The first and second installments of our series on fulfillment featured reports from publishers who chose to handle it themselves (January 2004) and from publishers who opted to outsource (February 2004). This time, the focus is on different ways to combine those alternatives plus others. As usual, PMA members don’t feel they have to stick with standard operating procedures. Instead, they’ve designed fulfillment operations to meet the needs of their particular publishing programs. See below to find out if some of their solutions might work for you too.
Why We Chose a Hybrid
Encounter Books began publishing in 2000. We use a hybrid for the back end of our business for a few reasons:
When we didn’t have a backlist track record, distributors didn’t understand our list and weren’t exactly knocking on our door; and we didn’t want our little list to get lost among all the other titles a distributor has to push.
With revenues under $1 million, we believed then, and still believe, that we can do a better job of marketing, sales, and customer service in-house, but it makes sense to contract shipping/warehousing out to a professional fulfillment house with state-of-the-art equipment that passes along to us volume discounts earned from transport carriers.
With manufacturing plants in the Midwest, it didn’t make sense to ship truckloads of inventory to San Francisco, where warehousing rent and labor costs are the highest in the country, and then ship one book out at a time, at the highest postage costs, back across the country, where 64 percent of our customers reside.
So we commissioned a national sales force, set up our local customer service and marketing office, and contracted with Publishers Shipping and Storage Company (PSSC). After researching several Midwestern fulfillment houses, we chose PSSC because it used the same fulfillment software that we used (The Cat’s Pajamas), allowing us to transmit orders electronically; it had a good reputation and a solid Better Business Bureau rating; its rates were affordable; its turnaround was promising; it had years of experience and great volume discounts on shipping; and it was situated within two hours of our manufacturers, our Canadian warehouse, and both river and rail transport to the East Coast docks of our U.K. distributor.
We process all orders in our office and handle customer service, accounts receivable, credit, and collections. PSSC performs only the shipping, receiving, and warehousing functions. We have a dedicated rep there who deals with our complaints and have been very satisfied with their performance. Our error rate averages less than 1 percent per month, although it does go up to 2 percent during busy seasons and on some other occasions (I can always tell when they’ve hired a new picker/packer or shipper).
We probably won’t change this arrangement until we hit $7 million in annual revenues, when we’ll revisit the notion of a distributor.
Web site: www.encounterbooks.com
Staying Strong in Subject-Area Industries
We have a distributor to the book trade that takes inventory on consignment; does sales, fulfillment, billing, and collections; and keeps a percentage of invoice. We are extremely happy with this arrangement. They do a good job, keep returns low, and pay on time. Trade accounts for about 30 percent of our book revenue.
At the same time, we fulfill in-house to specialty retail accounts–some 1,200 to 1,500 of them. Having this account database allows us to cross-market books and magazines, gather invaluable market research, and in general develop strong relationships in our subject-area industries. We have one sales manager, two customer service people, and a three-person warehouse handling this.
It’s working for us.
Web site: www.interweave.com
Teamwork Sends Copies Cross-country
Our books are printed at Central Plains Printing in Winfield, KS, and moved across the street to QP Distribution for storage and fulfillment. Central Plains charges nothing to move them to QP, and QP charges $10 per month for storage.
The arrangement works out well for us because freight to Baltimore, where we are located, would cost hundreds of dollars, and we don’t have a place to store the books. This way, we pay only once to ship the books, either to a buyer or our distributor, and we don’t have to rent storage space here.
QP generally handles our orders for Amazon.com (we sell through its Advantage program). For a typical Amazon order of 25 books, QP charges about $14 for shipping and handling. The process is very simple. When we get an order from Amazon, a PDF file of the purchase order/packing slip is generated and e-mailed to QP, which always ships the first business day the order is received. We’ve been very happy with QP’s service, and it is hard to believe we could do this more cheaply, especially since the books would have to be sent to Baltimore first, unpacked, repacked, and shipped again.
QP also handles our freight shipments to our distributor, Midpoint Trade Books in Kansas City, which ships to, bills, and collects from the large chain stores and charges 28 percent of the net for these services. Midpoint’s Web site allows us to download reports on the movement of our inventory. It is very handy to know at all times who is buying what and how many books are being shipped.
A month after our book The Intelligent Guide to Texas Hold’em Poker was published, I walked into a Borders here in Baltimore and found it on the shelf. The book made it all the way from Kansas, where it was printed, to a bookstore in Baltimore with no handling or intervention on our part. All we had to do was pay for it to be printed and shipped to Kansas City. That is a great saving of time and effort for us.
