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21st-Century Physical Book Distribution: Part 2

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Linda Carlson writes for IBPA’s Independent magazine from Seattle, Washington. She can be reached at linda@ibpa-online.org.

As Part 1 of this series pointed out in the May 2013 Independent, your decisions about how to get books from press to prospective readers can determine how, where, and even if your books sell. That article examined the three options publishers of traditional printed books have: sell direct; self-distribute to wholesalers (often combining that with some direct sales); and sell through a distributor.

Carlson_July_1This month, both publishers who work with distributors and distributors themselves offer advice that will be valuable whether you’re getting started in publishing or considering a change from self-distribution.

Working with a Distributor

If you’d like to work with a distributor here’s what several IBPA members recommend.

Research distributors to determine which ones handle books like yours.

A few minutes with an Internet search engine will show you that some distributors specialize in a particular area—gay and lesbian titles, for example, or African-American books, or literary fiction. Others represent broader categories. Some are not interested in inquiries from single-title publishers or inquiries about print-on-demand books.

When you have compiled a short list of companies to consider, and reviewed their Websites carefully, contact selected publishers and booksellers and the distributors themselves for information that will help you evaluate them

Ask publishers listed as long-term clients of each distributor “how the distributor treats them after the honeymoon love-fest is over,” Peter Goodman at Stone Bridge Press recommends. His Berkeley, CA, company uses Consortium for its 120 titles.

Ask publishers of books similar to yours who use other distributors whether they ever considered the distributors you’re researching. They may be able to help you make many comparisons, including comparisons of market penetration. “You want to know which markets a distributor is strongest in,” advises Tom Doherty, president of the Indianapolis-based book distributor Cardinal Publishers Group.

“Call your local independent and chain bookstores and find out if they carry the books handled by the distributors you’re considering,” says Amy Collins, a partner in New Shelves Distribution in Troy, NY. Adds Goodman: “With fewer bookstores now and Amazon dominating the marketplace, particularly for indie presses and niche areas, a distributor may have great ties to the indie booksellers, but find out how it does with Barnes & Noble, Amazon, and (for digital) Apple.”

Collins also recommends asking each distributor exactly what it does for its publisher clients. “There are good and not-so-good distributors,” she points out. “The good ones keep the books in their warehouses, send reps to bookstores to present books to buyers, take orders, ship books, negotiate the cost, bill the stores, and, after taking their cut, hand over profits to the publisher. When possible, the reps who sold the books will give the publisher feedback regarding the reaction to the books.”

What Collins calls “not-so-good distributors” simply warehouse a publisher’s books and wait for a bookseller to order them. “Once the order comes in, they will ship, bill, and handle the accounting,” she notes, “but there will be no follow-up, no creativity or marketplace-driven marketing or feedback.”

Implicit in her comments and those of publishers: Some of the “not-so-good” distributors may have cash-flow problems, which can translate to tardy payments to you. Worse, occasionally some go bankrupt. Asking for bank references or spending money on a credit check might be a good idea.

Find out what information on your titles distributors will require.

Check distributors’ Websites for the dozens of pieces of metadata they need. Besides title, author and illustrator information, ISBN, publication date, page count, and number of illustrations and photographs, you’ll be required to provide such information as type of binding and packaging, run time for audio books, and specifics of marketing campaigns, funds available for co-op advertising, and existing restrictions on distribution rights.

Also, you’ll need to be prepared to discuss recent sales trends of published titles, and projected sales for new titles.

When you begin discussions with potential distribution partners, ask detailed questions about systems, discounts, fees, chargebacks, and payment schedules.

Check the distributor’s reporting system. As Terry Nantier of the Manhattan-based NBM Publishing explains, “It’s easiest if you use the distributor’s setup as is, adapting your systems to that.” And, he adds, be sure you understand what a system requires of you before you make a commitment.

Look at everything that will affect your earnings. In some cases, for example, a distributor may need to allow wholesalers and/or Amazon a greater discount from retail than you had negotiated. (Of course, it’s also true that a distributor may have better terms than you do, and that it has relationships with wholesalers and online retailers that you may have been unable to establish.)

“Look at all the chargebacks, handling charges, Ingram catalog fees, and especially provisions for Amazon.com co-op advertising, which are nonnegotiable,” Goodman says. “And make sure it’s the distributor on the hook for bad debt, not you.” Collins agrees. Although some distributors are very selective and represent only titles that they believe will sell well, “other distributors are not picky: they will take almost any book, but they charge more, and there are often a number of additional fees,” she says.

