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In 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!

This entry was posted on Friday, March 16th, 2007 at 5:53 pm and is filed under Writing, publishing, promoting books. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.