AN IBPA ROUNDTABLE
Returns: Tactics for Addressing a Persistent Problem
Members’ reports on returns in the September issue seemed to reflect a trend toward disallowing returns, or at least some of them. As you’ll see, the reports this month may too. Stay tuned for the third and last installment in this series.
It’s No Returns for Wholesalers
Returns are poison to small publishers like us, and it’s past time for us to stand up for alternatives.
We publish mostly four-color nautical guidebooks and print new editions of each title about every three years; meanwhile, each title is updated online for the customers.
Our wholesale policy is No Returns, but we offer a 50 to 60 percent discount on multiple case lots and 60- to 90-day terms, and at least 30 days before we release a new edition to replace one that’s still being held in some of our wholesalers’ warehouses, we give them all written notice plus a phone call. We always offer to take back the wholesaler’s older stock (covers only; we pay shipping) and give them credit (whatever they had paid us) toward their next order of the new edition.
We bend over backward for our wholesalers and retailers, but it’s worth it to us to avoid the returns nightmares (accounting, inventory, shipping). We struck this bargain 15 years ago with our first national wholesaler, and we’ve had no problem keeping this No Returns policy with subsequent wholesalers. But perhaps we’re in a better-than-average position to buck the returns system, because our books are geared to a special interest, are extremely well made, and are relatively expensive at retail.
Of course, for retail sales we guarantee satisfaction 100 percent, and in 15 years have had only three or four guidebooks returned from retail customers for replacement. The returns had two of one signature, none of another. One retail customer didn’t discover the missing text until he was in Panama, needing to use the text to transit a boat through the Panama Canal. So we sent a replacement book overnight. He went on, via a blog, to tell the boating world what a nice company we are to deal with. We couldn’t have bought advertising that effective.
Patricia Miller Rains
Point Loma Publishing
Returns are probably more of a problem for publishers with titles that go into mainstream bookstores, where the books are competing for attention with thousands of other titles, than they are for our two titles—both about hiking and travel. I think we have few returns because we are small potatoes.
We know our audience and are pretty good at reaching them, which means that although our books are with Amazon and Baker & Taylor, we have focused on getting them into outdoor-supply stores and travel bookstores rather than independent or chain bookstores.
Although we have very few returns, we cringe, like many others, when Baker & Taylor returns books and then turns around and orders more the next day, but we sort of live with it. (I know that people have also complained in the past about B&T being slow to pay, but we don’t have that problem, and we have a good relationship with them overall.)
We present a lot of book/travel programs, which often give us the opportunity to sell books. So when books are returned from B&T, we bring them to our next event and sell them back-of-the-room at a reduced price. Everyone loves a bargain. Because these are direct sales, our profit is actually greater than if the books sold through a bookstore. (Sometimes I wonder if I should damage the covers of our new books so that we could have more stock to discount—just kidding!)
Shepherd Canyon Books
Putting Up with a Pain in the Neck
Bookstores account for a minority of our book sales, but we do consider those sales important. And the simple fact is, accepting substantial numbers of returns is a prerequisite for having books stocked in stores (as opposed to just being available for special orders).
The returns are, of course, a pain in the neck. Sometimes, when a frontlist title has been widely stocked in lots of stores, the returns pour in a few months later, in quantities that create a negative monthly balance with our trade distributor. This is one of many reasons publishing is a gamble. Over time, though, we win that gamble. I track the flow of books and cash very carefully, and having books stocked in stores helps our bottom line, despite the returns.
I don’t waste the damaged books. I resell them at a discount via my Web site and Amazon Marketplace. The hurt copies tend to sell well to bargain hunters, so regardless of the discount, those sales are profitable.
That said, I’m pleased to see some of the big houses challenging the current system of rampant returns. They have leverage that I lack. And maybe, with the pressure they are exerting, policies will change in ways that will reduce our returns too.
But be careful what you wish for. Completely eliminating returns would not benefit most small presses. Because returns are accepted, bookstores are more likely to give our books—which may lack blockbuster potential—a chance to sell in their stores. Otherwise, they’d go back to stocking only sure-sellers, most of which come from big-name authors and publishers.
Publishers have a choice. We can make every effort to have our books stocked in stores and risk substantial returns. Or we can limit or prohibit returns, in which case trade sales would consist only of special orders. I choose the former, even though I understand why many other small publishers are choosing the latter.
Steve Carlson, Publisher
Upper Access, Inc., Book Publishers
A Happy Ending with Hurts
My only major issue with returns was several years ago when a wholesaler purchased 250 copies and returned 290—40 more than it had bought—stickered and in less than prime shape. Fortunately, this was a title on frugality, and I’d always felt it was priced too high for its market. I offered my e-zine subscribers a special deal on hurt books while supplies lasted, sold every single copy direct for $10 (list price was $17), and made more per copy than I would have if the wholesaler had sold them all through.
Coping in the College Market
Our worst return offenders are the Barnes & Noble college bookstores. Yes, it looks great to say two of our books are either required or supplementary reading for university classes. But if the class is canceled or the students discover they can get a better price on Amazon, the shipment comes back.
Our credit memo form clearly states that we apply a 10 percent restocking charge, as does the original invoice. However, B&N has never honored that. Never. They delete the full amount of the original invoice (less shipping) from our ongoing statement.