Study what each service costs, Lin Pardey of Pardey Books advises, especially if you are a small publisher accustomed to handling some problems in-house: “We had to pay 25 cents a copy to sticker 400 books when we made an error.” Other publishers report similar expenses, especially when a back cover barcode on books shipped directly from printer to distributor lacks some necessary data.

If a title has sold poorly for you, don’t assume that a distributor can dramatically improve sales. Find out what level of sales the distributor requires to keep representing a title. Sales below that level will mean that all copies are returned to you—at your cost.

Remember that the distributor’s cut is sizable. As a general rule, says Doherty, you need to determine whether you’ll be profitable if your average take is 35 percent of cover price for titles sold through a distributor.

Do cash flow projections based on the distributor’s payment schedule.

Goodman points out that some distributors pay 60 to 120 days after a book is sold. “Can your cash flow afford this?” he asks. He also recommends that you determine how you’ll handle inventory in excess of what the distributor will warehouse. If you are retaining markets not exclusive to the distributor, you may still need a warehouse or fulfillment service.

Factor returns in.

Get an estimate of the likely returns percentage. Especially if you adjust orders from Ingram or other wholesalers to prevent what you consider excessive returns, you’ll need to recognize that a distributor’s more aggressive selling and complete fulfillment of orders may result in more books going out—and more coming back. Although Pardey Books switched to Midpoint Trade Books partly in hope of lowering returns, the change actually increased them. “That’s because Midpoint got so many of the titles into larger chains,” Pardey reports. “It got 400 to 600 copies of each new title on the shelves of Barnes & Noble.”

Publishers selling hardbound books should find out whether the distributor can replace damaged dust covers to put returned books back in stock. Pardey Books pays a quarter as a restocking charge for each returned copy, but most of the returns can be restocked, Pardey says. “We can ask that damaged books be returned to us, but so far there have only been about two dozen a year.”

Returns may mean that a publisher loses money with a distributor. One single-title IBPA member says, “I saw returns from wholesalers occurring on the same day as shipments went out for the same item. My distributor explained this is a routine way for the wholesaler to delay paying invoices. The distributor I use benefits threefold: it charges for the initial order fulfillment, then charges a returns processing fee, and then a new order fulfillment fee. There’s no incentive for it to discourage returns.”

Ask about e-books.

Even if you’re not selling digital books now, find out what the distributor offers in terms of conversion services and digital distribution, and what digital formats are covered by your contract.

For example, says Goodman, ask:

  • How many channels does this distributor serve?
  • How restrictive is the contract regarding other channels and the growing market for apps?
  • Can you retain e-book rights?

You may find that you can continue to self-distribute only PDFs or publications without ISBNs sold from your Website.

Remember that you are responsible for promoting your titles.

“The distributor’s job is to convince bookstore buyers to give your title a chance. Your job is to promote it and get folks asking for the book,” says Pardey. “It’s up to you to ensure that the books sell through.”

Collins echoes the observation: “Nothing replaces a publisher’s drive and efforts. A distributor is often as good or as bad as the relationship between the publisher and the distributor. If you are not out there pushing your book to the press and new media, creating a demand for your distributor to work with, it will not keep you for long.”

At Partners Publishing Group (the distribution unit of wholesaler Partners Book Distributing), vendor relations director Sara Speigel also emphasizes this point: “We’ve had several publishers with unrealistic expectations regarding marketing. We do some marketing through IBPA and ABA and through our wholesale and retail clients, but we don’t market to the public. We are not publicists, and we do not set up book signings. These are the kinds of promotions we expect publishers to continue when they start working with us.”

With this in mind when you consider distribution options, determine what promotional tools you can continue to use. If you’re switching from self-distribution, you may lose the ability to do traditional promotions such as package stuffers, because warehouses that handle thousands of books daily may not be equipped to insert catalogs or promotional flyers in orders.

You are also likely to lose the ability to send autographed copies on request, because distributors’ warehouses aren’t generally equipped to store, inventory, and pack such specially marked copies separately.

If you’re accustomed to using promotion codes with special offers (“Half-off,” “Free shipping,” and such), ask the distributor if its system will accommodate them and if you can receive sales reports showing which codes were used on which titles.

Another question to ask: How much notice does the distributor need for promotions? Especially if you’ve been self-distributing, you may be used to launching promotions overnight to take advantage of media coverage or to quickly invigorate sales of a slow-moving title. But a distributor’s sales reps may not be able to notify all their customers quickly about a special promotion, which means you’ll have to do more advance planning.

Take advantage of your distributor’s expertise.