Intelligent Games Publishing
Web site: www.intelligentpoker.com
Another Publisher as Partner
We mainly work via telecommuting, with freelancers all over the country, and have only a couple of employees in our home town. With no staff, it is necessary to outsource fulfillment, at least until we grow considerably. Our president was personally familiar with the owners of the company we use, the Intrepid Group in Fort Collins, CO, which charges a flat minimum fee per month and approximately 17 percent of sales.
We also needed someone to market our books to the trade, and we found a publisher with a similar mission, republishing old books. We have an arrangement with Applewood Books, and they in turn have an agreement with Consortium Books Sales. Applewood takes 35 percent of sales but handles marketing and fulfillment.
Lost Classics Book Company
Web site: www.lostclassicsbooks.com
Fulfilling for Four
We fulfill orders from four large accounts–one master distributor and three specialty wholesalers. We ship directly to these four firms from the printer, dividing the print run according to their requests. A modicum of books comes to our garage for resupplying between print runs. I do most of the legwork; my partner (daughter) does the accounting. We cross-check, and pinch-hit for, each other.
We’d love to be able to get along without any of the garage warehousing, but most other fulfillment services that we’ve researched are expensive and/or not set up for the kind of service we need–e.g., ship 20 cartons to specialty wholesaler A; four months later, ship five cartons to specialty wholesaler C.
Because we want to stay small and focus our energies on acquisitions, editing, production, and promotion, we also wanted to have a distributor. To find one, we did extensive research in books and in special reports from folks who gather info for independent publishers; we checked distributors’ Web sites (looking especially for a mix of compatible titles); we read PW’s coverage of distributors; and we discussed our short list of five with other publishers who use those firms. Then we approached four with an overview of our program (via e-mail), received requests for more info from two, sent them a physical packet of items requested, and within a couple of weeks were in the signing process with National Book Network, the company that showed the most interest from the start and that was, interestingly, also the company with the publishers and titles we felt were most compatible with ours.
Web site: www.drobson.info/nomad.htm
Ways to Save Time for What Matters Most
I fulfill orders generated by speaking engagements, word-of- mouth, or special promotions and rely on Ingram to fill orders from bookstores and Web sites and on Book Clearing House to handle orders via an 800 number when I get media coverage.
BCH takes credit card orders any time of day, and I have linked my Web site directly to its listing of my book. In return, it takes 35 percent of retail and charges shipping to the buyer. This takes a huge burden off my shoulders and is well worth the cost. Marketing and promoting are so time consuming that I want to
outsource as much as possible.
American Institute for Abundant Living
Web site: www.dietmyths.net
The Cover Brings a Distributor into the Mix
For Winter in Kandahar by Steven E. Wilson we fulfill orders from our Web site (giving customers the opportunity to get signed copies), and Biblio Distribution (a division of NBN) fulfills orders from wholesalers, bookstores, and online booksellers, which account for most of our sales.
We selected Biblio because it is a division of a larger distributor but is geared to the smaller publisher. I think the folks at Biblio fell in love with the cover of Winter in Kandahar when we submitted proofs to them; that convinced them to read it, and then they liked the content. Biblio gives us about 40 percent of the cover price for each book it sells.
Of course, we don’t just wait for the distributor to do the marketing. We have scheduled author tours, radio interviews, and an ad campaign.
Jennifer J. Jackson
Web site: www.hailey-grey-books.com
It’s Better with B&T
We had a distributor for three years because I thought this was the only way to make contact with book buyers. The fact that we had over 20 titles at that time (today we have 35) interested the distributor. However, we got poor results and paid lots of crazy fees–1 cent per book per month on the shelf (which doesn’t sound like much until you have thousands of titles sitting there), required advertising in seasonal catalogs at $500 per page, costs of full-color sell sheets, shipping fees to and from the warehouse, 15 cents per unit for processing and packing when you pull books out (even if they’re still in their original, unopened boxes). And the distributor automatically withheld 65 percent of retail and often charged extra for “stocking deals” when buyers ordered in large quantities.
Since we severed our relationship with the distributor, we have worked directly with Baker &Taylor. The orders come in regularly, and we get a larger return on our investment. We also deal directly with state libraries and schools, which send us purchase orders, and we have no problem fulfilling orders on our own.
Our Internet orders come through 1shoppingcart.com. We keep our titles on shelves in our small warehouse. Pulling them from inventory and slipping them into a box is not extremely time consuming. And since there are times in our busy day when everyone needs to move away from the computer, someone simply steps into the warehouse and handles orders.
