PUBLISHED SEPTEMBER/OCTOBER 2018
by Deb Vanasse, Reporter, IBPA Independent magazine —
For many indie publishers, full-service distribution is attractive. But to benefit from it, you need a growing platform, a commitment to marketing, and sufficient cash flow.
“If only we had better distribution.”
Among new and emerging publishers, it’s a common lament. Without full-service distribution, placing titles in brick-and-mortar stores is a challenge. Wholesale distributors can help with warehousing and cataloguing, but what publishers most covet is the sales and marketing component that comes with full-service distribution.
The catch? Full-service distributors use a selection process. Not all publishers make the cut, and with good reason. To benefit from full-service distribution, you need a growing platform, a commitment to marketing, and sufficient cash flow.
Poised for Growth
As the team at Fille Vertes Publishing looked to the company’s future, they noted that their salesperson, while talented, wasn’t making much headway cold-calling retailers. They also realized there was only so much growth they could achieve if they continued shipping books on their own.
“Our owner felt it was important to streamline the path from production to the hands of readers, and we wanted to partner with a distributor who has an active sales force to supplement our marketing efforts,” says Milly Thiringer, acquisitions editor and operations manager at Fille Vertes. With these factors in mind, the company entered into a distribution agreement with Small Press United, a subsidiary of Independent Publishers Group (IPG).
Outgrowing their own resources, publishers like Filles Vertes are the ones most likely to benefit from full-scale distribution, notes Richard T. Williams, IPG’s director of publisher development. “The ideal partner from a distribution point of view is one where the marketing activities of the publisher and the authors require that they have wider availability in order to match their growing platform, which in turn also allows their platform to get bigger,” he explains.
To make it easier for independent booksellers to order their titles, Homebound Publications made the leap from print on demand (POD) distribution to full-service distribution with Midpoint Trade. But as Homebound’s founder Leslie Browning points out, full-service distribution isn’t for everyone.
“I think you can run a sustainable model without full distribution if you have an active author base,” she says. “I also think you don’t need full distribution if you have a regionally focused press. [But] if you want to go after the national stage, full distribution will be needed.”
Publishers who pursue full-service distribution should be aware of the obligations it entails, notes Peter Trimarco, publisher at Notable Kids Publishing, which also distributes through Midpoint Trade. “Securing distribution does not translate to instant sales and success,” he says. “In fact, your work actually becomes more demanding, as maintaining full-service distribution means that you must stay committed to marketing and working closely with your distributor.”
A distributor’s selection process aims to ensure that publishers can handle these commitments.” A publisher who is not selected for distribution is also being protected from financial loss,” Williams explains. “Neither publisher nor distributor gain anything if the sales efforts are going to cost more than the revenue generated as a result.”
To assess publishers’ potential, Williams says distributors consider factors such as the amount of marketing capital companies have on hand and the potential size of the audience their authors can reach. “IPG looks for long-term partners,” he says. “We need to know that a publisher is worth the investment and will similarly invest in us.”
By the Numbers
The benefits of full-service distribution are many, but publishers also need to run the numbers to ensure that the model will be profitable and sustainable. That starts with calculating net based on competitive pricing.
“Take the retail cost, divide it in two, subtract roughly a third of that, and see if what you have left over covers the production cost, the publicity and marketing expenses, and the percent due to the author,” Williams says.
Richard T. Williams
Retail costs may vary, he notes, but they must be competitive within the trade. “Domestic color printing, small-run quantities, and overproduction can seriously limit a publisher’s ability to work within a distribution model and still make a profit,” he says.
Publishers must also print stock sufficient to fulfill orders. Based on projections and sales trends, Notable Kids keeps at least a three-month supply on hand. “Initially, it is expensive,” Trimarco admits. “However, if you are serious about your projects and they are viable to the marketplace, working the long game is a risk worth taking.”
Distributing with IPG, See Sharp Press publisher Chaz Bufe uses POD to stock minimal inventory on slow-selling titles. Taking advantage of lower per-unit costs, the company uses offset for better-selling titles, aiming for a two-year supply with each new printing. “Since we no longer have to do offset runs for everything, our return on investment has considerably increased over time,” Bufe explains.
