PUBLISHED MAY 1996
by Curt Matthews, Independent Publishers Group
I had a call the other day from an editor at Publishers Weekly who was researching an article about returns in the book trade. He wanted to know, from the independent press prospective, if returns were still running at the dreadful levels reached in the first half of this year, the explanation for those unprecedented returns, and if any new buying patterns had emerged in response to this returns debacle. (There is much fear and trembling among trade publishers at the moment.) I did some calling around in order to find some answers.
How bad have the returns been? For one very large and famous New York house, the returns for the first half of the year were above 55%. Most independent presses, however, have simply not experienced trade returns of anything like 55%. (A good thing too!) For instance, returns on the books my company publishes, which have historically been about 17%, did jump up to 30% for several months this spring, but now seem to be settling back toward the customary level. Not a pleasant experience certainly, but not a catastrophe either. Other independents I have spoken to confirm this pattern. To the extent that returns have been a disaster, they mostly have been more a big publisher disaster than a small publisher disaster.
Still, returns are up for everybody, and this presents a paradox. The new paradigm (to use the buzz word) for the book trade-stores stocked with fewer copies of many more titles, just-in-time restocking, fast inventory turns, wholesalers buying for shorter time periods-should logically result in lower returns, not higher ones. After all, the basic idea behind the new paradigm is that consumers will pull the books through the distribution system rather than publishers pushing them through.
What Has Gone Wrong?
The main source of the returns is the superstores, although returns are up somewhat across the board. The core problem seems to be that the buying for these huge stores is not as accurate as it needs to be.
Perhaps we should try to consider the plight of the superstores. How do you decide exactly WHICH 100,000 or 150,000 titles to purchase, and what quantities of each should be placed on the shelves of any given outlet? It has become clear that for such stores to be successful-not counting the national best-sellers-their stock must accurately mirror the tastes and interests of the particular communities they serve, and each community is certain to be different. Literally thousands of niches must be covered, but which niches?
The solution to this thorny problem, in my opinion, can only be a software solution. The sheer number of titles published, and the fact that the superstores buy centrally for all of their outlets, mean that a merely human solution will not work. The bookstore’s theory is that over time very sophisticated computer programs will identify the relevant niches for each store. The buying will become increasingly accurate, and the returns will decline.
Actually there is good reason to think that this approach will work. The superstores that have been in operation for a number of years do seem able to buy very accurately, and the software that they have developed is increasingly subtle. That is the good news. The bad news is that the hundreds of new superstores, and the additional hundreds in the works, will in years to come be refining their computer models for each of these stores by stocking, and in many cases returning, the books we publish.
The question, then, is what can we as independent publishers do to protect ourselves from high returns? Many independents have for years had a policy of pursuing careful, realistic, advance sales in general and even reducing orders from certain customers for certain books. This is especially wise if the publisher knows that the promised publicity support for a book may not materialize, or if a change of any sort in the marketplace is likely to hurt a book’s chances of selling through.
Careful placement of titles by the distributors and/or publishers is the definitive answer to massive returns from the bookstores. Remember, if they need more copies of our titles due to heavy sell-through, they certainly know where and how to get them!