Not Considering Volume & Velocity
Should you print a large or small number of books initially? The answer is, it depends. There are two factors that should be considered when deciding upon the optimum inventory level: volume and velocity.
Volume is related to the quantity of books you have in the distribution network and also on hand, ready to ship in response to significant promotional success. Having too many or too few books in stock can negatively impact your profitability.
A strategy of printing a small quantity of books initially will lower your printing expenditure as well as your carrying costs. There is also less likelihood of having to remainder excess inventory. On the other hand, a short print run will increase your unit costs and reduce your profitability. There is also the opportunity cost of not having enough books on hand to meet demand.
For example, suppose your author appears on a major national television show, stimulating considerable awareness of his or her title. If you do not have books on the retail shelves at that time, it is unlikely that people will return later to buy them. Many of the books you print and ship after their interest wanes will be returned.
Conversely, you could arrange a large first print run, ensuring sufficient stock and lowering the unit cost. However, this requires a more substantial initial investment and increases your carrying costs with no guarantee of a major media event that will stimulate sales. Here, the associated opportunity cost is that of money tied up in inventory that could be used for promotion.
Determining the optimum volume of books to print is a function of forecasting potential sales. While this is as much an art as it is a science, a likely minimum print run would be the quantity at which you would break even plus a quantity reflecting the impact of your promotional efforts. For example, if the list price is $14.95 and you intend to sell the books through a wholesaler with a 55% discount, then your unit net income is $6.73 (45% of $14.95). If your production cost is $10,000, then the break-even quantity is almost 1,500 books.
Next, calculate the number of books necessary to fill the distribution pipeline, to fulfill those sold through pre-publication marketing, and to provide a reasonable inventory to meet expected demand. The critical variable in this equation is expected demand. Independent publishers are fundamentally optimistic when predicting potential sales; but in this case, conservatism should be the guiding principle. Your initial print quantity becomes your best estimate of potential sales over the title’s break-even point.
The concept of velocity refers to the rapidity with which books move through the pipeline from inventory to the consumer. There are two factors that control the speed of this journey: pre-publication publicity and momentum. Pre-publication publicity can be garnered through reviews, celebrity endorsements, and media attention. Momentum results from your ability to build upon the buzz previously created.
Creating a successful buzz is related less to the amount of your promotional budget and more to the way your communication program is implemented. Heavy promotion to the wrong target market will have little impact on sales. Communicating the wrong message to the right audience will increase sales minimally. Improper execution of the proper strategy will have only a slight positive effect. The best way to increase the velocity of your books is to communicate an informative and motivating message to a select group of customers.
More Is Better
Some publishers believe the key to increased income and profits is to publish more titles. However, the quest for a revolving front list can actually limit your profitability as its creation and maintenance depletes your limited resources of time, energy, creativity, attitude, and money. Substantial net income depends upon your ability to maintain a topical frontlist while you continue to market your backlist aggressively.
So what is a publisher to do? The answer is found in the difference between the words book and title. Authors create titles that are published as physical books. Publishers make money when people buy books, so the key is increasing the number of books sold, not titles created.
The current practice of introducing new titles two or three times every year forces your prior frontlist titles to be relegated into ambiguity. Perhaps a more effective strategy would be to balance your product line so a healthy list of solid performers infuses cash that can be used to develop and promote a lean, yet strong frontlist.
Evaluate your complete list of titles, and then devote your attention to marketing those with the greatest potential. One way to accomplish this is to reduce your reliance on bookstore sales and seek nontraditional (special) sales opportunities such as selling to schools, colleges, hospitals, corporations, and/or associations. These groups might purchase the books for resale, as premiums, or as gifts for customers.
You can also revitalize a languishing title by creating a new cover design and internal layout for it. Or line extensions may offer the solution. The opposite of extending your line is to simplify and prune it, eliminating low-volume titles that undermine the profitability of the entire line.
The key is to balance the attention you place on marketing your frontlist of potential stars as well as your backlist of solid titles. Stop thinking of titles as individual publications but as bricks in the foundation of your future business.
As NASA scientists prepare to blast a rocket into space, they flawlessly complete a pre-launch checklist to ensure the craft’s ability to succeed. If conditions are unacceptable, the launch is postponed. A decision to abort the mission usually results in considerable aggravation as well as a loss of time and money, but the mission’s ultimate success is more secure if the launch is delayed.
Publishers can learn a valuable lesson from this scenario. They, too, must complete a pre-publication checklist and be prepared to delay the introduction of a title if certain conditions point to possible failure.
One of these red flags is the rush to release a title to meet artificial time limits such as the deadline for a distributor’s catalog or the start of a specific shopping period. These externally imposed pressures do not permit the publishing process to unfold naturally.
Once the need for a title is discovered, it takes time to perform all the steps necessary to bring it to fruition. Submitting galleys for reviews or to book clubs must be done months before the publication date. The process of arranging celebrity endorsements, rights’ sales, distribution, and pre-publication publicity must be allowed to run its course so that each detail is resolved before the title is released. Of course, there are circumstances that require a quick response such as books on new computer software that might be obsolete if delayed six months. The point is that you must evaluate the timing of each title’s introduction, allowing time to conduct all the activities requisite for its success.
Publishing a book successfully is not easy. However, the process will be less difficult if you begin with a topic that has proven demand, create a plan for success, and then communicate the book’s unique point of difference to a targeted, receptive audience. Adequately forecast the title’s most likely sales volume and promote it early and often. Give it the time and attention it needs to prosper and do not be too quick to replace the book with a new title. Do not yield to artificial pressures that can subvert the process, force shortcuts, and result in decreased sales. Make the time to take your time, focus on the opportunity and not the process, and the results will be extraordinarily superior to that which you have achieved in the past.
Brian Jud is a book-marketing consultant and author/producer of the video program, “You’re On The Air” and its two companion guides, “Perpetual Promotion” and “It’s Show Time.” Contact Jud at firstname.lastname@example.org or PO Box 715, Avon, Connecticut 06001; phone 860/276-2452; fax 860/276-2453. You’ll find his Web site at http://www.strongbooks.com.