[Photo caption] A CIROBE scene, complete with attendee checking watch.
[photo credit] Photo courtesy of Helen Raynus.
A Crash Course in Remainders
by Richard Carmen
What can I do with these books? That’s the question my company faced after we published the second edition of one of our more popular medical-scientific titles. Based on the success of the first edition, we projected sales over five years of 10,000, but our guesstimate was too aggressive and optimistic. When the time came to bring out a third edition, we realized that we were going to have a few thousand hardcover and paperback copies of the second left over.
Having had no experience with remainders—after 10 years in business, this was our first overprinting—we decided to attend the largest U.S. remainders event, the Chicago International Remainder & Overstock Book Exposition (CIROBE; cirobe.com), held over three days each October. The cost of attending is low—$25 per person last year for attendees who preregistered, and $40 for those who registered at the door.
Roaming the exposition rooms, I saw about 115 exhibitors, some with only a single six-foot-long table ($1,295 in 2008), some occupying an entire room. I wasn’t quite sure who was selling what to whom, so I asked a couple of remainder moguls who’ve been in the business for decades and who exhibit at many shows each year if they bought products at these shows in addition to selling them.
Jeff Press, president of World Publications Group, called the shows “a great place to network with others in the book industry” and said he’s often offered products by publishers and other remainder dealers in attendance. Marshall Smith, co-founder of CIROBE and owner of Key West Island Books, said something along the same lines: “Most of the vendors who attend buy significant inventory during the show from fellow vendors.”
Since I happened to be peddling a few pallets of my own, I asked both gentlemen about their interest. Declined! But here’s one benefit of attending. Jeff referred me to a New York broker he thought could help me, so I called him, and he offered to contact his dozens of remainder accounts to see if they’d be interested in my books.
Working the Show
According to Chelsea Nash, CIROBE exhibits manager, attendees are usually well diversified. In 2008, attendees came from 21 countries: the United States, Canada, Korea, Australia, Saudi Arabia, India, the U.K., Nigeria, China, Ethiopia, Argentina, Spain, Mexico, Japan, South Africa, Russia, The Netherlands, Grenada, Philippines, Egypt, and Germany. Vendors came from four: the United States, the U.K., Canada, and Germany.
The Directory and Exhibitor Guide is the bible for an event like this. You can read about every exhibitor—titles it publishes, areas of expertise or interest—and note the ones you want to approach. (It’s worth mentioning that at CIROBE in 2008, nonbook items such as CDs, DVDs, audiobooks, and videos accounted for about 15 percent of product inventory.) Traversing the many aisles, you see books piled high on small tables inside exhibitor spaces, inventory items being scrutinized, wheeling and dealing going on, intense handshaking and smiles, and orders being written up.
Most brokers sell in specific categories, such as mass market paperbacks, children’s or academic titles, coffee-table books, Christian books, or cookbooks. The first day—maybe even the first morning—is critical for many attendees. Right out of the starting gate, there was a lot of vying for position to get to certain tables or to nab a rep behind a table before the competition got there.
As I meandered along looking for medical-scientific titles, I often asked vendors if they bought as well as sold and commonly heard “No!” followed by a big laugh. Many weren’t looking to add titles to those they were already trying to sell, and some explained that my niche was too narrow for most remainder companies. And yet others were interested, some even interested enough to talk about bidding on a pallet or two. It looked as though you could make a deal if you were in the right place at the right time–not a deal or deals to get rich on, of course, but one that would mean unloading overstock instead of pulping it.
Bidding is commonplace at CIROBE, and most exhibitors are set up for it. They provide a blind bid list for attendees, which means anyone can bid on anything without knowing the competing bids; typically the highest bid wins, and most publishers hope a single buyer will take their entire inventory.
Unit pricing can be bare-bones. To give you an idea, most potential buyers offered me 5 or 10 percent of retail, although one broker said he would pay roughly 20 percent if he liked my inventory; too bad he didn’t.
The buyer typically pays shipping, but even that is negotiable. Which brings up another issue—freight. My company’s books are stored in Arizona. Most remaindering warehouses are in the East or Northeast. Transport costs often turn out to be a deal-breaker, since they may come to $500 per skid. I could see that I needed to find possibilities nearby (which I did, in New Mexico and Colorado).
The buyers at these shows ultimately sell their remainders to brick-and-mortar stores, through the Web, to wholesale outlets, or even direct from warehouses that can easily measure 250,000 square feet. Often, remainder houses represent thousands of titles that retail for 60 to 80 percent off list price.
