AN IBPA ROUNDTABLE
Controlling Returns, Part 2
As you’ll see, some themes emerge from IBPA members’ responses to questions about controlling returns. Even when they agree on a general level, though, publishers who shared their experiences often came up with novel specific approaches to this persistent problem.
As you’ll also see, the problem seems to be spreading. Apparently, e-books aren’t return-proof after all. If you’ve been getting e-book returns, please let me know at email@example.com. And if you’ve found good ways to deal with them, please explain what you do.
Thanks to all of you who have contributed—and all of you who now will.—Judith Appelbaum
Tried and True Tactics
All Willow Valley Press titles are 100 percent returnable. Paradoxically, we have almost no returns.
•We place our titles mainly in independent bookstores. For us, they have a history of
modest orders. They never order more copies than they can sell.
We don’t expect returns.
•We try to maintain excellent personal relationships with the independent bookstores.
This helps them stay stocked with “just enough” of our titles.
• When we use commissioned reps, we encourage them to sell the “right amount” to
the right store. They know to do this already. Some stores need only a few copies,
and some stores need cases of books. For example, the Japanese American National
Museum has bought cases of our book Dandelion Through the Crack, because it’s
about the Japanese-American internment in World War II. For them,
cases make sense.
•We encourage direct sales through our Web site. Each purchaser is a committed
buyer. We’ve never had an individual return a book.
• Many “unexpected” orders from independent bookstores are probably from single
customers requesting the book. They don’t become returns.
For reasons I can’t explain, Baker & Taylor has never returned a book, and we’ve shipped them quite a few.
Willow Valley Press
Tradeoffs That Pay Off
We work in a very narrow but deep niche—financial education—and we keep returns down by selling most of our books direct to consumers. It may have been a mistake, but when we started publishing we took a long look at our skills and risk profile and concluded:
• We are good publicists and hence capable of generating a buzz.
• We will make most of our book-related money giving speeches and seminars.
• We can repackage our content to make it salable in bulk.
While we probably sold many fewer books by selling mostly direct, we made more money.
Tailoring Terms—and Encountering E-book Returns
I’m happy to offer my two cents’ worth on this subject. BelleBooks has been in business for 10 years and is now enjoying some splashy successes with POD and e-books, so we’re definitely working outside the traditional returns model.
We believe that a balanced publishing list will have both nonreturnable and returnable titles, and we tailor returns terms to each book’s unique risks and assets. For example, we like to start a book by a new author in nonreturnable POD and then switch to returnable once the author begins to build an audience, usually with a second novel.
Our primary focus is on developing quality content and reaching readers directly, not on placing books on the shelves of traditional stores. On returnable books we emphasize a conservative sell-in to the wholesalers, no hype. We are happier to undersell a title than to oversell.
We work hard on the timing of all promotion; we piggyback similar books in major promotions, and we avoid risky publishing months (November and December) when readers are busy and sales of most books are slow.
Strangely enough, our big issue lately has been e-book returns. We’ve done some major promotions via Kindle, with great results, selling lots of e-books. We never realized Amazon allows Kindle folks to return an e-book. It’s one thing for a bookseller to return overstock, quite another to allow readers to decide they don’t want the book after they’ve already acquired it (and quite possibly read it). Our Amazon rep points out that e-book returns are tiny (around 5 percent) compared to returns in the print world, so we’re trying to shrug it off.
Protecting Profits on an Annual Guide
Since our travel guidebooks are strong sellers in bookstores, we have to accept returns as a cost of doing business. However, we are able to keep our trade returns percentage in the 7–12 percent range. There’s no special mystery or magic to this. When you’ve been producing the same annually revised titles year after year, there’s plenty of sales history to refer to.
This means that speculative buying by booksellers and overly optimistic sales projections on our part have been wrung out of the equation. While year-over-year sales growth continues, we can address it in an orderly and informed fashion.
We still need a bit of discipline. If sales do exceed expectations, we have to resist the urge to order a reprint, because the clock continues to tick down toward the release of the next edition. We console ourselves with faster cash flow and a lower returns percentage. Press run adjustments, if justified, are made to the following edition.
Dominique Raccah at Sourcebooks is often quoted as saying, “The last reprint is the most expensive,” and there’s a huge amount of truth to that. Similarly, on an annual title, the last three months of sales are the most expensive. There is still measurable benefit to printing enough books to keep them on store shelves until the next edition arrives, but the benefit is not great, as you guarantee that every older edition that is on the shelf the day the new edition arrives is going to come back to you. You have to know that you’ll sell enough copies in those last months to offset the cost of the inevitable returns.
