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Controlling Returns, Part 3

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AN IBPA ROUNDTABLE

Controlling Returns, Part 3

Although this is the last installment of our current series about returns, it surely won’t be the last word on the subject as long as returns continue to undermine profits.

Probably, publishers won’t find a way to abolish returns across the board soon (or maybe ever) but, then again, stranger things have happened. And in any event, it’s clear from the reports in all three parts of this series that independent publishers don’t have to knuckle under to the current system. Instead, you can take a variety of steps to keep returns down or even eliminate them entirely for your own business.

Many thanks to all of you who shared the wealth of your experience in this aggravating arena.—Judith Appelbaum

Until the Big Change Comes

I have yet to convince my book distributor to rebel in the book world and say “No Returns!” It simply won’t happen until everyone agrees to this new policy. We can only dream.

I still have bookstores ordering ten in one month, and returning six the next, only to order ten more. This keeps them from having to pay me in a reasonable and timely manner, and I think it is a deceptive practice that we must all fight.

Meanwhile, I use no-returns terms for all the sales I do on my own—to conferences, individuals, and other customers not covered by my distributor. Of course, anything truly damaged or incorrectly shipped can be returned, but for the most part, returns from my own sales are nonexistent.

MaryAnn F. Kohl

Bright Ring Publishing, Inc.

brightring.com

Getting Tough on Terms

White Coat Wisdom came out two years ago, and the first printing is all but gone. Baker & Taylor was an important partner, especially in the first year when it simply ordered books and sold them. We hardly ever got a return. But in year two, the economy sank, and B&T started sending books back.

The most frustrating thing was that B&T would send books back in the morning and reorder later that very same day. The wasted time, cost, and hassle seemed utterly preventable, but B&T was not willing to change. This happened at least three or four times before we said, Enough! Our terms with B&T are now pay in advance and no returns. I simply sent a letter of termination, and B&T asked for new terms. B&T still does order occasionally, and now it pays up front.

Apparently a bookstore in one part of the country may put a book on the shelf for a week or so and if it doesn’t sell, send it back to B&T, which sends it back to the publisher. Simultaneously, another bookstore wants it and orders. B&T apparently won’t restock its own shelves and fulfill from that.

Steve Busalacchi

Apollo’s Voice, LLC

apollosvoice.com

Doing Best in Certain Stores

So far, we’ve not had to deal with returns of our book, Minnie Rose Lovgreen’s Recipe for Raising Chickens. Bookstores that don’t know much about the book tend to order just two or three copies to begin with, if they order at all. But local stores and other stores that understand the book’s usefulness to chicken-raisers tend to order more copies, and end up selling them all.

The book sells in feed stores, garden centers, and gift shops, with no returns. We have an advantage because it is a very practical (though also charming) how-to book for new and experienced chicken-raisers, and their numbers are increasing all over the country. In other words, our book has a built-in, growing market.

Nancy Rekow

NW Trillium Press

nwtrilliumpress.com

An Object Lesson

Early in our history, one of our authors called almost every Barnes &Noble in the United States. Somehow, he convinced stores from all around the country to order two to five copies of his book for placement. And, of course, since he was a local California author, bookstores in Idaho, bookstores on the East Coast, and bookstores everywhere else returned his books.

Now more than ever before, we encourage authors to start strictly local and regional with promotion, as we do. 

Reagan Rothe

Black Rose Writing

blackrosewriting.com

Information from an Index

One way to manage returns is to establish a “returns index” that focuses attention on the subject categories that are most responsible for high return rates. The way to do this is:

1. Calculate the average return rate for your entire line of books (or any individual category). This is your benchmark average, and is delineated as 100.

2. Review each category against the average, by dividing the category

returns percentage by the total returns percentage (using the chart below, for instance, you would divide any category return percentage by 21 percent, the average for the whole line of books) to get an “index” score.

3. Review the results. If a category average is less than 100, then its returns are better than average; if, on the other hand, a category average is over 100, then returns for that category are higher than average and should be reviewed further.

