Blogger: Wendy Lawton
Location: Books & Such Central Valley, California Office
First Published: August 10, 2009
I used to have a terrible worry habit. When I was young I was a master at the worst case scenario. It’s been more than twenty years since I began to practice the advice found in Philippians 4:6 and using the three-part system (prayer, petition and thanksgiving) to banish worry. What an improvement to my quality of life. And worry or not, none of the worst case scenarios ever came to pass anyway.
But I have to confess, a few things in our industry have caused my brow to furrow a little more of late. No, I’m not worrying about them, but I am seeing some trends that bear watching. I wanted to share some of them here to get your take on them.
Read and Return: As I’ve flown lately, I’ve come across more airport booksellers offering to buy your purchased book back at your destination airport for a portion of the original cost. Here’s how the program works. You buy the book in, say, San Francisco, read it on the flight across country and return it in New York for 50% of the sales price. Or you take the book home to read and on your next flight you bring it back for the refund. Nifty little promotion right?
It wouldn’t be so bad if the authors’ payday wasn’t based on each copy sold. Not to mention that bestseller lists use number of copies sold to determine standing and your publisher and/or future publisher scrutinizes your sales numbers very carefully. How does the author get paid for that read? He doesn’t. And, speaking of worst case scenario, what if after “selling” the book four times (and making their margin four different times on the one single SKU), the bookstore rips the cover off the book and sends it back to the publisher as a return? You not only have missed out on royalties off four different sales, but that return is deducted from your royalties. Hopefully, publishers have addressed this by making sales into those Read-and-Return shops final, but does anyone know if that’s the case?
Returns: Now that I’ve opened Pandora’s box, let me address the issue of returns as well. Coming from the toy industry, with a similar distribution structure, I was flabbergasted when I learned how the majority of books are sold to retail bookstores. In essence the bookstores technically enjoy a no-risk scenario. They place their order with their publishers’ sales team, get the books on the shelves and, if the book doesn’t sell, they pack up the books and send the lot back to the publisher for a credit. Or, even easier, rip off the covers, return the cover and discard the book. It’s true that bookstores receive a smaller margin for the privilege (40% margin instead of the tradition retail keystone of 50%), but that short margin causes the problems we are seeing in indie bookstores across the country now–no one can operate a retail operation with skyrocketing employee costs, insurance, taxes and commercial rent on a margin of 40%. Do the numbers. Unless an Independent bookstore owner owns the property outright and works the store himself, the numbers just don’t add up. But I digress.
This model leads to all kinds of problems. I went into my independent Christian bookstore to buy a recent title from a bestselling novelist. I couldn’t find it on the shelf. The clerk told me she was sure they had it. When she checked the computer, it showed they had indeed had it but had packed it up and sent it back to the publisher. I know the people in the store very well, so I questioned her further about why they would short themselves on a popular title. Her answer? Money was tight, and the bill was coming due and the only way to pay on time was to take as much as possible off the shelf for credit toward the bill.
I know it’s been the tradition for a long time, but the practice of returns adds to my furrowed brow.
As an agent, my job is to see that my authors get paid. But doesn’t it feel like everyone keeps chipping away at our little piece of the pie? I look forward to your comments. Am I missing something here? Anybody else experiencing the furrowed brow when it comes to our industry of late?
I’m really surprised about returns too. Maybe books need to start being packaged, like dvds? Then they can’t be read and returned….
Wow, I hadn’t heard about all of this! Makes me mad, actually, and the first pratice of returning books for a portion of the cost at other airports almost sounds like it should be illegal? But, I guess it’s not much different than a used bookstore? I’m a struggling, poor author and even if my piece of the pie is tiny, I want the entire piece!
In addition to the practices you mention, I’m curious how e-book pricing will effect the dollars earned for writers. Yes, I understand that production costs are down on a digital book, but so are the price points.
How far away are we from multiple discount pricing on e-books? We see those Buy 3, Get 1 Free promotions in Borders and B&N all the time. In that model, both the pie itself and the revenue are smaller.
This presents a very scary scenario, but I think in the end it will drive us back to the essence of business. People expend energy and take risks in order to make a profit. When there is no sufficient reward, the producers stop expending the energy and absorbing the risks. For now, store owners with slim profit margins seem to have found ways to maximize their profits and minimize their risks, but in so doing they may be shoving a disproportionate risk onto writers and publishers. This throws the market off balance.
I tend to think, though, that capitalistic business principles are more or less part of the natural order of the universe. Producers will not continue to produce without reward, so either through better controls or innovative methods, the market will eventually be rebalanced. Maybe part of our job as writers in this new century will be to become a smarter part of that process through discussions just like the ones you introduce here.
