AN IBPA ROUNDTABLE
To find tried-and-true ways to limit, eliminate, or otherwise deal intelligently with returns, we turned to IBPA members, and more than 100 responded.
The reports that appear here are a first installment. More advice about how to deal with returns will be featured in upcoming issues of the Independent.—Judith Appelbaum
A Healthy Setup
Of the almost 2.9 million What to Do for Health books we have shipped in the last nine years, I could put our returns in a wheelbarrow.
Most of our books are sold in large quantities to government agencies, health plans, Head Start, and large health programs. When we sell to bookstores’ central buying offices, we sell nonreturnable.
Some of the larger book distributors place orders for stock and send some of the books back because of damage and age, but this happens very rarely.
Institute for Healthcare Advancement
By the Numbers
The answer for us was really very simple. Of course, it took a while for us to figure it out, but when we did, we were able to greatly limit our returns. Here’s what we did:
After looking at the accounts that consistently returned between 40 and 50 percent of the books they ordered, only to reorder, we stopped shipping books to them. The books they returned were poorly packed, and by the time we received them, most of them were in unsalable condition.
Even after numerous phone calls and conversations regarding this problem, these accounts refused to correct their poor shipping policies.
When we compared how much money we were making on the accounts against how much money we were losing, it became clear that we were better off dropping them. Now that we have stopped shipping to them, we have cut our returns in half. And we have not experienced a drop in revenue. In fact, our sales to our other vendors have grown.
Square One Publishers
What Happens When You Reconceive
For 14 years I have published literature of the American West (not Westerns), much of it my own, some of it by other authors, and I no longer view the high rate of returns as a business disaster. The change came about when I re-reallocated those expenses from Sales to Advertising. You might call it a trick of mind, and budget. Immediately I reduced my efforts to get distributors and book signings in far-flung places. I saw it for what it was: a lower priority in the overall scheme of things.
That doesn’t mean traditional sales are unimportant. Newspaper journalists and many TV and radio interviewers tend to judge novelists as more worthy if their books are available in Borders, Barnes & Noble, and independent stores. So getting titles into those systems matters. It helps boost sales inside and outside the stores.
When the inevitable returns arrive to my warehouse (the former turkey hatchery on our ranch), I say to myself, “Good, my chicks have come home to roost, and only 65 percent came back. The other 35 percent are in the hands of new readers.” Word of mouth has always been my best marketing device. We sell almost all returns, often at a discount but sometimes at full retail.
So for me, at this point in the rapidly changing book industry, the cost of shipping back and forth to distributors is an insignificant expense that still garners significant marketing benefits.
How do I stay in business? In ever-blacker ink? In direct competition with blockbuster novelists? Owning my own warehouse helps by making large print runs possible, thereby reducing the per-unit cost of books. But here’s the biggie. During the last 10 years, I have steadily shifted resources to enlarging my database of direct mail customers.
We get contact information from checks and credit card sales, but mainly from direct sales events. I ask people who come to my table after I have spoken or at special sales events if they want to sign up to receive a postcard when new books become available. Thousands of people have done so. During 2009, when customers asked for the final novel in my California trilogy, I offered free shipping if they prepaid. By January 2010, the preorders came close to paying for a print run of 3,000. I have something of a cult following, and I now have hired a proven publicist to design an online social networking campaign to expand my following into cyberspace. Next will come Kindle, iPad, and audio formatting of all my titles. Those are my priorities for 2010.
We independent publishers are well positioned for what Jason Epstein sees as the inevitable collapse of traditional publishing. I have one foot in both worlds. My lack of concern about returns is a symptom that I am ready to lift the left foot when it no longer provides any support.
Bridge House Books
The Freebie Formula
One tactic that has been successful for us so far in cutting down on returns is offering giveaways with our books. Customers can’t seem to turn down anything free.
When we offer a free small bottle of perfume spritz or body splash, or a scented candle or burner with a book, customers are more than interested. So far, three out of five order and nobody returns (the giveaways are very pleasant).
Better by the Case
Our main book, The Adult Student’s Guide to Survival & Success, 6th edition, is a college textbook. To discourage returns, we offer and promote a no-returns 40 percent discount to bookstores (and everyone else, for the most part) on a case of books, as a choice instead of our usual 20 percent discount. While about 30 percent of our orders are no-return orders, they compose 77 percent of the quantity of books that we sell.