CategorySales $Return $Return %Index

A$225,000$60,00027%130

B$375,000$50,00013%65

C$130,000$20,00015%75

D$25,000$12,00048%233

E$68,000$20,00029%143

F$55,000$20,00036%177

G$12,000$1,0008%41

Total$890,000$183,00021%100

In this example, categories B, C, and G clearly have indexes significantly below the average, which means that this publisher should think about publishing more books in these categories, and especially in categories B and C, because the dollar sales within the categories are high.

At the same time, categories D, E, and F are not doing well. Dollar sales are lower in each category, and returns are significantly higher than the norm.

This simple kind of review—first at the category level and then in terms of individual books within a category—will help you increase your commitment to better categories and reduce your commitment to poorer-performing categories.

Of course, you also need to control activities that have an impact on returns. This means:

• selecting the right books to publish, those with quality that will sell over the long term

• making sure that the number of books on your list and the number of printed units

per title make sense and are conservative

• using your money and your efforts to market the books you publish to maximize the

sell-through

• working with wholesalers and retailers to find creative ways to limit their exposure

and help them sell your books

Tom Woll 

Cross River Publishing Consultants, Inc.

pubconsultants.com

Where Guidebooks Stay Sold

I have been able to minimize book returns by expanding my market beyond bookstores. My company publishes Tourist Town Guides®—regional travel guidebooks that are purchased by hotel gift shops, souvenir shops, and so on. These nonbook-store retail outlets rarely make returns, and I can specify my own strict return policy: They may return a book only during the 30 days after the book shipped.

Dirk Vanderwilt

Channel Lake, Inc.

touristtown.com

About an Experiment

No other manufacturing business allows returns. If your business is clothing, groceries, beverages, games, pharmaceuticals, appliances, cars, music, electronics—you name it—once a store has purchased your product, the store sells it, discounts it as it ages, or accepts a loss.

About a year ago, Barnes & Noble returned 90 percent of an order it placed with us after it selected one of our novels for its Great New Writers Program—and did this as well with a book published by Jill Schoolman’s Archipelago Press. It was a wakeup call that stimulated two changes, making us decide never to try selling our titles to the chains and also planting the seed that one day it would be nice to test nonreturnable terms.

This year, I felt we had the ideal title to try this with—Giving It All Away: The Doris Buffett Story. After all, the chains no longer hold sway. Most consumers go straight to Amazon.com for the best deals. Plus, anything kept out of the chains is a help to the independent bookstores that the chains have helped eviscerate. So we set up a nonreturnable system, in conjunction with Amazon.com, Baker & Taylor, and independent bookstores that order five copies or more. We give them a 60 percent nonreturnable discount, while offering the chains nothing at all.

So far, this experiment is off to a good start, with over 5,000 copies already sold and paid for in advance of publication. And there has been a development: while we didn’t solicit Barnes & Noble or the other chains to stock any of our books (and haven’t for years), we did recently receive an order from B&N for 260 copies of Giving It All Away to be sent to various distribution centers for its brick-and-mortar stores, and we filled this unsolicited nonreturnable order at the same 60 percent discount.

Marty Shepard

Permanent Press

thepermanentpress.com

Small Is Safer

I believe the best way to help control returns is not to oversell. While it does feel good to place a large quantity in the retail/wholesale chain, the glow fades when returns start to pour in.

Realistically evaluating the quantities that go out and being prepared for reorders helps limit returns. Taking advantage of co-op advertising and placement opportunities also helps, of course, to the extent that these things sell the books that are in the stores.

Ken Kaiman

Athena Productions, Inc.

Eleven Tested Tactics

Here’s what we do to control returns:

1. Monitor order quantity. It’s wise to be a bit conservative on shipping quantities when a customer places an order that seems too high. We track the typical or average sales quantity by type of customer and use the information to assess orders, especially orders for particular bookstores and orders for an event.

