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PRESIDENT’S REPORT
Ideas for Improving the Bottom Line

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Be
conservative in your first printing.

Too many of us have our precious cash tied up in the form of books gathering
dust in the garage, or in a distributor’s warehouse, or wherever. Don’t make a
decision about the print quantity for a new release until the last possible
moment, and then base your decision on advance orders and what you have good
reasons to believe you can sell in the first year. Above all, do not base your
decisions on optimism. Optimism will motivate you but does not necessarily
translate into sales.

 

Beware
of reprints.
Having made the
crucial decision about print quantity for a new release, beware of reprinting.
A reprint decision is more important than a first printing decision. Too often,
publishers, including me, have sold a first printing quickly, sniffed the aroma
of bestseller in the air, then gotten carried away with the reprint quantity.
And there sits your reprint, tying up sales revenue and possibly profits from
the first printing, as the rate of sale declines and—ouch!—here
come the returns.

 

My worst reprint decision was made
a decade ago (time heals all) about a title by an author whose first book had
been a bestseller. We printed 10,000 copies of the author’s second book to
begin with, and when they sold out quickly, I ordered a 7,000-copy reprint
without batting an eye. Big mistake. After receiving the reprint, we began
seeing returns from the first printing. In all, the returns totaled about 20
percent before we started to see sell-through again. I never would have
reprinted that title if I had been patient and done my homework. (My hat is off
to those of you able to sell nonreturnable.)

 

Convert
to short-run digital editions.
In
our enterprise, when a title’s sales fall to below 1,000 copies per year,
especially if cash is short, the title becomes a candidate for going out of
print. At a little homemade publishing company such as Epicenter Press, making
this decision is difficult. Now, we often consider digital short-run printings
as an alternative to OP. I watched the use of the digital technology for a
while before I dipped my toe in the water, so to speak. Ultimately, the logic
of short-run digital printings was persuasive.

 

Look
for opportunities to raise your prices.
If your title has been in print for several years, consider raising
the list price if you reprint. This is not necessarily a good option, given the
intense competitive pressures that are part of the game in book publishing
today, but it may be. Before changing any price, check with your distributor
and your best customers and research the pricing of new releases similar to
your title. You probably won’t get much encouragement from your distributor,
but that’s okay. Let them try to talk you out of raising the price; then make
up your own mind after analyzing objective market factors.

 

Keep
your overhead down.
This sounds
pretty obvious. But you should justify every single purchase, because the
expense will affect the bottom line. At least once a year, look at all your
fixed costs and cut them if you can. Are you paying for a service that was
valuable two years ago, but has little value today?

 

Make
every marketing dollar count.
It’s
not easy to decide where to spend money for marketing and promotion, and how
much money to spend. I know many of you have had much success. It comes with
time, as you figure out what marketing works and what doesn’t. For my part, I’m
still trying to sort all this out after nearly 20 years in the business. My experience
tells me that most marketing initiatives are questionable in terms of books
sold. My feeling is that paid advertising rarely works for me, and that the
best forms of promotion are giving away review copies—as much to the
trade as to reviewers—and generating free publicity in any way possible.
But it all depends on the nature of your target market. We are all different,
and amazingly so.

 

Look
for discounts.
Whether you’re
dealing with a printer or taking advantage of discounts PMA has negotiated for
its members, look for a better price. You might not get it, but it never hurts
to ask.

 

Protect
your inventory.
Wherever your
inventory is stored, make sure it is insured, and make sure you can get your
books out easily in case of unforeseen financial circumstances.

 

Examine
your financial model critically.

As you grow you might discover, as we did, that sometimes you can make a profit
with fewer rather than more sales.

 

Organize
your numbers.
Many of us started
our publishing companies with an accounting system that consisted of a
checkbook. If you are serious about the business of publishing, set up a tight
accounting system, and create annual revenue and expense budgets.

 

Hedge
your bets.
Don’t bet the farm on
your publishing enterprise. Don’t risk more capital than you can afford to lose
if you are unsuccessful.

 

Don’t
let a bestseller get you off track.

There’s a reason PMA regularly offers seminars for “surviving your success” at
the annual Publishing University. Be careful about reinvesting the windfall
from a bestseller and about expecting to repeat the achievement. Enough said.

 

I welcome your ideas for improving
the bottom line, as well as your comments and ideas for PMA. Contact me at <span
class=95StoneSerifIt>gksturgis@earthlink.net.

 

 

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