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An Industry Divided

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Sometimes you find yourself traveling halfway across the world to discuss events that are occurring in your backyard.

Such was the case this year when we met with many US publishers, distributors, and wholesalers at Frankfurt and
the buzz topic was the new Barnes & Noble “Distribution Efficient Receipt Program.”

For those who have not yet received this latest communique from B&N, here’s a brief recap:

  • A title that is substituted for an ordered title without prior approval or is shipped without a purchase order:
    $200 per title fine.
  • A product which is received by B&N later than the expected arrival date printed on the purchase order will experience a fine of $.05 per unit per day from the expected arrival date to receipt date.
  • Product received by B&N earlier than the expected arrival date as agreed upon by vendor & B&N Merchandising (for Trade promotional product; bargain/gift product more than one month early) will experience a fine of $5 per pallet + 1% per cost of merchandise value for every month product is early.
  • Ticketing required on books received without prices. Fine: $.10 per unit.
  • Ticketing required on books received without ISBN barcodes. Fine: $.25 per unit.
  • Incorrect or incomplete order information on cartons and/or pallets OR mixed titles within a carton without approval from B&N Merchandising for case pack quantity orders OR pallets that are not the specified size and/or not
    stretch-wrapped OR incorrect or incomplete packing list information, not affixed to carton OR overages (if rounded up
    to case pack on purchase orders requiring exact quantities) OR overages if quantity received is more than the amount
    ordered (except where casepack rounding is requested): Fine $200 per shipment + $40/hr. for labor.
  • Incorrect bill of lading information: Fine $200 + cost to transfer the product. There are lots of other charges and fines, and they do mention that the first offense will receive a written
    warning but after that the second offense will cost $200, the third $400, the fourth $800, etc., etc., etc., as the
    King of Siam would say.

One of our publishers commented, “I want to write them a letter saying that we will also have an Efficient Receipt
Program, and include a fee schedule for any infractions from the stores, such as: there will be a separate charge to
send B&N duplicate invoices when they don’t pay, plus forty dollars an hour or any increment thereof for time spent; a
fee of five cents per title per day for all payments that are not received within thirty days of sale; a charge of two
hundred plus freight in and out when duplicate orders are received.”

When I asked several of the larger wholesalers and distributors their reaction to this new edict, some stated that
they hadn’t even seen it. After they called home from Frankfurt and had it faxed to them, they just laughed. They
said, “We won’t pay it.”

The dilemma, however, is how does one prevent the payment from occurring, since B&N can automatically deduct the
charges directly from your payments?

While I am sure that there are problems for B&N when they are expecting delivery of a certain title, especially a
bestseller, and it is late in arriving, and when pallets of books arrive too early at a warehouse that is not set up
to receive shipment, this seems to be a rather knee jerk response to what may be a few incidents, which can and should
be handled with the individual publishers and/or distribution centers. To blanklet issue this policy and then not
enforce it would be foolish. To issue it and enforce it on a select basis would be illegal. Unless the B&N Efficient
Receipt Program conditions and fines are printed in each contract, one would assume that this add-on could not
possibly be legally enforced.

There is so little profit margin in book publishing today with the discounts increasing on a yearly basis that
another type of financial burden could place the entire storefront portion of this industry in jeopardy.

Publishers and/or their wholesalers should pay close attention to shipments. But errors occur since we are dealing
with humans, not machines.

It would behoove us all to figure out how to work together rather than tearing an already divided industry further
apart.

Contact the PMA office at <A
HREF=”mailto:pmaonline@aol.com”>pmaonline@aol.com for a copy of a brochure describing the Dispute
Resolution Program. For more information about mediation and arbitration, contact Phil Tamoush at <A
HREF=”mailto:oakwoodpub@juno.com”>oakwoodpub@juno.com.

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