I’m not sure how the read-and-return bookstores are any more negative than the public library, where one also can read a book for free.
These bookstores are effectively operating a book rental service, and as long as they don’t then attempt to return the books as unsold, it seems to be as legitimate a business model as Netflix or any other rental service.
A related difference between the book and toy industry is the practice of prepricing books. Many retailers mitigate some of the risk of stocking inventory by pricing new merchandise at a larger than keystone markup, thus leaving more room for discounts if their risk doesn’t pan out.
A non-returnable, non-prepriced option might improve publishers’ situations while also allowing bookstores a path to still take some risk in purchasing inventory.
It’s a sad thing to see, but there are many things taking pennies out of authors paychecks I have learned. Because of things like this, I have a personal policy that if I like a book, I’m going to go out and support the author by buying it.
Interesting observation, Mike.
And Janet pointed out differences between libraries and read-and-return bookstores but there are more. In our country we have a long and proud heritage of free libraries– it’s one of our distinctives. And libraries are not-for-profit, owned by the people.
Ame, I feel the same way. One of the best ways we can vote for authors is to buy their book and tell others about it.
Inventory-less and the new machines seem like a better and better deal. My sil used to work for C Levy distributors, and some practices she described curl your hair.
If I’m not mistaken, the royalty structure for film rentals still pays the creator/s for each rental. This is NOT the case in book publishing, so the two are not exactly comparable.
When our church plays or sings a song in worship, we track that and report it to the copyright licensing agency, so they can correctly direct our royalty fees.
Yeah, it’s a different world…
I like Ame’s policy: if you like a book, go buy it.
Bill
Jane, I just need to jump in to say that the library market operates under a different paradigm than the airport read-and-return bookstores. Libraries don’t have the option of returning a book to the publisher, and libraries try to buy hardback books because they last longer than trade paper. In addition, libraries often buy more than one copy of a title, and after 4 to 5 checkouts, the book starts looking pretty worn; so the library buys another copy. All that’s a far cry from read-and-return bookstores.
Sad to say, our church library gets rid of some fiction. I have taken them home and now have so much to read. But like the Left Behind Series, I ended up buying some of them. On the up side, our church library buys fiction and recycles it out to congregation members if it doesn’t get checked out after a while.
The industry worries me, too.
Free might equal sales. LIke the Teri Blackstock series, I want to buy more of her series of books (as soon as budget allows).
The resale deal is awful. They are, in effect, renting the books and they need to pay royalties.
Can you imagine having a store with movies and music CDs and selling them and reselling over and over? You’d never have to pay royalties.
Sweet. For you,anyway.
I’ve sent this link to the Author’s Guild to see what they say about this.
The return policy of the publishing industry has got to go. It is no longer viable. And it will go, I’m sure of it. The pressures are too great.
Meanwhile, print on demand and digital books are giving books a new lease on life, even those that never get beyond a first print run. A book can be generating income for years to come under this scenario, which is only good news for authors.
Rip off the cover! That made my toes curl. How could someone who is supposed to love books do something so barbaric?
I’m still not convinced read-and-return bookstores are a problem. Don’t used book stores effectively do the same thing? Free libraries or book rentals still have the books being read many times for fewer purchases. As long as the bookstores can’t return the books (and that should be ensured) then it’s no different from buying the book at a used book store.
In fact, with the assurance that a reader can return a badly-written book, more people may take the plunge and buy the hardback, then end up keeping it if it’s enjoyable.
I use my public library and I’ve been given free review copies. I’ve borrowed books from friends and loaned my own back. When I’m done with some books, I’ve passed them along to my own public library. All of these means are legal and perfectly acceptable.
Jane, I think the point here is that a book borrowed is one less book sold. Of course there’s nothing wrong with loaning out your books or donating them to a library when you’re through with them. Teens especially are prone to share one copy of a book with several friends, as the book is passed around. But the thing readers aren’t thinking about is that, if everyone “shares” a book with others, it’s less likely the publisher will ask that author to write additional books because the first book didn’t sell enough copies. It’s a catch-22 kind of world.
Jane, loaning a book is legal and ethical. You bought the book and it’s yours to do with as you please. But to sell a book over and over is not OK. It is, in effect, a rental, and royalties should be paid.
The owner of the store buys the book for twenty dollars and then rents it to a thousand travelers for ten bucks each. He makes ten thousand dollars on a twenty dollar book.
Yikes! I need to get into that business!
That is not what used bookstores are doing.
The customer is stupid for paying ten bucks to rent the book for five hours and the author and publisher is getting screwed. It’s a bad deal for everyone but the smart entrepreneur who thought up the scheme.