Mores in This Market
Remainders have proven to be a powerful secondary publishing market. According to Smith, “While it’s impossible to quantify exactly, it’s easily in the hundreds of millions of dollars.”
At CIROBE I learned that relatively unknown authors have built a following with a remaindered title, making consumers eager for their second and third titles to be released as remainders. And I also learned that remaindered books are sometimes rereleased by their publishers, with the result that thousands of copies in the remainder market sell within days or weeks.
Chris Eaton, senior vice-president of purchasing at the American Book Company, reflected on an interesting event. His company had bought 100,000 copies of a hardcover book and sold about 2,000. “We were about to pulp them,” he remembers, when Oprah chose the book for her Book Club. “We would have made a lot of money had the publisher not requested we return them,” Eaton says. “We did so because that’s the relationship you have with a good publisher. They keep us in business, and we help them.” Of course, the publisher repaid ABC for the returned copies.
“A few changes have impacted the remainder business since we started selling,” Jeff Press told me. One change is that “publishers are not printing the massive quantities they did 10 years ago.” Another is “the onset of exclusives, which channel all one publisher’s remainders to one dealer.” The advantage, of course, is that the remainder company’s competition is not likely to gain access to those titles. The risk stems from the fact that when you buy everything, you usually get caught with some titles you don’t want. Press adds that sometimes one vendor will do a trade with another, swapping skids so each can sell more effectively and profitably.
Chris Eaton estimated that more than 50 percent of remainders are sold through exclusives with large houses. But, he added, “There are still many opportunities for nonexclusive sales.”
Before You Go to a Remainder Show
Thinking of attending a remainders exposition? If so, you need to ask yourself some fundamental questions about the books you want to sell.
How many? Many vendors I spoke with said, “That’s all?” when I told them I had about three pallets. Eaton told me, “We regularly do deals in the 1 to 3 million–unit range.”
How old?“Unlike fine wine, books don’t get more valuable with age,” Press says. Eaton thinks remainders may be akin to fish: “They start to smell bad when they get old.” And Press adds, “Publishers vary greatly in the time it takes to remainder a book. Some will pull the plug the same year, while others wait one or two years, or more. Some publishers choose to age their product before offering it on the remainder market.”
I wondered about the lag time from pub date to the need for remaindering. Smith explained, “In the current circumstances, I think you’ll find that most books are delayed at least 12 months from pub date to remainder bid.”
What genre? Eaton told me: “We do well with cookbooks, picture books, children’s books, and big-name authors. But anything political or dated and the 15-minutes-of-fame books won’t sell” (think of Terri: The Truth, about coma victim Terri Schiavo; or books about 9/11).
What do remainder companies do with books that don’t sell? After all, remaindering seems to be the last stop. “No,” Eaton said. “Pulping is the last stop, and that’s what we do with books when they won’t sell. We’ll have 12 to 15 million books at any given time. Sometimes we’ll get 300,000 copies of one title, and if it’s the right title, we can sell all of them.” When a title doesn’t sell, “we get rid of it in 30 to 60 days, because it just takes up space, even though we have about 600,000 square feet of storage available.” Eaton added that American Book Company pulped or donated roughly 4 million pounds of books in 2008.
And so I left CIROBE without making a sale but with some good lessons behind me. One in particular stands out. It might make more sense to do a smaller print run and pay a little more per book than it does to get unit costs down with a larger printing and have to deal with remaindering.
Richard Carmen is publisher at Auricle Ink Publishers, a medical-scientific book-publishing group established in 1997. A research scientist and practicing audiologist, he has written for medical and professional journals and for consumer periodicals including Ladies’ Home Journal and The Saturday Evening Post. He currently serves on the boards of several national organizations including The Better Hearing Institute, and he is editorial advisor to Advance for Audiologists magazine.
Remainders is an umbrella term for books that publishers no longer want for a variety of reasons. The category includes:
hurts (dinged, dented, nicked, or otherwise damaged books)
closeouts (books trending down)
titles declared out of print
overstocks (from overly large printings)
white-sale titles (temporary markdowns)
assortments (mixed problems)
According to CIROBE’s Marshall Smith, a remainder is “a book that’s been sold by the publisher to close it out or reduce inventory (usually in its entirety). It’s safe to assume the publisher feels the chance of selling the inventory in question at a higher price has declined to the point that it’s more profitable to sell the book than warehouse it.”
Remainder Shows: A Selective List
The Spring Show
Las Vegas, NV
Great American Bargain Book Show
Book Expo America
New York, NY in 2009 (BEA has a remainder room)