AN IBPA ROUNDTABLE
Is Now the Time for No-Returns?
Since the practice of allowing returns was inaugurated decades ago, publishers have seen, to their sorrow, how costly it is in purely financial terms. More recently, publishers and others in our industry have focused on the environmental costs.
With technology in various forms available to help booksellers rationalize orders and respond to demand, perhaps the book business can finally return to no-returns. In any event, IBPA members are experimenting with that alternative and related policies. See below, plus “Returns: Saying No and Coping Otherwise” (September) and “Returns: Tactics for Addressing a Persistent Problem” (October).
Our most successful book is a book on spices. We have sold more than 10,000 copies without promoting it in bookstores, and without any returns.
Only one of our three books has been sold directly to the bookstore market. We indicate in the literature we send all stores that we do not accept returns. Still, we do take books back if a bookstore asks us to, since we don’t want any hard feelings and we can easily resell them. This has worked fairly well, although it is a real pain, especially in terms of accounting.
Our “bookstore book” was a test to see how good a market bookstores would be for us, and we’d try that market again. However, we will not publish a book if the bookstore market is the only market available for that title.
When a book is good and there is an audience for it, I think a no-returns policy is valid. It will make bookstores consider more carefully before they buy. Hopefully, Bob Miller’s experiment at HarperCollins will start a trend that will spread through the entire industry.
Hollyridge uses digital short-run technology as its print method. Initially, we took returns. But as a tiny literary press, with returns running about 25 percent, we were getting killed. After two years, we took a stand. All our books are now nonreturnable.
Our business model works most seamlessly with online bookstores. Brick-and-mortar bookstores usually send special orders. We’re pretty sure the consequence is that we’ve sold fewer books, but we’re not suffering the kind of financial losses we previously saw. The balance sheet comes out on the plus side.
Recently, a Borders store wanted to sell our poetry books at a festival but only if it could order in quantity and return. We said no, which shocked the store. Sorry, Borders, we simply aren’t going to have you transfer all your risk to us, and that’s what making books returnable does.
Why Not Just Do It, Barnes & Noble?
Returns make every publisher the bank for bookstores and even for distributors.
True story: In the ’90s, I was co-owner of a small but very successful press in Berkeley, CA. At one point AMS/Costco purchased 3,000 copies of our bestselling title (it had been on the New York Times paperback list for 52 weeks), held them in its warehouse for weeks, and then returned the whole lot. We had to make an executive decision that we would not do business with AMS/Costco in the future. This decision made our distributor angry, of course, because the distributor made money when books went out and when they came back in for restocking. But we were fighting for our survival, and that one huge return was a serious blow to our small operation.
This incident is an indication of how counterproductive returns can be. During that time Steve Riggio, CEO of Barnes & Noble, stated publicly that we should look for alternatives to the conventional returns policy, and he said it again this past May. Why doesn’t he start with his own company and just do it!
Over my 30 years in trade publishing, I have often cut back on the number of books requested by master distributors, which meant that the distributor had to cut orders from Borders or B&N to have enough copies to go around. They would argue with us continually, but that little fee for fulfillment and returns restocking does make it easy to reject their parsimonious advice.
Today, as the liaison with our master distributor, I have just exercised that right again by limiting how many copies I ship to its warehouse even if the distributor has ordered more. It has a minimal effect, but it does have some effect.
My biggest challenge is to do more POD books (especially as the quality improves) so that we severely limit inventory and thus limit returns even more. Also, I now concentrate on selling books in bulk to organizations before publication date. This effort doesn’t cut down on returns per se, but it does mean that we start off our selling season with hundreds or thousands of books already sold, and sold on a nonreturnable basis. And I’m spending more time trying to sell books online direct to consumers to limit my dependence on bookstores, primarily because I want to limit returns.
Our beloved industry is faltering, and we must find radical solutions to confront current issues. I think retailers have to become more creative about selling books that they would have returned. I was a bookstore manager for four years, so I know how hard it is to do this. But it must be done. If I were running a bookstore today, I would work toward a zero-returns policy to force myself to become more creative about sales and also to wean myself off the use of returns to pay invoices. And I would find a way to bring the Espresso Book Printer (ondemandbooks.com) into my store.
Roy M. Carlisle
The Independent Institute
Laying Down the Law
I’ve had no problem with Ingram, New Leaf, American Wholesale Books (the best!), and Bogart. B&T is a different matter. In fact, after an eight-year relationship, I just went “no return” with it (my books are not POD). Apparently no one in its warehouse washes their hands; returns are so banged up and filthy, they have to be tossed. The no-return policy with B&T should not significantly affect sales to libraries, my primary B&T customers.
I really shouldn’t complain, though, since my return rate is probably about 2 to 3 percent.
Assessing the Impact, Hoping for Change
Returns have become a bigger problem for Pemberley Press since we were taken on by a distributor. When I handled my own distribution, we operated at a modest profit. I accepted only undamaged returns; my fulfillment house notified me about them, and I filed an easy claim with the returning wholesaler. I got overstock returns from Ingram and Baker & Taylor, but since Baker & Taylor, my biggest customer, paid for shipping, the main impact was from delayed payments and restocking fees. I sold books into the chains only when one of my authors was scheduled to appear.
My distributor sells directly to the major chains, and also accepts damaged returns for full credit. I have to pay 10 percent of the sales price on every return as a restocking fee, and since many of the copies are damaged, I also have to absorb the cost of production. This adds up to a considerable loss. The wastefulness of this was brought forcefully home to me when I accompanied one of my authors on a book tour. At a Barnes & Noble signing, she spilled coffee on a stack of 18 books. The CRM told her not to worry, as they would simply be sent back to the publisher, and I realized I would be paying 10 percent for each copy, plus destroying all 18 books.
