Blogger: Rachelle Gardner
Today I want to explain some publishing terms that sometimes get confused: sell-in, sell-through, earn-out and returns.
SELL IN: This is the number of copies ordered by retailers (or any other entity) prior to publication of the book. Sometimes this number is called the “lay down” and you’ll hear publishing types say things like, “What was the lay down?” The number tells you how many copies are available to consumers on the day the book first goes on sale. The sell-in figure helps to determine the initial print run.
Of course, the publishing industry has this lovely little tradition called returns* so the sell-in could be just the beginning of your skyrocketing sales figures… or it could be a vastly optimistic early sign of your book’s success, only to be decimated by reality, otherwise known as:
SELL THROUGH: Also known as “net sales,” this is the number of books consumers actually purchase. The number is calculated and recalculated over the life of the book, and always takes into account the returns to-date. Sometimes you’ll hear people say things like, “The sell-in was terrific but the sell-through was disappointing.”
So to simplify: Sell-in refers to the number of books placed in bookstores. Sell-through refers to the number of books consumers carry out of bookstores.
EARN OUT: This refers to whether or not your book sold enough copies for you to earn back the advance you were paid by the publisher. To use this term in a sentence (verb form): “Did your book earn out?” Or to use it as a noun: “What’s the earn-out on that book?”
Keep in mind that the earn-out doesn’t determine the publisher’s profitability on your book.
*And what’s the deal with returns anyway?
Basically the deal is that “returns” are one of the most lamented aspects of the publishing industry, blamed for everything from making it difficult to have a profitable business to global warming and possibly even swine flu. (Okay, maybe not those last two.)
Bookstores can return unsold books to the publisher and get full credit on their account. So this is why your sell-in is one thing, and your sell-through is something else entirely. If your book is doing well, the bookstore will sell out and order more. If your book isn’t selling, the bookstore can package it up and send it back.
The tighter a bookstore’s finances are, the quicker they’ll send back a book. Some bookstores will only give a book a month on the shelf to show some significant sales (however they define significant) and if it doesn’t measure up, back it goes. In tough times, bookstores occasionally return books for credit rather than paying their bills with actual money, setting into motion a devastating financial spiral for many publishers (who actually need cash to run their business, not a warehouse full of unsold books).
Of course, one of the unsung advantages of e-books? No returns.
Thank you so much for sharing this stuff. I had no idea. Love learning all that I can.
Rachelle, what is considered a reasonable percentage for sell through compared to sell in? Thank you.
Ah, good question, Sue.
Now Rachelle,(I’m using my Mommy voice here) any new knowledge is good and useful, even if one doesn’t think the terms are exciting.
Actually, this is quite important for those of us who don’t know the industry as well as we wnt to.
I loved how you used global warming! Hubs studies global warming and oh my word the things people blame on global warming would blow your mind.
Great information to know, even if it’s not “exciting.” 🙂
I think I know, but can you confirm? Advances don’t have to be paid back, right? So what are the consequences if an author doesn’t earn out his/her advance on a book? A lower advance next time around? No publication offers in the future?
And how much of a book’s lack of success is “blamed” on the actual book or author vs. the publisher’s marketing efforts? I’m just curious whether publishers see a book’s failure to sell and decide to step up their marketing efforts or just abandon the book altogether.
Thanks! You always provide such great information.
This is a good question. I’d love to know the answer. I once heard that 1st books rarely earn their advance, which makes me wonder why the advances above the typical earn out.
This is a great question!
Knowing what you’ve stated as being what it is, would a self publisher do well to test the market first through ebook first before print, or does it matter?
Nope. No questions. Just another reminder why marketing is soooo important!!!
With e-books boasting a “no return” format, are traditional publishers (who also sell in e-book form) seeing a much higher percentage of profit from those purchases? I saw a demographic on those percentages over a year ago, but haven’t read one recently.
Thanks for sharing this information!
Oh, the fun Ambrose Pierce would have with our language today 🙂
Sell Out: When a writer makes a buck and his friends accuse him of betraying The Great Literary Struggle.
Swine flu, heh.
*Head Desk*
I’m going to need flashcards.
Fascinating. I always wondered how books made their sales. Now, is that what happens when “major” books stores buy tons by others, and then a few months later are drastically discounted?
Another fabulous post, Rachelle. I can always count on learning something new!
I’ve heard of some of these terms, but a couple
were completely foreign to me. Thank you for
defining them and helping us to be more savvy.
Thanks for the concise info! I’ve understood the concepts, but never heard the terminology.
I’ve noticed some bookstores have dollar racks. How do they fit into the picture? And if the store sells out and orders more, can it return those, too?
I find this information help, and yes, exciting…it’s always good to know what is happening on the other side of the writing fence. Thank you!
Thank you for covering this! Great info!
Thanks Rachelle. Timely and invaluable information, as usual.
Becky
Great information. When my debut novel is released this Christmas, it will be e-book only. And although I do wish they’d print some copies (people so rarely let you sign their Kindles, you know), I am encouraged that there won’t be any returns on it. That’s something to celebrate.
Very informative, as always.
Thanks for the info Rachelle.
One month does not seem like very long to give a book a chance, especially if the author is new and that is discouraging to me as a author.
What is the reason for such a short shelf life?
Super helpful. Thanks!
Having run a business for many years, I am interested in an answer to Sue Harrison’s question about what is a reasonable percentage for sell through. I assume books that are sent back end up on sale racks/websites rather quickly so the publisher can recoup whatever he can get. Is there a way a author can turn that around?
Also, how does a first-time author make whatever the sell through percentage is? It seems sometimes that the odds are against the first-time author – get an agent with a just right query letter and manuscript and sell through well as an unknown. Even at that, I still want to climb those mountains.