Books. She is the author of 17 books. Among her most recent are Write Your Best Book, a practical guide to writing books that rise above the rest, and What Every Author Should Know, a comprehensive guide to book publishing and promotion, as well as Wealth Woman: Kate Carmack and the Klondike Race for Gold.

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