Additionally, for us, a few companies are responsible for most returns. We plan to contact those companies and see what can be done to stop the regular sending of three to five books back and forth in the mail. After a while, they are so box-worn, they become worthless.
For our worst offenders, we emphasize our policy of deducting from their return credit, at our discretion, for damaged, poorly packed books not “re-sellable as new.”
Practical Psychology Press
Happy with a Hard Line
Wow, are people still doing returns? I’ve been doing nonreturnable short discount since 2005 for the books I publish, which are mostly on naval and military topics. It’s the only way that makes sense for small market specialty topics.
W. Frederick Zimmerman
Nimble Books LLC
Tradeoffs That Pay Off
Dogwise has a very low return rate from Ingram and B&T, but we do get returns, and sometimes the copies look like they were put through a shredder! We willingly accept inconveniences like returns and damaged copies because the wholesalers sell lots of books for us. They are doing what we can’t do: making the book easily available to book buyers around the country.
For all other wholesale buyers, we sell on a nonreturnable basis (defective copies excepted). This policy is noted in all our wholesale purchasing information, and we haven’t had complaints. We make it easy for wholesale buyers to get a 50 percent discount on 51 copies, mixed titles included, and that may help make them agreeable to the nonreturnable terms.
Safe and Satisfied
We do not allow book returns unless there is a printing issue. We keep prices low and do not encourage purchases over the amount we believe we/purchasers can sell.
It is scary that major bookstores demand unlimited purchasing power with unlimited returns. I know of one publishing company that had huge amounts of orders, was not paid for the books, and then had books returned, leaving the publisher holding the bag for the whole experiment. This is unfair and irresponsible on the part of the purchaser, and so we just do not buy into it.
If a bookseller wants your books badly enough, the bookseller will buy them on your terms. It may take longer to stock the stores, but it is safer, and it is not good to grow too fast—things get out of hand way too quickly.
Penny D. Weigand
Bellissima Publishing, LLC
Doing Well with a Discount
Our returns have historically been very, very low–like 0.04 percent. This may be because our main market is homeschoolers and homeschooler suppliers, and we offer a discount on nonreturnable sales. Many of our wholesale customers take advantage of the discount when they buy.
Even now that we have NBN doing distribution for us, and reaching wider markets, our returns rate is still low—about 1 percent.
Lost Classics Book Company
Depending on the customer, three policies have worked well for us.
When a chain returns a book or two by unauthorized COD, I refuse delivery, don’t respond, and never hear about it again.
A large Web site that buys in bulk gets the standard wholesale discount of 55 percent with an additional 3 percent for nonreturnable status. Full payment is due on delivery. That plan has been mutually satisfactory for years.
A new retail account just asked what my drop-ship terms are, and I said, very matter-of-fact, 40 percent discount/nonreturnable. Except for the biggest wholesalers, buyers have been perfectly amenable to those terms.
Linda C. Senn
Pen Central Communications
Managing Channel and Format
At Perspectives Press Inc., we take two approaches to controlling returns (which we find to be highest from college stores).
First, when we sell in bulk directly to customers—either bookstores or companies within our niche (challenged family building and its alternatives)—we sell only nonreturnable. Customers who want returnability must go through Ingram. Amazon is happy to buy nonreturnable.
Second, we decided several years ago to deal better with returns by printing only hardcover books and reissuing titles in e-book format, but not in paperback. We did this because we had found over nearly 30 years that when returns do come from Ingram, the problem in an inordinately high percentage of cases is just a scuffed cover. Paperbacks can’t be recovered easily, but hardcovers can be rejacketed and recirculated.
The result is a returns rate that is quite low. Most of the paperback returns that we do get can be sold in bulk through our Bargain Bin to professionals within our niche.
Patricia Irwin Johnston
Copies Stay in Schools
I’ve never had a return, with close to 3,000 books sold. That’s probably because most of my sales are made during author visits in schools, so buyers have essentially signed on before buying with advance book orders.