Actually, music does the same thing with resale. Good point, Janet. I love Terri Blackstock, but if I never bought a book and kept borrowing, I would be sad because the series would not continue. She wasn’t going to continue the Newpoint 911 series until she got reader letters asking her to keep going.
With the high cost of books, I have a tendacy to buy books form Half.com and Ebay. (Most of the books are audio books.) Some of the books are comming from are electronic book stores but most are probally just users getting rid of their collection which is one reason why people are donating old books to libraries as much anymore. I find the selection of books for sale at libraries much to be desired.
I mean “are not donating old books to libraries”.
First, a hearty AMEN to Ame’s comment above.
Second, YES, books’ prices have soared. But even in today’s economy with folks more conscientious than ever (with regards to family budgets) it’s always amazing to see what some are still willing to spend money on without batting an eye…cell phones for young children, a television for every room, and movie tickets at 10-12 dollars a piece to mention only a few!
It’s like anything in life, we make choices. Why is it that society can’t see the merit in purchasing a BOOK? A book doesn’t cost as much as a condo at the beach, and it still has the power to transport us to new worlds and the potential to change lives.
And I’d happily pay DOUBLE for some of the keepers on my shelves, because I love reading books almost as much as I adore writing them. : )
I know this is a small matter amongst the larger issues discussed in this post, but why would stores rip off just the cover and return it rather than the whole book? To save on shipping costs?
Like Joyce first commented, reading that actually made me flinch with a little pain.
These issues definitely need solutions, though I don’t know the answer. It all makes my head spin with a bit of confusion.
With the big box bookstores breathing down their necks, I can sympathize with the independent bookseller and the need to pay the bills. Even though I can’t say I’m retail savvy, isn’t your bookseller a bit shortsighted if she habitually returns recent or popular releases?
If I had discovered what you did, Wendy, I’d probably consider skipping that store the next time I was looking for a particular book. Why should I waste my time to stop and check when I’m sure to find it at the bigger store? In that case, she’s losing a present sale as well as future sales.
I guess the answers don’t come easy, especially in this economy.
Thanks for the posts this week.
When I was a kid our county clerk had a sign on his desk that said, “Don’t tell me worrying doesn’t help. I’ve worried about lots of things that never happened.”
As for read and return, I’m torn. As a writer I want to sell LOTS of books, but I also want to reach LOTS of readers and this might increase that number. It would be helpful if read and return bookstores tracked each book’s popularity so publishers would know who was a good bet for another book.
As to libraries … I love ’em. More power to ’em. I KNOW they have found me many fans who wouldn’t have otherwise read my work. I don’t know what I would have done with them when I was home schooling my four kids. I have, however, wondered if a tiny piece of the library pie wouldn’t help us all somehow. I’ve heard that in England authors are paid a royalty of some kind based on the check-out frequency of their titles in the libraries. I wonder how that works and if it might work here in the U.S. and perhaps quiet a lot of the fear of the digital lending issues with libraries as well. The same for the airport lending Wendy mentions. And are best-seller lists based on the orders a bookstore places (with full knowledge they can return them) or on sell-through? Because if it’s the former … that’s stacking the deck and, IMHO, calls into question the meaning of the lists.
Cover-ripping seems so … not … green. I know they do the same with unsold magazines. That needs to change. Supply and demand can surely be tracked better than that … it seems so inefficient.
It isn’t just the little stores doing this. What I find more troubling, is that Amazon is now offering to buy your used copy back (although their offer seems to be for about 15% of the purchase price).
I notice that Cracker Barrel restaurants have their own angle on the read-and-return elsewhere market. However, they offer books on CD(some of them Christian titles), which can be picked up while dining in one Cracker Barrel and then returned at any other Cracker Barrel for a partial refund. Not only do they “sell” the same book multiple times, but they trick you into stopping at their restaurant franchise twice instead of once. Clever marketing scheme….
I used to work in a small bookstore and I couldn’t believe the amount of books we returned. Some of it was done for the reason Wendy mentioned in her post–money was tight. Another reason was the small amount of shelf space.
I rarely loan out books to friends, and since I became an author I don’t do it at all. It might be fine for some people, but I keep thinking about the author who didn’t get a royalty because I shared the book I bought. The other side of the coin for me is that I am particular with what I buy, so I usually want to hold onto them anyway.
If I get one I really don’t care for, I tend to donate it to my library for their used book sale.
Not only does Amazon offer to buy books back, they wait a month or two and send me a reminder of which books I’ve purchased, and then offer to buy them. I love the ability to search in one place for out-of-print books physically located in brick-and-mortar stores all over the globe. I hate that they remember every search I’ve entered and every purchase I’ve ever made. On the other hand, they will remember every person who purchased an author’s first book, and notify them when a second is due to appear. From an author’s point of view, I guess that’s worth something.