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Shelf Space vs. Sell Through

April 11, 2012

When you first become a published author there is much to learn about the ins and outs of this sometimes difficult to understand industry.  There are some aspects that seem just plain backwards, particularly for those entering the industry from a business background.  One of the hardest elements to come to grips with is the concept that a sale is not really a sale until it goes through two or three transactions.  This makes calculating expected revenue difficult, to say the least.  Add to that the returns factor (discussed here) and you are left with some confusing data to sort through.

 

If you’re working with a distributor, your distributor is going to sell your book to wholesalers and to retailers.  Wholesalers play a very big role in all of this and it’s not uncommon for the majority of your books to first be sold to the myriad of wholesalers out there, big and small.  (Learn about the difference between a wholesaler and a distributor here).Your distributor will report this is a sale to you and you will be paid for that sale (minus returns and reserves against future returns) but in the more explicit sense of the word, it’s not quite a sale yet. At this point, your book has been stocked in a wholesaler’s warehouse with the hopes that their customers (retailers and libraries) will purchase it from them. 

 

Now the retailers and library customers of the wholesaler begin placing their orders for your book through the wholesalers.  The wholesaler considers each order of your book a sale and will be paid for the books by their retail or library customer for those purchases.  If the purchaser is a library, the cycle is done and you can safely call that sale an actual sale since the book is unlikely to be returned.  If the purchaser is a retailer, however, it’s not quite a sale yet.  Your book is one step closer to really being sold, but at this point, your book has now been given shelf space in a retailer’s warehouse and stores with the hopes that their customers, actual book-purchasing and reading consumers, will purchase it from them.

 

When an actual consumer picks up your book from a shelf and buys it, it is finally sold.  Your distributor will differentiate between the sales to the wholesalers and retailers and the actual consumer sales as “sold in” versus “sold through”.  The sold-through number is what you are both going to want to monitor, especially as it relates to the sold-in number.  A large discrepancy can spell trouble around the bend in regard to returns.  Consumer sell through is reported weekly by Nielsen BookScan and can be obtained through your distributor’s account or through your Amazon Author Central Account.

 

Until a consumer actually buys your book, it is subject to being returned by the retailer or the wholesaler, so keep in mind that the act of being placed on shelves is certainly not a guarantee of sales.   You have two or three more “sales” to make before your book is actually sold through.  Focus on creating demand so those books stay sold.

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When Books Get the Hook: What Happens to Unsold and Extra Books

November 2, 2007

stockxpertcom_id4871211_size1.jpgEver wonder what happens to the unsold books sitting in the major publishers’ warehouses across the country once that publisher decides to call it quits on a title? In short, they get the hook. This hook isn’t the one that a roomful of people spend weeks devising to convince the media and public to pay attention to the title in the first place; it’s the one that unceremoniously pulls our featured performer offstage.

In the interest of making sense of all of this, let’s clarify the difference between “books” and “titles”. In the publishing industry, a “title” refers to an individual work of intellectual property. “Books” refers to multiple reproductions of the “title”. So we may say that a certain title has 20,000 books in print.

Publishing is as unpredictable as the tastes of its master, the public. If any publisher knew the secret formula to a locked-in bestseller at the consumer level, he or she would be a gazillionaire. The reality is that creators of media are at the mercy of a lot of factors beyond their control.

A publisher may look at a potential new addition to their line and consider the quality of the work, the performance of comparable titles (“comp titles” in industry speak), the author’s ability to reach the masses, marketing budget, initial feedback from sales reps, and the current buzz on the subject matter to determine whether or not to take the plunge on a new title. If all signs say go, the publisher engages their editorial staff for improvements, finalizes a marketing strategy, and goes to press for a significant quantity of books. So far, so good.

Unfortunately, the public and the marketplace can be fickle. Public opinion on the subject of a biography or an issue may turn, an unexpected competing title may be issued around the same time, or the title just may never hit with the media and/or public. It’s a guessing game to some degree, and we all guess incorrectly here and there.

When a publishing house has a surplus of inventory and a lack of sales momentum, remaindering the books is an option to at least recover a portion of production costs. Remainders are “overstock” units of a title that may be sold in large quantities through a bid list to bargain book wholesalers. The wholesalers then resell them to retailers. These books may also be sold directly to retailers in smaller quantities in what is referred to as a “white sale.” In general, remainders bids come in at less than 10% of retail price under an exclusive buy arrangement. The market skews heavily towards the soccer mom demographic---gardening, travel, cooking, kids, etc. A remaindered title will generally be taken out of print and/or have its barcode punched in an effort to safeguard against returns to wholesalers and retailers at the full price.

When making a decision on how to proceed in publishing your title, this information is important in a couple of ways. First, to give your title more time to sell, consider holding onto your rights and publishing outside of the major houses so that you may have more control over how long your title stays in print. Second, remember that it’s a crowded marketplace. Hone the value, uniqueness, and quality of your product and invest in marketing support---you’ve got a lot of competition. Third, realize that these remaindered titles are competing on the same turf as your new book at a fraction of your cover price and then reread the second point. Do your homework and plan carefully up front to give your title its best shot at a successful launch and a long, profitable backlist life.

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It's Only Money: Managing Author Payments

April 18, 2007

Actually, it's a little bit more than that. Specifically, it's the lifeblood of a business, whether it be a lemonade stand on the street corner or a book publisher. And when it comes to the latter, we all love to see an endless stream of book sales roll in. But turning that mounting stack of purchase orders into cash receipts involves more than sitting back and waiting for checks to arrive. Wholesaler accounts payables departments may try to be diligent about meeting payment deadlines, but let's face it: they deal with an enormous amount of paperwork every day. So don't rely upon them to process your payments on time. Take it upon yourself to make sure they are on top of your accounts and you will, in turn, maximize your cash flows. Here are some helpful tips to make this happen:

Maintain updated contact information for the person who deals directly with your account and that person's supervisor. The former will help make sure you're paid on time, the latter can make sure things get processed if Plan A doesn't pan out.

Be persistent when inquiring about payment status. One e-mail or phone call, often not returned, won't get you anywhere. It's not that they are ignoring you; they handle many accounts, and yours can get lost in the shuffle. Don't allow that to happen. Stay on top of the person who won't get back to you. The squeaky wheel does get the grease. At the very least, at some point your contact will simply get tired of you trying to track them down, and you'll get a response.

Don't wait for your account statements to be requested in order to process payments to you. Find out when they're normally due, and set up a schedule to generate and send them on--or ahead of--schedule.

  • If it's available, have your database administrator set up the functionality for e-mailing statements, invoices, credit memos, and any other paperwork that your accounts payable contact may want. It's a huge time-saver for everyone involved. Severing your ties with a fax machine is always a good thing, and Mother Nature will like you a little better, too.
  • At the end of the day, if someone owes you money, don't hesitate or apologize for being aggressive and proactive when trying to collect it. You don't have to break any knees (unless it's absolutely necessary) to stay on top of where your books and your money are.

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