Even with an early sell-through at the wholesale level, returns have not been totally eliminated. One year, when we substantially underprinted, we were out of stock on the wholesale side in about six months, and high-traffic stores were out of stock by the end of nine months. But we still had a returns rate of about 5 percent.
If the chains transferred inventory between stores (to match surpluses and shortages), that percentage would have been still lower, but that’s not the way they do things. I guess a 5 percent “basement” will have to do!
PassPorter Travel Press
We give an extra 3 percent discount for nonreturnable orders. Many independent bookstores have opted for this. It hasn’t fully eliminated returns, but it has definitely minimized them.
Let’s Lower That Order
The only way I know of to control returns is to try to prevent a buyer from overbuying. If a buyer is new to our company and places an order that I feel is too large based on my experience with our sell-through, I suggest reducing the order, especially if some of it is for backup. The buyer can always increase the order later, once we have some history.
Invariably, the response is positive, as returns cost everybody money and don’t help the buyer’s resume.
Ace Academics, Inc.
The CD Correlation
We have not had one single return of our books since we began the publishing and distribution of Gabby’s Wordspeller & Phonetic Dictionary in February 2008. A variety of reasons may explain this.
We have not conducted a survey to identify specific reasons for it, but we did design our editions based on return premises. Taking note of the market and deciding up front that returns were undesirable, we invested time and money creating a CD accompaniment that, if opened, rendered the book unreturnable. Since we knew that music CDs were not returnable if opened, we reasoned that this condition would also work for us.
The CD was designed as a tutorial that essentially reemphasizes the instructions also outlined in the front matter of the book. We discovered, after the first edition was disbursed, that many people didn’t take the time to read the four simple rules for use in the front matter, which allowed us the alibi we needed to create the CD.
Creating the “return voided if CD has been opened” condition for purchase may have frightened off a few retailers or vendors, or perhaps it was an attraction for them. We truly weren’t interested in the retail market anyway due to the return issues and the bookkeeping nightmare they would entail.
We do get repeat orders without returns and suspect the CD may have even stimulated some purchases by vendors or retailers, but who really knows.
The downside of this? We placed the CD in the back cover of the book. If the cases of books are left stored on top of one another, the weight embosses an imprint of the CD into the front cover of the book underneath it. We lost an average of 120 books per 1,000 this way. Well, we didn’t actually lose them; we simply reduced the price of the damaged copies and offered them to teachers, who are more than willing to pay reduced prices for them. As well, we now shift the cases onto their sides as soon as the shipment arrives, eliminating this weight-pressure issue.
Currently we are developing an expanded version of this resource book that will not be packaged with a CD tutorial. A bigger, more expensive book and without the CD: Will things change, and the beautiful days of foregoing chargebacks come to a close? We’ll report to IBPA if sales patterns do change and we start to get these unwelcome returns.
Making It Personal
I sign all my books and dedicate them to the readers. They don’t return them.
Siren Star Publishing
Choosing—and Adapting to—New Channels
We have not found a way to eliminate returns or, better yet, change the corrosive habits of our industry. We have simply worked harder to sell our products into new channels where returns are not a normal part of business. And we have modified our line to fit the needs of these customers more closely.
This includes offering different types of promotions to encourage a nonreturnable sale, using removable price stickers, and revamping our catalog to blur the difference between frontlist and backlist.
Michael S. Levins
How Limits Help
Schools were the worst for returning books, so I instituted a new policy that no more than half an order of five books or more could be returned. Now, with recession, orders from customers other than bookstores are smaller and returns are less numerous.
I tell bookstores they must order a minimum of five books to get full discount, and can return only two of the five if they do not sell. No returns from bookstores at all since that policy went into effect.
It cut down a bit on sales, but there’s no extra bookkeeping, and the problems of returns have virtually vanished.
Francine L. Trevens
TnT Classic Books
When Associations Want to Buy
I am far more cautious in fulfilling orders from educational associations for conventions and gatherings than I used to be. Even though we seldom get books back from them, I call the person ordering and ask how they calculated the request—and who will be speaking.
Since 90 percent of the time the speaker is one of my authors, and the author usually has a box of the book in question, purchasers and I usually agree that:
• if an association runs short of books, it will fill in with the backup supply each
speaker has (then I adjust so the buyer gets the same discount, and either I replenish
the author’s stock or I repay the author for the copies sold); or
• if an association has books left over, it will sell them through its bookstore, which is
almost always already selling the book.
Because we now sell very few books through bookstores (90 percent of our sales are to niche markets), this has all but eliminated the heinous abuses by the big distributors.
The Role of Wrapping
Unless a publisher states that all sales are final—no returns, no refunds, and no exchanges—returns must be factored into the cost of doing business, and the only viable option is an attempt to minimize them.
