Around here, there are a lot of discussions about how the inherent inefficiencies built into music distribution benefit record labels. The same could be said for book publishing. The model was developed a long time ago, when printing presses were slow, computers occupied entire floors of large buildings, and Amazon was either a river or single-breasted woman. One favorite inefficiency, for both publishers and authors (though for entirely different reasons…no, that’s not true. Same reason, different perspective.), is the policy of returns.
We liked this comment:
After all, the costs involved in maintaining returns create, in effect, the bubble that artificially inflates in turn almost every other aspect of publishing. Sure, popping it would mean a sharp shock of deflation that would rock all of us, publishers, retailers, and everyone else in the business. But doing so would ultimately force everyone involved in publishing to do their jobs better. The overall result? Less waste, more profit—and a more level playing field for indie publishers and booksellers to compete with their corporate brethren.
What would changing publisher returns policies do? Well, it would make bestseller lists more reflective of actual bestsellers, since print runs and initial shipments wouldn’t be such a factor. It would reduce actual manufacturing costs (and their inverse — destroying inventory). It might increase certain other distribution-related costs (freight, fulfillment). It would lessen bookkeeping issues. Hmm, it seems like we’re missing some–
–oh right. It would accelerate royalty payments to authors. That lovely “reserve for returns” line item on your statements? Well, a more efficient returns policy would decrease that number. It would also decrease the time reserves are held. More rapid liquidation leads to more rapid payment. Which, we acknowledge, is not necessarily a major goal of publishers. Time is money and all that (we are not implying that publishers wish to rip-off writers, but there is an inherent time value to money, and all entities wish to maximize this).
One point we do disagree with in Doug Seibold’s article is that a modern returns policy might reduce extravagant advances. Probably not. Bestsellers will continue to command top dollar. Publishers will continue to take baths on trends that fizzle. Humans, being humans, will continue to be human.
Mad Max Perkins expands upon our thoughts, considering the implications of changing returns policies — both positive and negative (and, yes, Virginia, what is good for the author might also be bad for the author).
Continuing The Conversation
Thought about the returns issue has surfaced on other blogs as well. It’s very cool to read different perspectives on the issue (we need a published author or two to weigh on the topic to make this a perfect circle). Bookdwarf and Robert Gray of Fresh Eyes both address the issue from the perspective of booksellers. Gray picks up on the conversation with several key points:
I would love to hear from someone who knows the origins, too. At the sales floor level, returns are a labor-intensive, but necessary, way for us to keep stock fresh. I don’t think there’s any question that eliminating returns would drastically reduce the number of titles a bookshop carried. We would also keep titles on shelves longer. For authors with new books seeking shelf space (and books keep being written, no?), this would not necessarily be a positive situation.
. . .
That said, earlier this month I wrote about my visit to a remainder warehouse. If you want to convince someone that returns are an illogical way to do business, take them to the nearest remainder warehouse and show them in real time how much waste is generated by this industry. And that includes the brand name authors and bestsellers.
. . .
By the way, any change in returns policy would have to exempt orders for event books. We could not routinely order dozens, and often hundreds, of copies of authors’ books for signings if we had to eat what didn’t sell.
For all stakeholders (booksellers, authors, publishers/distributors), the current process increases overhead. For stakeholders such as booksellers, the current process allows them to take risks. For publishers, there is an aftermarket for returned books. For authors, well, we suppose it depends on how remaindered books are treated contractually. The agreements we’ve seen do not suggest that authors benefit greatly from this practice. But we admittedly haven’t seen everything.
2 responses so far ↓
booksquare // Feb 28, 2005 at 10:01 am
Agreed that print run is not a deciding fact, in and of itself, but larger (announced) print runs have a psychological effect on buyers. A 250k print run might be a publisher’s justified belief in a book, or it might be a calculated business move (no shame there, but book buyers cannot always discern between the two).
Now, I will respectfully disagree that bestseller lists represent actual sales. We both know that’s not entirely true. Perhaps it would be better to say something along the lines of actual sales meeting certain criteria (a certain major metropolitan newspaper on the East Coast comes to mind).
For better or worse, the current system, inefficient as it is, benefits certain types of books. If a change were to occur (and this will likely be coincidental with the next ice age), it would have to be gradual and deliberate. Ripping off the band-aid won’t work. At all.
Mad Max // Feb 28, 2005 at 10:01 am
There’s nothing that would do more to eliminating the disadvanges that the publishing industry faces compared to virtually any other industray than an elimination, or radical overhaul, of the returns policy, In truth I cannot image it happening; and it might have devastating effects on on literary novels by unknow writers–which are hard enough to get booksellers to order as is. But all this is beside the point, since there’s no indication whatsoever that such reforms will actually come to pass.
One point I wanted to clarify about bestsellers lists:
For the record, print runs and copies shipped do not in & of themselves have an impact on bestseller lists. Bestseller lists are determined not by copies shipped by publishers but by copies sold by retailers to customers. Obviously a announced first print of 250,000 may convince the bookseller to take hundreds of copies and stack them by the front door–in which case this would likely influence the number of copies sold. But retail bestseller lists reflect “p.o.s” numbers — point of sale, i.e. to CUSTOMERS–and not quantities shipped per se,