In an effort to minimize the monetary loss, we reduced our quantity discount to all college bookstores to 10 percent a couple of years ago and increased the shipping charges. That helped the bottom line. Now, because of Barnes & Noble’s continuing disregard of our terms, we have completely eliminated the quantity discount for college bookstores, and we are considering a surcharge for those orders.
The books returned from university bookstores range from pristine to marred with back-cover price stickers. The former I return to inventory; the latter I sell as “used” on Amazon.
Linda C. Senn
Pen Central Press
If at First . . .
For a micropress niche outfit like Higganum Hill Books, returns are disastrous, and we try very hard to limit them, without much success.
The concept of returns is ludicrous, since the ability to order far too many books on spec encourages sloppy store managers to load up on copies, hoping to move a few and quickly return unsold stock with little expense. It smacks of cluster bombing in the hope of killing one or two targeted people while wasting thousands of innocent lives.
Unsuccessfully, HHB has done the following:
We stamp review copies as “Complimentary—Not for Sale” on the upper book edge. We have found our stamped books for sale at two used-book stores, and when we held a book launch at a Cambridge bookstore, I was at the checkout counter when a professor walked up with a dozen or so review copies of other publishers’ books and—without comment or examination—the clerk handed over $2 a book. She told me that the store would return them to a distributor for credit against books the store ordered.
We instruct authors always to sign books sold at readings or given as gifts. We hope that our distributor will not accept inscribed books as returns.
Currently, we are exploring both electronic and nonreturn venues. With the definition of book wildly in flux, success for the Kindle and Mobipocket electronic-book business may end the returns problem.
Dick DeBold, Publisher
Higganum Hill Books
Recycling Within Our Niche
I have never encountered returns except with Baker & Taylor, and I have been complaining directly to them for years, to no avail. But mysteriously, just within the last few months—which coincidentally is when I started sharing my displeasure with Baker & Taylor publicly in media interviews—I have seen a noticeable drop in the number of returns.
Since my target niche is parents and the school market, I send my returns to school districts for review and to parent bloggers as sample copies. I also donate returns to worthy groups such as PTA fundraisers, Head Start programs, libraries, and schools in need across the globe. My approach has been to recycle returns into the hands of potential customers and reviewers.
Cedar Valley Publishing & Mom Central Consulting
No. No. No!
Graphico Publishing does not accept returns. Our customers order books from the main company Web site. We have a statement that says all sales are final and we must adhere to a NO REFUND policy. Once an order is received, the book is placed inside a sealed envelope. A label attached to the envelope states that if the seal is broken, no refund is permitted. The sealed envelope is then placed inside a Flat Rate Priority Mail envelope and mailed with Delivery Confirmation for tracking purposes. We have never received a return.
Graphico Publishing, a subsidiary of 713Training.Com LLC
In Search of a Solution
I wish I knew a better way with returns. We do everything from resell with a discount, to remainder, to donate, to destroy, depending on the condition of the book.
Ingalls Publishing Group, Inc.
The Book as Business Card
I’ve instructed IPG (my distributor) not to destroy my returns. They mail them to me periodically, and I hand them out almost like business cards. It sure feels better than having them shredded, plus the response and results have been very positive.
I love my direct sales, since margins are much greater and returns aren’t an issue.
Three Story Press
Because we are a niche publisher, our books aren’t the kind that get big advance sales with the risk of big returns. Since getting into publishing in 1999, we have always had a nonreturnable policy for wholesale purchases, and this has insulated us from most of the effects of accepting returns. The exception is when doing business with Ingram and B&T. Returns from them are very low—under 2 percent—and many of the returns are “damaged,” not overstock. Because we know we didn’t ship books in that condition, we see these returns from industry distributors as the cost of doing business with the Big Guys.
There is another aspect to this discussion from our perspective as both a book retailer and a publisher. We are wholesale buyers with 300-plus suppliers. Whenever we set up an account with a new supplier (publisher), we ask if we will receive better pricing for nonreturnable purchases. Then, if we make an ordering mistake, we accept it, mark the book down, and put it on a sale page on our Web site.
Conclusions from Comparisons
I come from a clothing retail background and am new to the publishing industry. When I first started in this business, I was surprised that bookstores were allowed to return books simply because they weren’t able to turn over their inventory. This practice simply does not exist in the retail world or in many other types of businesses. Stores usually have buyers, and buyers are held accountable for what sells and what doesn’t. If a buyer makes the wrong decision and chooses merchandise that doesn’t sell, then it’s basically tough luck. The store has to figure out a way to clear its inventory and make room for the new incoming merchandise. If a store buyer continues to buy merchandise that doesn’t sell, the buyer will most likely get fired.
In my retail store, my sales staff walked around, helped customers, and made suggestions. In chain stores, the employees often stand behind an information desk and rarely move until a customer approaches them. Often, their knowledge about their inventory is limited, and all they do is point someone to a shelf. A customer browses through the shelf and leaves without making a purchase. But let’s say a customer was looking for a cookbook for a friend and had no idea which one to get. Wouldn’t it have been nice for an employee to come up and say, “This one is a great book. I bought it for my mom last year, and she loved it. There are many delicious recipes in there. I especially like the one for pot roast.” And that’s how merchandise is moved—by selling it.
Bookstores are too spoiled. If I publish a book and that book doesn’t sell, do I go to the printer and say, “I’m retuning these books because they didn’t sell. Now, give me my money back”? What do you think the printer would say?