Jawbone Publishing Corporation (and My-First-Book.com)
Web site: www.JawbonePublishing.com
It’s Better with Special Markets
We fulfill for orders from the dance market and our Web site, but we use Biblio for the book market, only because dealing with the trade directly is too difficult, and many booksellers won’t buy directly from publishers.
I have an order station set up at my home so orders can be packed and mailed fairly quickly. Initially we hired a fulfillment company but found the cost prohibitive.
We have been fairly dissatisfied with Biblio, although not as dissatisfied as we were with Baker & Taylor and Bookpeople, which we used when we were starting out. We had to chase Bookpeople for eight months for payment (although in light of the fact that they filed for bankruptcy, we feel lucky that we managed to get most of what they owed us). Baker & Taylor did absolutely nothing. We had significant media coverage and had to call them continually because bookstores we followed up with had orsk, d books and never received them. If B&T did not have the books ready to ship, the stores’ computer systems often cancelled the orders. Also they returned books that they then reordered and often returned them long past the supposed date limit, making us feel powerless.
Having spent a considerable portion of our budget marketing to the book trade and found it money wasted, we have turned most of our marketing efforts to other markets, where we have been considerably more successful.
Lindergaff Books, LLC.
Web site: www.dancinggourmet.com
An Anti-Exclusive Arrangement
We handle all aspects of fulfillment of both book and gift orders in-house for our online store. However, we utilize traditional wholesale and distribution channels for the bookstore/bookseller market.
We decided on in-house fulfillment as a cost-effective stepping stone to outsourced order fulfillment. This way you learn a lot about the products, the vendors, the customers, and the business. You also become a more informed customer of outsourcing services.
The author and the illustrator serve as staff for packing, shipping, receiving, etc. We utilize outside specialists when necessary, like accountants and bookkeepers.
The learning is invaluable, and the operations have run smoothly thus far. Starting a company from scratch and watching it grow is great fun.
To get exposure for our books and make them accessible, we work with Baker & Taylor, Amazon, Quality Books, and Partners/West. We carefully selected these companies after calling bookstores to ask about their preferences, and we rejected firms that require exclusivity.
Large companies can move slowly, and some insist on fax or even snail mail instead of electronic communication, but they give you instant credibility and access to customers you wouldn’t have otherwise.
Web site: www.HexagonBlue.com
What Works for Our Titles and 300 Others
All book orders are processed in our office, but only 15 percent are shipped here. We send out books if they are going fairly close by and if we have them in stock (we regularly stock the books we publish, but only some of the 300 other titles that we carry from various publishers).
Most of our shipping has been handled by Intrepid Group in Fort Collins, CO, for the past 10 years. We give it a “10” and have a great working relationship. We send Intrepid invoices and a data file, which it uses for accounting and shipping data. In addition to the titles we carry in our catalog, Intrepid also maintains most of our inventory for books we publish, except for those that are at our distributor’s and those that we keep in-house for promotional use and local shipping. Intrepid bills us monthly.
PGW is our distributor, and it handles our trade distribution but none of our retail business.
Web site: www.bulimia.com
Many Ways to Move Those Books
I fill orders from individuals, bookstores, and wholesalers. I like filling orders from individuals because it keeps me in touch with customers, and I get list price, paid in advance by check. I designed an attractive combination packing list/invoice/shipping label as recommended by Dan Poynter, and it makes the job easy. I use Jiffy bags, charge just enough for shipping to cover my costs, give people the option of Media Mail or Priority Mail, and keep books and mail supplies in the car trunk for quick turnaround. Filling orders from bookstores in the general vicinity is next best, because I just deliver a stack of books whenever I’m in their neighborhoods, no packing necessary. I cover everything from Nevada City to Sacramento this way. I don’t mind mailing 10 or more books to bookstores and small wholesalers at 40 percent off.
Bookstores that wanted me to mail them fewer than 10 books but still take the 40 percent discount were a pain, so I now direct them to Partners/West, which I heard about at a Sacramento Publishers & Authors (a PMA affiliate) meeting. Its terms are straightforward; I followed its normal application procedure and have been with the company since March 2003.
Because I don’t have the staff to handle online and credit card orders when I’m away, I made a deal with a local firm that has an online store. Our Web site has a link to it; I deliver books to the firm directly, and the firm takes it from there. I give it the same 40 percent I give to brick-and-mortar stores.
Web site: www.chateaupublishing.com