Of course, returns can be either in damaged condition or in resalable condition. If damaged, whose fault is it, and what is the recurrence?
We wrap copies individually, pack them in shipping cartons tested at no less than 200 lbs. per square inch (such as those available from ULINE), and cut other, unusable cartons into small pieces that we then use as “walls” around the sides of our shipping cartons, along with packing material for the top and bottom. This procedure works well for us; no one has returned a damaged copy during the last six years.
The few returns we do get are in resalable condition, and mostly from booksellers who add a markup to our suggested retail price.
Steven T. Karris
That’ll Cost You
We charge 10 percent of the wholesale price as a restocking fee if a returned book is not damaged and 50 percent if it is. I also require that we authorize the returns.
Since I can’t afford to destroy the books, I sell them (eventually) as used books on Amazon Marketplace.
Judging from my experience, bookstore chains love to make large displays. As a publisher of a series of humorous gift books, I know which titles tend to sell better, and I have tried to share this information with events coordinators. But they still order 10 or 20 copies of everything before my arrival. In my wildest dreams, I cannot imagine selling 20 copies of Haiku for Poker Players in a single day’s signing. Naturally, there are returns.
Independent stores order more cautiously and have sometimes underestimated demand.
There is a lot to be said for the gift-store model (true also for most nonbook retail stores) where the discount is higher but all sales are final. But I am not holding my breath that the book industry will see the light on this any time soon.
Basho Press, LLC
I am lucky that cruise ship retail stores are my main market, and they are simply not in the position to return books, as it is a customs nightmare for them.
I am slowly expanding ashore, but also with no returns. I no longer work through Baker & Taylor. Instead, I offer bookstores very low prices—$5.50 to $6.50 for a book with a realistic retail price of $16.95.
A Switch from Push to Pull
At Credo House Publishers, we have worked hard to minimize returns, especially over the last two years. We started by thinking differently about “pushing” new products into the market at the time of launch. Instead, we are working with our distributor to “pull” products through retailers by first creating demand.
Our strategy has led us to reduce our print runs in some cases from several thousand to several hundred (which is becoming more affordable all the time) and thus reduce the number of copies going to our distributor in the first place. This means we “right size” the initial order while retaining enough copies in the warehouse to fulfill the occasional bulk order or respond in a timely way when a book begins to catch on.
At the same time, our authors are accepting more responsibility to create demand with media appearances, conferences and seminars, and through their own Web sites and ours. This sends people to stores and prompts them to ask for the book they heard about, even if it’s not on the shelves.
Timothy J. Beals
Credo Communications LLC
We have very few returns because:
• Fortypercent of our book sales are to Amazon, which buys according to demand
and pays when books are sold. When we release a new book, Amazon usually buys
one or two copies to start and increases the order as demand warrants. But recently,
when we released The One Page Business Plan for Women in Businessand we had TV
and radio spots scheduled, it placed an order to support anticipated demand
from the shows.
• Thirtypercent of our book sales are to our licensed consultants, now
numbering almost 500.
•Fifteen percent of our book sales are to Ingram or Baker & Taylor, and returns from
them are minimal, perhaps because we have our printer shrink-wrap our books in
quantities to minimize shipping damage. Most returns are due to very
minor shipping damage.
•The rest of our book sales are to professors, associations, and professional
speakers. These books never come back.
The One Page Business Plan Company
Donations Can Pay Dividends
One of the things we do with returns that can’t be reprocessed back into inventory (and overstocks that won’t sell) is give them to charity. (For publishers based in Hawaii, selling to “remainder” houses doesn’t make sense, since the cost of shipping often outweighs the price they offer, and since most of the publishing here is “regional” and they usually aren’t interested.)
Recently we had a very large overstock of a University of Hawaii football book we published three years ago when its team was undefeated. Then it lost in the Sugar Bowl. Although we sold more than 25,000 copies, we had 10,000 left—too many to sell during the book’s lifetime. So we partnered with the State of Hawaii public library system and donated 3,500 copies for its young adult summer reading program. Every participant will get a free copy of the book, which is unusual in that program because the state has trouble finding that many copies of a single title. The people running the program were ecstatic and gave us some great publicity.
The street value of the books at full retail was over $100,000, and we were able to write off the lowered inventory expenses we were carrying and free up a significant part of our warehouse—definitely win-win.
We also donate returns and overstock to many silent auctions and other charitable events, and we find that giving away books helps establish us as a branded local publisher in Hawaii that cares about the many nonprofits that exist here.
Benjamin “Buddy” Bess
The Bess Press