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An Update on the PMA/IPG Trade Distribution Progra

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In the spring of 1992, PMA began to offer members the possibility of submitting books to a trade distribution program which the organization operates in conjunction with the Independent Publishers Group. As of the end of November 2000, a little over a million books have been sold through this program for a total value of about $9 million. Returns have averaged 20%. This calendar year, sales will be about 250,000 units for a value of about $2 million.
Approximately 350 titles have been accepted into the program since its inception, which means that the average title has sold about 2,800 copies for a value of $25,000. Averages in this case, however, are not especially helpful. Some titles have performed very well, selling in excess of 20,000 units; others have done poorly with unit sales of less than 1,000. Book picking is hardly an exact science, even when it’s done by people with a lot of experience. (Please see the accompanying sidebar for information about how the program operates.)
Is there still a need for the Trade Distribution Program now that books can be marketed on the Internet? It is certainly a fact that Amazon.com—and the Borders and Barnes & Noble Web sites—will handle almost any title that is published; and that Ingram and Baker & Taylor (the national wholesalers) will stock at least a few copies of almost any title in order to be able to supply the electronic booksellers. (The name of the Web bookselling game is to make available every book that is in print.) And, of course, it is now very easy and cheap for any publishing company to create its own Web site to sell books directly to consumers.
There is, however, a problem with the Web as the sole means of marketing books. That is, only a small fraction of trade book sales are currently made through that channel. Web booksellers account for only 5% of total sales. Overwhelmingly, books are still primarily sold through bookstores, traditional wholesalers, book clubs, price clubs, and catalogs. These customers, and the electronic booksellers as well, can deal with independent publishers much more profitably through a distributor, which is why they either prefer to work with a distributor or else insist on doing so.
Booksellers can deal with independent publishers more profitably through a distributor because the transactional costs—the production or handling of purchase orders, checks, invoices, credits, shipping documents—are about the same for large amounts of money or books as they are for small amounts. Moreover, the major booksellers now use EDI (electronic data interchange) to further reduce these transactional costs, a technology that is not affordable for most small publishers. These factors are only growing in importance as the industry becomes increasingly “wired.”

But in addition to the logistical considerations just described, there is another and more fundamental reason why distributors continue to have an essential role to play. If the name of the game for the Web merchants is inclusiveness—every book in print available all the time—the game for the traditional retailers and wholesalers is selection.
Even the huge superstores have nowhere near enough shelf space to accommodate the 60,000 or so new trade titles published every year, and their buyers do not have the time or the inclination to consider thousands of unsuitable titles in order to find the ones they might wish to stock. Booksellers, therefore, heavily rely on distributors to select the strongest independent press titles and to leave out the weak ones. The distributors who have reliably performed this essential screening process have experienced strong growth; those who have not—Access is only the most recent casualty—have gone out of business.
The PMA/IPG Trade Distribution Program has been successful because the books sold through it are combined for discount, billing, and shipping with all of the other titles handled by IPG, which means that the booksellers who buy them can enjoy the low transactional costs described above. And since the program is highly selective, the booksellers can consider bringing in the titles sold through this program without any concerns as to their quality.
More information about the Trade Distribution Program, and the program’s current book catalog, can be found on the Independent Publishers Group Web site, www.ipgbook.com.


Curt Mathews is the CEO of the Independent Publishers Group.



The Ins & Outs of the Program


The Trade Distribution program was initiated eight years ago to address the problem that booksellers were increasingly unwilling to work directly with small presses, and that the larger and better established distributors would not deal with publishers who had only one title, or just a few titles, in print.
. Here, in brief, is how it works. Twice a year, PMA solicits published titles from its members to be evaluated for possible trade distribution. The deadlines are late January for the fall catalog and late August for the spring catalog. Eligible titles must have been published no more than a year before submission, and must not have been sold to the book trade on a national basis. Sales through the electronic booksellers or limited stocking by the wholesalers do not disqualify a book for this program.
The evaluation is done by a committee of book trade professionals made up of representatives from Barnes & Noble, Borders, Ingram, Baker and Taylor, and an independent bookseller or two. On average, 25 to 30% of the books submitted are selected, but there is no limit to the number that can be accepted.
Publishers whose books are not selected are given an explanation as to why the committee did not think their books would succeed in the trade. This information, while perhaps unwelcome, can point the way to more suitable trade books in the future.
Publishers whose books are selected receive a distribution agreement from the Independent Publishers Group, which they may either accept or decline. Most accept the agreement, and their book or books are included in a catalog called the Small Press Selection. This catalog is produced by IPG and carried by IPG’s 34 reps and its in-house sales staff on their sales calls to the book retailers, chains, wholesalers, book clubs, catalogers, and other trade accounts across the country. Books are kept in backlist so long as the sales continue at a reasonable rate, and publishers who have had a book accepted into the program often make use of it to market future titles.


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