The Well Bred Book
Make Mine a Mix
The only significant numbers of returns are from trade sales. Therefore, I put a lot of effort into nontrade sales. There are virtually no returns from direct sales, special sales to businesses, back-of-the-room at authors’ speaking engagements, and even sales through nonbookstore retail outlets. These add up to more business than my trade sales, so they greatly reduce the overall percentage of returns.
However, I haven’t given up on trade sales. When a new title comes out, I encourage my distributor to place it in as many stores as possible. Of course, that is a risky proposition. Thousands of books are placed in stores, and any of them that don’t sell within a matter of months will be returned.
If my early publicity is successful, there won’t be many books coming back. But if early publicity fails—and once in a while it does—a big percentage comes back. I could reduce that risk by telling my distributor to place the book in fewer stores. But I’m willing to take the risk because having more books in stores helps overall sales, and the returns are a cost of doing business. Once a title has been out for a while, bookstores reorder only as many as they figure they can sell.
I can always sell the scuffed returns, one way or another. I offer them at a discount on my Web site, and I find that most of my Web customers prefer to save a few dollars in exchange for getting a book with a scuffed cover. I also sell returns via Amazon Marketplace and a few less prominent venues. I have quite a bit of storage space, so I never shred the scuffed books (except the ones that are severely damaged). They all sell eventually, at prices that significantly exceed production cost.
Upper Access, Inc., Book Publishers
Authors in the Equation
Returns are the bane of the industry, as far as I’m concerned, far more than exorbitant discounts or anything else. They take the responsibility for making well-judged orders away from booksellers and set up many small presses for a fall.
For the most part, I have made the books I place into distribution nonreturnable. I am perfectly willing to make agreements with individual booksellers regarding returns, thereby controlling how many books ordered can be returned, the time period during which they may be returned, the condition they must be in when they are returned, and so on.
A couple of my authors have felt so strongly that they wanted their books to be returnable via distribution that they contractually agreed to be responsible for all the financial burden of any returns, and they get possession of the returned copies. I explained the risks involved and the possible cost to them, but that’s what they wanted. I suppose that is not eliminating or controlling returns, but it does ameliorate the damage.
I am certain that making books nonreturnable limits the number of booksellers who will order from me. But I am just as certain that making all my books returnable would create a possibly disastrous financial risk that I am unwilling to bear.
Packaging Makes a Difference
Before I started my medical-scientific book publishing business, I had had a long career as a dispensing, research, and clinical audiologist. In this business, hearing aid returns for most practices averaged 20 percent. When I founded my publishing company in 1997, I didn’t quite know what to expect in terms of returns.
As it turned out, my highest book returns occurred during the first year out of the gate, and returns quickly diminished within the second year, to less than 1 percent. The reason for the initially high returns had to do with our learning curve, and more particularly with simple packaging of product. We did not know that if you had a dozen 6″× 9″ titles packed in a 6″× 9″ box, this would spell trouble. We were initially told, “Pack them tight!” So we did.
Most books made it through to buyers unharmed, but much depended on their handling outside our control. It didn’t take long to realize that there are other ways to “pack them tight.” Spending just a little more for bigger boxes and more air space, then insulating well with heavy paper so there would be no movement inside, brought our “ship to” damage to zero. We now pack so well that you could sail a single-wrapped title into a concrete wall from six feet with no damage—literally.
We do get some returns from what we call the Ethers—books that come back, for reasons far beyond our control and often with no explanation, with page-turning wear, sticky retail bookstore labels that leave permanent glue damage if removed, covers marred and worn from being shuffled around on shelves or shipped with poor insulation by distributors.
This said, over the last 10 years, our total return rate has remained well under 1 percent and rarely involves damage caused by us. We have never asked a single distributor to pick up the cost of return postage or damages. However, in some cases, distributors willingly paid return postage anyway.
My dad was a successful sales merchant with his own business, and I’d overhear his discussions about theft of high-end merchandise worth thousands of dollars. As a child I couldn’t understand it, and I once asked him how he could keep a business going like that. He said then what probably remains true for any business today: “Loss is inevitable. If you cannot balance the losses into your business, you’ll be out of business.”
Richard E. Carmen
Auricle Ink Publishers
The One-sentence Solution
This is a simple one-liner, but it won’t work for everyone. The most certain way of eliminating returns is to eliminate bookstores from the distribution landscape. Customers do not return our books; bookstores do.
Gary L. Chefetz