Because returns on some titles, particularly hardcovers, were quite heavy, I asked the distributor not to push my hardcovers into the chains, and after some discussion it agreed. But I’m afraid that until Random House changes its policy, no one else will for fear of being at a competitive disadvantage.
Over the next few years, Pemberley Press will have to assess the impact of returns on our bottom line. It may be that we cannot afford to continue in this ruinous practice. I do hope the major players in the book industry will do some serious soul-searching about the waste in our industry.
How we all hate returns, and how we all love to gripe about them! Nothing will ever be done about them, though, until the big publishers put their collective footsies down.
With a recession plaguing us, the circumstances that will force them to do so may soon be upon us. Until then, however, I suffer as silently as possible. I use returns to sell at book fairs and when I speak. I rarely have so many that I can’t dispose of them that way. I have had few damaged books returned, and I offer them to people who may be able to spread the word if they like the book, or I donate them to libraries or charity. IBPA members will find a short list of places for giving books away on my Resources for Writers page athowtodoitfrugally.com.
Carolyn Howard Johnson
The Frugal Editor
Keeping the Rate Down to 5 Percent
We have had no more than a 5 percent return rate on any title. We don’t print in large runs, and we tend to sell through initial print runs within two or three years at most, which minimizes our returns. In exchange for an additional discount, our largest independent distributor is not permitted to return books at all. And another sizable section of our market comprises direct sales to customers through our Web site and mail order. There are no returns here either.
South Dakota State Historical Society Press
Pay Now, Keep Later
Starstyle no longer accepts returns. We encourage bookstores and vendors to order appropriate numbers of copies. All books are sold on a prepaid basis only. If we receive returns, no money is credited or returned to the vendor, and the books are donated to Be the Star You Are! 501-c3 charity to increase literacy. The store or vendor can request a receipt for tax purposes. Even Baker & Taylor works with us.
This formula works, and I encourage other IBPA members to adopt it. If some of the big guns are starting no-returns policies, why not independents? If all publishers did this, we’d all be more profitable and able to spend more time running our businesses.
Starstyle® Productions, LLC
Technology to the Rescue?
My biggest problem isn’t with returns from bookstores. It’s with automated returns from wholesalers because the books don’t sell fast enough.
The dream that’s been percolating for the last 5-plus years is that on-demand technology will get to the point, in terms of both quality and cost, where the average bookstore can afford a POD machine; where, in other words, the entire wholesaling/distributing component of the industry will disappear. The question is what to do between then and now.
Today, we’re at the mercy of our wholesalers. Books that develop a consistent sales history (measured in weekly sales) will be held in inventory. Books that are “binge books” (selling 50 to 200 copies once a month on one or two orders) suffer greatly. Outstanding inventory will be returned after 30 days, so we’re constantly cycling new books in and receiving books back (which are damaged and usually good for nothing better than the used-book market).
How are we solving this problem? By developing direct sales channels.
I believe the wholesalers and distributors need to be very, very cautious. As printing technology gets better and cheaper and Internet-based sales of both physical and electronic books increase, it will no longer make sense for any publisher to use them.
We’re planning to bring short-run on-demand manufacturing in-house to minimize our initial investment and increase our direct relationships with the retail outlets instead of depending on wholesalers.
Wind River Publishing
About an Agreement
As a rule, I think they are a holdover from a time when bookstores needed a helping hand, and that they outlived their purpose many years ago.
I do not accept returns across the board. But I did set up a returns agreement for any bookseller who wishes to buy directly from me instead of through a distributor/wholesaler. It provides for the bookseller and me to share the risk of the bookseller’s overestimating the sales of a book. The basic points of the agreement are:
The book order must be prepaid, in advance of shipment.
Books may not be returned before 90 days from date of receipt (to give them sufficient time to sell) and may not be returned after 150 days from date of receipt.
No more than 50 percent of the last ordered quantity of any title may be returned.
Shipping for any returned books is paid by the bookseller (media rate is fine).
Books returned must be in good, resalable condition—not shopworn, not wrinkled, and not signed. If a book is signed or marked in any way, the bookseller keeps it.
Books are returned for credit, not cash refund. The credit will be issued within 30 days for any books that are returned in good, resalable condition.
Book orders/returns for specific signing engagements may be negotiated.
I believe this is a reasonable document. And I didn’t always have that first point, but I was burned a couple of times, so I added it.
The truth is, I haven’t had that many booksellers to sign on, but I haven’t had any booksellers complain about nonreturnability, either.
I hope that the fight against returns is successful, but I’m not sanguine about it. The bigger publishers seem to be perpetuating it with huge first print runs. I have a friend who works in the remainders business, and he loves to hear about it when a book tanks because it means he may be able to get the book at pennies on the dollar and resell it later to Kroger or WalMart for their bargain-books tables. Problem is, authors see none of that money and publishers see very little. It’s sad and unfair.
I’m not unsympathetic to the problems booksellers face. They are in a difficult position, but then again so is just about every retail business these days. My father was in the restaurant business for years. You gamble on how many customers you will have, who will order what entrees, and more. If you underbuy, you simply stop selling that entree for the night. If you overbuy, you often end up tossing out that ingredient or whatever, especially with fresh vegetables and meats.
But my father learned his customers’ likes and dislikes and the patterns of food popularity, and he did very well. Sometimes he bought something to see how it did (one notable experiment being quail) and it just didn’t go over. When that happened, he shrugged and went on to something else. He didn’t whine about wanting to return a gross of quail just because nobody wanted them. He ran a special on quail and at least made back some of what he originally spent. Such an event was a rarity, though, because he knew his customers and what they wanted. That’s what a good businessperson does.
Wolfmont LLC, for Wolfmont Press and Honey Locust Press