Friday, May 2, 2008

The Dreaded Returns - part 1

by Raelene Gorlinsky

If you are not a published author, or you are published in digital, not print, you may not yet be familiar with the publishing industry oddity of “returns”. An outmoded practice that just doesn’t fit in the contemporary business climate, it is a massive waste of paper and time, and a major source of money headaches for publishers and authors.

What are “returns”?

Bookstores and book distributors traditionally over-order the number of books they think they can sell. By a lot—like as much as 50% more in the case of paperback genre fiction. The store doesn’t want to take any chance that they might, gasp, run out of copies and have a customer go elsewhere to buy the book. And there is no “penalty” to them for over-ordering.

After a couple of months (as short as one month for a new mass market genre fiction, typically a couple of months for a trade paperback), the bookseller returns the unsold copies to the publisher for credit. The industry average for returns (paperback fiction) is 30% to 50%; rates below 30% for romance mass market paperbacks are almost unheard of. Mass market paperbacks are “stripped”—the bookseller rips off the cover, discards the book pages, and mails just the cover back as proof. The over-order/return rate on trade paperbacks is often slightly lower than mass market paperbacks, because trades are not stripped; the bookseller must return the full undamaged book. And the bookseller usually has to pay the shipping—sending back hundreds of covers is cheap, shipping trade paperbacks is not, so the bookseller tends to place a more realistic original order.

Some small presses do not accept returns. This can simplify their accounting and tracking and warehousing procedures, but it has a major disadvantage for sales. Many, many book distributors will not carry non-returnable books. And bookstores often won’t order them unless the purchaser pays in advance and is willing to wait six to twelve weeks—not an inducement to a buyer.

Here’s a summary explanation from The Seven Signposts: A Guide to Profitable Publishing by Eric Kampmann:

"Books have been sold on a returnable basis since the 1930’s when some of the major publishers decided to offer accounts an incentive to take greater up front risks. We have been living with the aftermath of this innovation ever since.

"Today, new titles generally experience a 30% to 60% return rate. Books stay on the shelf about 90 days and then come back if they are not moving at sufficient speed. The situation is even worse with mass-market retailers like Walmart and Target.

With backlist titles the story is different. Here, returns will run between 5% and 15% of sales."

Next week, a little more on returns and on the shelf life of books.

4 comments:

Just_Me said...

That's heartbreaking.

Cora Zane said...

Talk about disheartening. It also explains why I never can find any paperback or trade romances on the discount table, only hardcovers with obscure topics. I guess bookstores aren't able to return those and that's why they stick around longer.

Kristi said...

As a consumer, I think that is just a horrible practice. You're wasting paper (do they even recycle all those books?) and just think of all of the "bargain books" or "clearance" type sales they could offer! I am totally a bargain shopper, but I also tend to buy something full-price if I find a couple more cheap books to go with it (it evens out the splurge, you know). It's much harder to justify spending $28 and leaving with one book, but if I could spend $35 and leave with 4....

I am practically salivating with the thought of finding more paperbacks on a bargain table...I would be in the bookstores all the time (think of the secondary sales! The expensive coffee drinks!).

That does explain why Walmart and Target never have a sale table for books. It also makes me wonder if I could make deals with the big chains to buy their overstocks for just at or over their return price, and re-sell them myself (maybe that's what the Half Price chain does?)--they'd still make their money back, and I would save books and trees and possibly make money...hmmm...

Kristin said...

what other industry allows you to return product you've ordered but didn't sell? I think it is a strange practice, and I agree with Kristi...I would buy paperbacks on sale if they were in the bins. But they never are...and now I know why.

Bookstores are missing out on making $$ on these books.