This is a quick follow-up to explain what I meant about companies returning books that they reorder again at around the same time of the return.
In case there are people not familiar with the book sales cycle it goes like this: I publish books. My printer sends them to my distributor. The distributor sends them wholesalers (and to some stores that have accounts directly with them). The wholesalers sell the books to the book stores and libraries.
Sometimes a wholesaler who bought 3000 books and sold 2500 will pay for the 2500 and return the remaining 500, even if they need those 500 for upcoming sales that month. They reorder the books they're returning, sometimes right when they're returning them.
By returning and reordering they get another 30 days to pay. They can wait until they get the money in hand for those last 500 books before having to pay the distributor. By returning and reordering they don't have to put money up front for books that haven't been paid for by their customers (the book stores and libraries) yet.
The distributor and the publisher are the ones who suffer extra expense and book wear due to this tactic. The distributor has to handle a new inbound and then outbound shipment, then the paperwork for a credit and then a new order. The publisher gets unnecessary wear on their books and a returns fee.
I think the book business term for this is churning, but I'm not 100% on that.
These aren't book stores doing this. It's not every wholesaler either. Still, large wholesalers have the best return agreements with the distributors. The biggest wholesalers don't pay for the product to ship to them. They ship a high volume of returns, so the cost per book that they return is negligible. In some cases the distributors pick up the returns at no cost to them with the same truck that delivers the books.
My information is based on anecdotal evidence. I am aware of one publisher suing right now over a practice similar to what I describe, but from my side of the business it would be hard to prove. I just see my sales reports and go Hmmm sometimes.
2 comments:
I never realised that the hurt of returns carried over into publishing. (I work retail, and returns are a horrible problem for us too, mostly because people will return hundreds of dollars worth of stuff that they didn't even buy from our store).
The way my company handles this, though, is a painful (yet effective) tactic called retail cannibalism. The idea is that you set up multiple locations in a highly condensed area (or if not multiple locations of your own store, set up next to your competitors). You face a high level of returns, but end up making more money in the long run because you are generating more sales by splintering your locations.
In theory, couldn't a publisher or a distributor use a similar or reverse tactic to combat returns?
Or maybe just tell them "no, stop it"? :(
I don't understand your comment.
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