Years back, we held an event at a Barnes & Noble superstore that ordered 100 copies of our Personal Budget Planner. The store’s location was a “poor demographic” for the book, and it didn’t market the event well. Needless to say, it returned 95 copies. Now, if the ordered quantity seems too high, we call the buyer and ask why. Then we may ask that the buyer consider a smaller quantity, or we may just “partial fill” the order.

2. Require 100 percent prepayment by check or money order on all questionable and all international orders. We don’t accept credit card prepayment on these orders, since the cardholder can dispute the charge. Recently, we have received several emails from people claiming to be “a foreign merchant.” These “merchants” wanted to make a sizable purchase from us to stock their stores. They explained that they needed to use a credit card and also asked us to direct them to our Web store. Clearly a scam. 

3. Include a salable condition clause in our contract. Ours says simply: “Books must be returned in salable condition.” To the extent practical, we enforce the clause. It is difficult to do this in our industry, but it’s worth a try. Years ago, after we had held an event at a Borders store, we received a bunch of books back from one of our wholesalers. How did we know Borders was the culprit? Its stickers were affixed to the covers. When we removed the stickers, the covers were scuffed. We called the wholesaler, but to no avail. It told us to “polish” the cover. Oh, well.

4. Run a credit check before you fill an order. Needless to say, in this economy, many customers are financially strapped. Some are bankrupt. We find that customers that are in a financial bind are more likely to return books to conserve cash, or keep the books and not pay. Evaluate customers’ credit using resources such as Dun & Bradstreet before you ship, and make decisions based on what you discover.

5. Collect deposits when possible. This can be a challenge, but even when you let the customer use a credit card, it is often a way to see whether the customer is serious.

6. Assess the quality of each customer. In our experience, lower quality customers—for example, a startup independent, a new customer, a poor credit, or poor location/business model—are more likely to return books or toss them in the trash. We reject an order if we think the risk of loss is too high. 

7. Send questionable customers to our wholesalers and distributors. They are already set up to handle returns. Hopefully, the wholesalers will reject damaged books they receive.

8. Consult our network of industry peers. Fellow publishers can be a great source of informal references about customers. We float a query whenever we are in doubt.

9. Set a time limit on returns. The industry standard we’ve followed is 90 days, although we’ve seen that timetable change. 

10. Demand payment. We send invoices regularly and call customers’ accounts payable department. If it becomes appropriate, we send collection letters. 

11. Follow our gut. If a sale seems too good to be true, it just may be. 

Eric Gelb

Small Business Advisors, Inc.

SmallBusinessAdvice.com

Wrapping for Resale

As a book printer, I frequently hear my publisher customers complain about returns. Some have us individually shrinkwrap their books, and then they tell their distributors or stores no returned copies will be accepted without the shrinkwrapping intact.

While it may not reduce the number of books sent back, it does go a long way toward assuring they are in good enough condition to sell again. 

Davis Scott

McNaughton & Gunn, Inc.

bookprinters.com

The Pattern with POD

Because we primarily use POD printers such as LSI, Replica Books, CreateSpace, and Lulu, 90 percent of the orders we get from retail booksellers are nonreturnable.

We do offer returnable terms through Replica Books, the POD printing outlet for Baker & Taylor, but there are surprisingly few returns.

Also, we often use POD to customize books for bulk buyers. Naturally, when a book is customized for a special sale, it’s nonreturnable.

As POD and online bookselling overtake old-fashioned bulk printing and

brick-and-mortar bookstore sales, it seems likely that the costly, inefficient, environmentally unfriendly facets of yesterday’s book industry (overprinting, warehousing, overstocking stores, returns, remainders, ad nauseam) will also fade away. At least I hope so.

Looking farther ahead, as e-books continue to set new sales records year after year, they can only serve to move the industry toward a leaner, meaner, greener future, for the benefit of readers, writers, and publishers in the years ahead.

Danny O. Snow

Unlimited Publishing

unlimitedpublishing.com

 

 

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