Jun 18 2008
Book-Selling Business Wastes Energy through Antiquated Business Practice
FedEx reported a worse-than-expected fiscal fourth-quarter loss today, which they said is due to higher fuel prices eating into profits. They plan to do as much as they can to reduce expenses. People around the country are also doing what they can to use less fuel. The Federal Highway Administration announced today that in April of this year Americans drove 1.8% fewer miles than a year ago—a decline larger than the only other time in our history that driving declined, which was during the energy crisis of the late 1970s and 1980s.
Yet the book-selling business continues to ship books back and forth across the country over and over again as part of a strange arrangement between booksellers and publishers that allows booksellers to return to the publisher for a full refund any books that the bookseller ordered but has not sold.
Last Friday, NPR did a story on this book-return system that quoted the CEO of Barnes & Noble saying that the returns system is “insane.” That’s certainly the way I see it, especially with today’s rising energy costs and signs of global warming.
Most people have no idea how the book-selling business works. They are stunned when I tell them that a bookstore can order a bunch of books, send them back for a full refund if they don’t sell, and then turn around and re-order them. Bookstores routinely do this. In 2005, roughly 1.5 billion books were shipped to bookstores in the U.S., according to the Association of American Publishers. Of those, 465 million, or 31 percent, were later returned to publishers.
It took me a long time to understand the system, myself. Our stress-management book that we first published in the 1980s was mostly sold through bulk sales rather than through bookstores. Later when I had a book published by a major publisher, I still didn’t know how the system worked. The publisher would send my agent statements of numbers of books sold, which my agent would forward on to me. I began to notice that the total numbers of books sold was going down over time rather than up, so I asked my agent what was going on. That’s when I found out that bookstores routinely order many copies of a book—which show up as “sold” on the publisher’s statement—but then return on average 25% or more of them—which removes them from the “sold” category. To this day, I have only a vague idea of how many copies of that book were actually sold.
Now that I am publishing fiction, I have learned that if I want bookstores to order my books to put on their shelves, I have to make my books returnable. My printer, Lightning Source (LSI), offers me two choices as to what happens to books that are ordered and then returned. LSI can destroy the returned books (a painful thought) and I will be charged the wholesale cost of the books. Or, LSI can return the books to me, for which I will be charged the wholesale cost of the books plus a $2.00 per book return fee. I have chosen the second option, thinking I would rather resell the returned books myself than have them destroyed and still have to pay for them.
To me, this seems like an inefficient, wasteful way to do business. Not only does this waste energy shipping millions of books around and storing them, but returned books must be processed by hand to remove stickers and determine whether the book is in condition to be sent back out to stores or must be destroyed.
What will it take to change the returns system? Small independent publishers like me don’t have the clout to start a movement to abolish returns in the book business. Major publishers will need to stop accepting returns and most are afraid that doing so would result in drastic cuts in their orders from bookstores. And large publishing houses can easily pay for their returns on the backs of their bestsellers. However, a new HarperCollins imprint (see my April 10 blog) plans to make its books nonreturnable. We’ll see how this experiment turns out.
Meanwhile, we can spread the word about this antiquated practice. If more people know how much energy is being wasted by this book-return system, maybe there will be some pressure on major publishers and booksellers to put a stop to it.
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“Small independent publishers like me don’t have the clout to start a movement to abolish returns in the book business.”
Excuse me, but if Franklin, Jefferson and Adams had believed that, you and I would be singing “God Save the Queen.”
Just so you know, that book you’ll get back from LSI won’t be the one the bookseller returned. They’ll trash that and print you a new copy. So, you won’t have to worry whether it will be fit for sale, it will. On the other hand, the original book has not only added yet more to the carbon footprint but the resources used to create it will have been wasted.
Are we really SO desperate to receive the grudging acceptance of booksellers that we aren’t willing to band together and say “not on your life?” It’s one thing to agree to accept returns on a small, individual order if it means the difference between an author being able to hold a signing or not, but I do not and will not contribute to the appalling waste that is returns.
And anyone who agrees with me is welcome to contact me at zumayabooks(at)gmail.com to discuss how we small publishers CAN start a movement.
As Franklin said back when the colonists were giving Parliament the kiss-off, “If we do not hang together, then we shall surely hang separately.” Returns are an abomination, both environmentally and with regard to the economic impact they have on inventory-free publishers whose COGS is higher than that of traditional, offset-using publishers.
Booksellers aren’t required to order ten copies of a book when two would do. They’ve just gotten so addicted to being able to do it and ship the excess back for credit they can then apply to their next order they’ve come to accept it as a reasonable way to finance stocking. I’m not prepared to subsidize their business at the expense of mine, and most particularly at the expense of the authors who trust me to see they are fairly compensated for their hard work.
You appear to be blaming the stores largely for this foolish way of doing things. I grew up in the bookstore industry and know that, in truth, the publishers designed it in an effort to get bookstores to put a larger variety of their titles on the shelves. It worked, too. The problem is the reader/buyer is a fickle critter, and it is impossible to predict what a person will or will not buy. The returnable books policy gives the store the insurance policy to gamble on carrying the title. Now if you take that away, the stores, which are struggling to stay afloat as is in an Internet world and with a low profit margin, will buy fewer books and fewer risky or esoteric ones - boring shelves will be the result, where stores will carry only the next sure thing. Of course, the next sure thing will sell even better at the discount houses and on the web. See the pattern.
The solution? Perhaps giving the stores a better profit margin on non-returnable higher-risk packages [variety] would give stores the incentive to buy them, promote them, and sell the duds at a discount. No more books being shipped back and forth. But are the publishers willing to give up some of their profit margin to make it work? And would it be enough to help save the dying bookstore industry? Or would it simply make the Internet companies that much stronger?
Based on the most recent Random House/Zogby poll, I think the whole issue of returns is rapidly becoming irrelevant because chain bookstores are increasingly irrelevant to any given author’s sales. The poll shows that in the past year, 68% of respondents made the majority of their book purchases from vendors *other* than big chain bookstores. 43% responded that they bought most of their books online. Combine an online-only retail delivery system with POD production methods, and all the waste and illogic of the current returns system, along with all the author careers it’s killing, become a thing of the past. I publish my trade paperbacks via POD exclusively, so none of my books even get printed until a customer has ordered and paid for each copy. No remainders, no returns, no yo-yo ordering and redundant shipping expense and greenhouse emissions. I blogged about the poll here (including a link back to the poll results on Zogby’s site), in a post entitled Big Chain Bookstore Death Watch:
http://aprillhamilton.blogspot.com/