Switching from POD to full-service distribution, Homebound incurred significant upfront costs as they printed inventory for 80 titles. Now that they’re established with their distributor, they keep only a few copies of backlist titles on hand while carrying anywhere from 100 units to 1,000 units of their front list.
“Carrying the inventory isn’t a huge issue,” says Browning. “The issue is having to print short runs, having to brace for returns, and maintaining cash flow in the first year when all the money is going out and nothing is coming in.”
Williams cites cash flow as the most important financial hurdle for publishers seeking a full-service distribution arrangement. Distributors generally operate on a deferred payment schedule, so publishers need to be able to sustain themselves financially during the transition. “The move to distribution can be costly and disruptive if it’s not planned appropriately,” he says.
He recommends that publishers work a minimum of six to eight months out, with a pocket of cash set aside for advertising and promotion. He also advises companies to postpone publication of new titles until distribution up and running, and to budget for reprints in case success comes suddenly.
Two and a half years into their distribution arrangement, Trimarco reports that Notable Kids has recovered most of its investment. “As we continue to develop our product line, it will certainly be worth continuing,” he says.
Seventeen years into his arrangement with IPG, Bufe affirms the value of full-service distribution. “Having a distributor is a huge plus as regards sales, and greater sales more than compensate for the distributor’s cut,” he says. “A distributor can do a far better job of distribution and promotion within the book trade than a small publisher.”
A Matter of Focus
There are reasons aplenty for publishers to aspire to full-service distribution. In addition to increased access and visibility in the marketplace, companies benefit when distributors handle functions such as fulfillment and retail sales. “Using a distributor frees up our team to focus on the craft of publishing worthy books,” Thiringer says.
Distributor relationships also encourage collaboration and planning. “We are learning the value in working closely with the distributor and allowing for plenty of lead time on all aspects of publishing,” Trimarco says.
“Even with that said,” he warns, “temper expectations. It’s a long road.”
As with publishers, distributors vary in focus, so Williams urges publishers to choose wisely. “Some distributors are better for some kinds of publishers than others,” he says. “Do the research, talk to existing clients, and know your own market well enough to know how best to reach it.”
Not every publisher is ready for full-service distribution. But for companies committed to marketing and mindful of cash flow, distribution can be a powerful means to continued growth.
About IPG and SPU
A subsidiary of Independent Publishers Group (IPG), Small Press United (SPU) offers an entry-level option for publishers seeking full-service distribution. Here, IPG Director of Publisher Development Richard Williams explains the alternatives:
IPG has a more traditional model: two seasons a year, with titles announced six to eight months prior to pub date. An SPU publisher typically is trying to reach the market now with titles already available and isn’t announcing titles with as long a lead as the trade expects.
- Announces titles seasonally, two seasons a year (spring/fall)
- Expects long-term investment from publishers and ongoing publishing programs
- Does not typically sign publishers who would be under $50,000 in net revenue
- Has a rolling submission model, with new blasts of titles going out to accounts and reps every other month
- May have finite programs (i.e., one to five titles in their entire lifespan)
- May have publishers with more than $50,000 in net revenue but who are not publishing on traditional timeframes
- SPU publishers are granted an IBPA membership when they sign up, or if they are already IBPA members, a year’s renewal
The selection process for IPG requires not just examples of what the publisher has already done, but also a good portfolio or plan for what is yet to come. This is not usually the way with SPU, where publishers can have immediate needs to reach the market with no future plans at all, and the evaluation is usually limited to a simple application form.
Publishers in both programs are sold as IPG, and titles from all IPG programs combine on customer orders, shipments, etc. Both are eligible for co-op and additional marketing programs on the account level and will generally have access to IPG resources to help them grow. Because the lines are blurring, we can put an SPU title in an IPG catalog to maximize its sales potential if it’s being published with a long lead and is appropriately boosted by marketing and publicity.
Co-founder of 49 Writers and founder of the author co-op Running Fox Books, Deb Vanasse is the author of 17 books. Among her most recent are the novel Cold Spell and a biography, Wealth Woman: Kate Carmack and the Klondike Race for Gold. She also works as a freelance editor.
To learn more about distribution, check out this IBPA Independent article, “The Evolution of Distribution“