The Fatal Flaw in the Book Publishing Industry
ByIn the article I posted on my site last week, “Why You Should Consider Self-Publishing for Your First Book,” I kept trying not to talk about what I consider to be a huge flaw in the whole book publishing industry model.
I hinted I might talk about it on my blog.
Today I feel courageous. Here goes.
The big flaw in the whole book publishing system lies in the distribution channels. It is this: Bookstores are allowed to return books for full credit, at their discretion.
Essentially, they get to sell books on consignment. If a book doesn’t sell quickly (they usually give it three months or so), the bookstore just ships it back to the publisher. In many cases, the bookstore never even pays the publisher for 90 days. This can create real cash flow problems, especially for smaller publishers. (I know of at least one who had to sell the company because of this policy.)
Bookstore retailers basically get to show the books on their shelves for free. If the book sells, the publisher gets paid. If it doesn’t, the books go back to the publisher, who then has to put them in the warehouse. The publisher is the one taking nearly all the risk. The only risk for the bookseller is they do have to pay the return shipping, at least on the returns. (Often publishers throw in free shipping when stores order books, so this also lessens their costs.)
This distribution setup is why in all commercial publishers’ contracts with authors, there’s a clause that stipulates they can hold back a certain amount of the royalties, usually not more than 15% of sales.
These distribution practices are a huge headache for publishers and authors alike. Even if your book presells to the bookstores, you never know if those sales are final until months later.
Publishers hate this setup, but it is so ingrained in the whole system that nobody knows what to do about it.
If your book is self-published with a Print-on-Demand publisher, bookstores won’t stock your book–period. It doesn’t matter what POD publishers promise about getting your books into the bookstores. It won’t happen. For a very clear explanation why, see Stephon Rudd’s article, “The Self Publishing Deception.” (NOTE: I am investigating exceptios to this and will report back when I’ve finished my research. Some POD publishers have recognized this as a problem and have worked out a “solution.” Also note that with any POD publisher, you will pay for any service you receive–including a “returnability” option.)
What do you think of the bookstore policy I outlined here? If you have a creative solution to this huge problem, I am all ears! (Along with the whole publishing industry, bookstores excepted of course.)
Post your comments, please!
9 Comments
July 18th, 2007 at 11:55 pm
[...] wondering about my cryptic remarks about the book distribution, see the post on my blog at: http://www.yourbookpublishingcoach.com/the-fatal-flaw-in-the-book-publishing-industry/ [...]
May 7th, 2008 at 7:43 pm
Yes, you are right about self publishing.
They are noted for not keeping their promises.
Big talkers but that is all.
That is why I would not go that route.
Money is one issue, the other is I would always be wondering what they are doing with my books.
July 28th, 2008 at 8:26 pm
There actually are good self-publishing companies out there who will not rip you off. I invite you to listen to the Virtual Book Tour with Mark Levine at http://www.askaboutselfpublishing.com and my interview with Mark at http://www.wordstoprofit.com/self-publish-podcast.html.
March 20th, 2009 at 2:24 pm
Publishers and authors can always choose to be more proactive now that we have the Internet. They can underprice Amazon.com, or have Amazon redirect consumers to the bookseller’s website. I don’t think publishers and authors can complain about Amazon and other retailers, yet at the same time most of them do little or nothing in terms of marketing and attempting to sell directly to the public. I know Amazon surrenders part of their profit with their free shipping policy. Retail bookstores surrender part of their profit with their large stores, and having to stock what seems like millions of different books.
If retail book outlets do not provide a net benefit, publishers and authors can choose not to sell books through them. Self-publishing provides this opportunity directly to the author at a low cost.
As an aspiring author, I don’t like the business model either, yet it seems like the “invisible hand” of the marketplace is at work, giving each player in the game an opportunity to either make some profit or go out of business.
Personally, I think there are too many no-talent, wanna-be authors swamping agents and publishers with manuscripts containing nothing original, and that even their 6th grade teacher would flunk them on. This, of course, restricts opportunity for more talented writers. They all need good mentors to tell them their work sucks, and that they aren’t cut out to be writers. Nor, for that matter, are they likely to become the next “American idol.”
March 20th, 2009 at 3:23 pm
I just want to add that I do feel sorry for the wanna-be authors I just mentioned. However, ambition, a condition of unemployment, or simply not wanting to accept a low wage has no relationship to creativity and writing ability. If an unskilled writer is willing to take a lot of classes and put in a lot of practice, they might have a chance. However, the first thing I personally would look for is whether a person has fresh ideas and a unique perspective.
March 20th, 2009 at 3:27 pm
You make excellent points, Marty. Every industry, no doubt, has flaws in their model somewhere. I’m just familiar with this one.
Your last comment particularly hits home. As a publishing coach/consultant, I could tell people what they want to hear, as many do: that they can write a bestseller in a couple of weeks, that it doesn’t take work on both craft and marketing, that a bit of sleight of hand can bring success overnight.
I don’t say those things.
In fact, I require people to jump through a few hoops, because I truly want people to succeed buit I want them to succeed in the real world.
The publishing world IS awash with people who think they can write, but aren’t willing to do what it takes. I attempt to guide people in what it takes, while shortening the curve to success as much as possible, in a realistic way.
Publishers are still looking for, as you say, people have fresh ideas and a unique perspective. People FOLLOW such people, and thus you have “author platform,” which is what publishers also look for. So, concentrate on “fresh ideas/unique perspective,” make sure those ideas get out there, and you’re on your way….
March 21st, 2009 at 4:26 am
Thanks for your reply, Diane.
I got sidetracked, but will go back to the main topic of this blog.
I am wondering why bookstores often sell books at huge discounts, such as for a few dollars, if they are able to simply ship them back to the publisher. Would I be correct in assuming they have a limited time to return them to the publisher for their money back?
As an long-time observer of the political scene, I can attest that the biggest businesses (e.g., large NY publishers in this case) deliberately see to it that legislation and systems are established in such a way that barriers are put in the way of small, poorly capitalized, would-be competitors. I don’t know if that is the case here, but it wouldn’t surprise me.
In any case, unless the big publishing firms sign on to any change in the existing way of doing business, it is not likely the situation will improve.
August 20th, 2009 at 1:02 am
It’s interesting that you use the phrase “fatal flaw” to describe the role of distribution in the book publishing industry.
My 1997 article “Book Distribution: The Fatal Flaw”, which was published in a m Australian journal called Publishing Studies came to the same conclusion.
I can’t imagine that the article would have made its way to America but I guess it’s possible. Have you read it?
August 20th, 2009 at 2:11 am
Kylee,
No, I didn’t read your article. I guess the distribution system in Australia is similar, then?
I guess we both just see it the same way. I’m glad to know I’m not the only one.