“Create a good relationship with your distributor. Keep its staff in the loop as you work on new titles. These are highly trained salespeople, and they can often spot a cover or title that will not work,” says Pardey. Collins agrees: “Be willing to listen to the professional. Distributors, retailers, publicists, and book shepherds make their living selling books. If they give you advice regarding your book, take it. It may mean the difference between selling a ton or none.” In those situations when a book is not selling well, “the distributor’s feedback can teach you about the changes necessary with the next print run to improve a book’s saleability.”

Distributors Defined

The book distributor is an optional, although increasingly important, intermediary between the publisher and the wholesaler. Most distributors also sell directly to retailers.

A distributor warehouses books and publishes a catalog describing its clients’ titles. It probably has in-house as well as independent commissioned sales representatives, and often has reps that work with specialty markets such as gift stores.

A distributor relationship is usually exclusive: the contract may allow a publisher to sell to some specialty or foreign markets and/or to solicit orders on its Website and at authors’ appearances, but it will not allow the publisher to compete with the distributor in selling to bookstores, schools, and libraries.

Some distributors are small—one publisher promoting similar books by other smaller publishers, for example. Others are huge and have extensive relationships with book, gift, and other sales reps.

A distributor’s fees can be as simple as a percentage of all sales generated for a publisher—for example, 25 percent of the sales it invoices. Or the fees may be broken down by services provided: so much for storage of books, so much for each order fulfilled, so much for each copy returned to inventory. Whatever the fee structure, what the distributor charges has the potential to eat up a huge percentage of your sales revenue.

Tips from Two Distributors

What specifics should you focus on when you’re querying prospective distributors? Here’s some advice, courtesy of Amy Collins (who runs New Shelves, a Troy, NY, company that distributes print-on-demand and traditionally printed books) and Sara Speigel (vendor relations director of Partners Publishers Group, the distribution arm of wholesaler Publishers Book Distributing).

Collins recommends asking questions such as these:

  • What is the length of the initial commitment? What is the contract cancellation process? Are any fees involved with ending this distribution agreement?
  • What set-up/cataloging fees would I be charged if you accepted my company as a client?
  • What percentage of net sales do you take as your distribution fee?
  • What additional monthly charges might I incur for services such as warehousing, order fulfillment, returns processing, or administration?
  • How much notice of a release date do you need to get a title into the appropriate wholesaler and retailer databases and otherwise properly launch the title?
  • How long have you been in the distribution business?
  • How many clients do you distribute for? This is an important question if the distributor’s Website does not list publisher clients.
  • How many titles/products do you distribute? What genres/categories are these? As above, it’s important to ask for this information if it is not available on the distributor’s site.
  • How many sales reps does your company have? Are they in-house? Commission-only? A combination?
  • Do you offer POD distribution?
  • What is the turnaround time for processing orders and returns?
  • What reports do you provide on shipping, returns, sales, and inventory, and what is the schedule for sending them?
  • What access to marketing and advertising opportunities with wholesalers, retailers, and/or consumers would I have as a client?
  • How do your promotion and sales efforts for backlist titles compare to those for frontlist?

Getting a good distributor to take you on may not be easy, Collins points out. Although “every successful publisher increases a distributor’s reputation, an unsuccessful publisher can do the opposite.”

You will increase your chances of acceptance by a distributor if you:

  • Have your books professionally designed. “Packaging is key for all products, including books,” says Collins. Speigel is specific about what Partners cannot accept: poor covers, poor text design, poor choices of fonts, no title on the book’s spine.
  • Have your books professionally edited. “Make your book the best it can be from a content standpoint,” Collins says.
  • Provide the potential distributor with a detailed marketing plan for each title, including a budget for marketing and publicity. “We see so many submissions from publishers/authors who do not have a plan to let their target audience know the books exist,” Collins says. Speigel’s experience is the same, and she notes that some small publishers spend so much producing their titles that their budgets for marketing and distribution are inadequate or simply nonexistent.
  • Make sure your books are appropriate for their target audience(s). For example, children’s books shouldn’t have too much text, Speigel says.
  • Create a brutally realistic appraisal of published titles on your topic, noting how your book is different and better. Literary agents often ask authors of new books to survey comparable titles and provide detailed information on their publication dates and prices, their content, and their quality. A similar analysis by a publisher can help persuade a distributor to take the publisher on.

And, obviously, you’ll be better prepared for a successful relationship with a distributor if you have read its contract carefully, and possibly even hired a lawyer to review it with you and suggest points that may be open for negotiation.

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