The 20% solution

Jacqueline Church Simonds, publisher of the highly successful Nevada small press Beaglebay Books, muses on the current status of the relationship of small press publishers with Ingram distributors ...

Recently, we've had a spate of young turks who are convinced they have found the golden keys to the book publishing kingdom by printing up their books via LSI [Lightning Source Int.] - Ingram's POD [Print On Demand] service, which allows for distribution through Ingram, B&T [Baker & Taylor, the second-largest book wholesaler in the business] and bookstores. They have further chosen to demand a short discount of 20% with no returns.

This method allows for a very a small buy-in (low set-up fees). There is an instant "in" with Ingram (because Ingram owns LSI), the largest wholesaler in the biz and the least interested in dealing with newbies - they usually will not talk to you unless you have 10 titles and can make at least $25k a year in sales with them. This also allows self- and micro-publishers an entrée into Amazon without having to deal with Amazon Advantage's yearly fee and mandatory 55% discount. In fact, it's rather like having a virtual distributor.

Yup, it sounds all good. But there are some catches to this rosy picture.

One of the hardest things for new publishers to get their heads around is that they are about to launch into a $3 trillion a year global entertainment industry. It IS a business. Yes, it takes Art to write the book, but the minute you contemplate selling said brain-product, you are in business. As such, you need to know WHO is going to buy your book and HOW to reach them.
WHERE do they shop for your kind of book? You have to know these things, as
well as HOW MUCH they are paying for similar books (many folks with LSI books are already at price levels above what their customers are willing to pay). LSI may get you a book, but it might be too high-priced or in the wrong venue for your customers. Is this the right delivery system for your book? Or would you be better served at trade discounts (55%), or even an offset
run, which would lower your per-unit cost?

~~A short discount (20%) locks you out of certain markets. Like bookstores.
Again, this is a matter of business.

Reasons to *have* a short discount:

o The book is over $40

o The book is on a rarefied subject (academic, medical or professional)

o It is a textbook

o You are testing an idea and will adjust once you see at what levels and prices you have "action"

o You have no plans for selling in bookstores, the listing with Ingram and B&T is just a way of covering all avenues.

o You are selling BOTR (Back of the Room) at speeches, and there is no reason to discount a book you are selling at full retail.

Otherwise, if you are trying to get into bookstores, you are barking up the wrong spruce tree. Bookstores ask for - and get - a 40-46% discount with full returns privileges. They don't do this because they are mean. They have to have something called a profit margin (remember the thing I said about business?) to be able to turn on the lights, pay the help and have a latte machine. I may not like (and in fact, loathe) the returns system, but it is what it is. Why should they take a chance on a small-press/self-published book that probably won't sell because the author/publisher isn't putting anything into marketing to drive people into the store? So the bookstores are not going to order the book. And if they have customers come in and ask for the book, they'll look it up on Ingram and discover it's listed as "no return" and "special order only."
This is simply the kiss of death for a retail situation. My bookstore buddies just tell customers they can't get it. Let the client get the book on Amazon. It's not worth the hassle of ordering and hoping the customer comes back to purchase this book. If they don't, the store is stuck with a
book at near retail. Nope. They won't buy that book.

Giving a short discount to Amazon is also not a great idea. Amazon customers are hooked on discounts. Heaven knows I am. A short-discounted book has no Amazon discount at all. It can't. There's no margin for Amazon to work with. Your customers are rarely looking for YOUR book. They are looking for a book about X subject. If they can choose between Book 1, which has no discount, and Book 2, which does, they will choose the second, cheaper book almost every time. You lose.

How clever is that?

Libraries don't mind a short-discounted, non-return book, but, in most cases, they aren't taking a chance on a book that hasn't had a review from School/Library Journal, Voya, Booklist or Kirkus (and sometimes PW... and maybe ForeWord). Again, they aren't being mean to you. They are under a financial crisis in most cases, and can only buy books they know their constituents will want - and no more.

~~ That brings up another subject. Many using LSI - short discount or regular- are skipping the whole galley/pre-publication review thing. That's fine, if bookstores and libraries aren't your market. But if those are where you want to go, you are hurting your chances for success. You'll need to produce galleys 4 months before your publication date. And you can't sell any books
"to the trade" or off your website during that quiet period. One good review in a pre-pub can mean thousands of sales.

Then there are all the long-lead slick magazines - from Sky & Telescope to Ladies Home Journal and everything in between. These folks can have leads as long as 6-8 months. You need galleys and time (they don't however, care if you are selling the book or not before they bring out something. Obviously, you MUST have the book available when/if they talk about it). So you have to off-set your short discount "savings" with a galley run of at least 25 to cover the pre-publication reviews.

~~ Publish in haste, repent at leisure. That saying adapts so nicely. Why do you have to have it out this week? What's your rush? Very few things are time-sensitive. Hurrying makes for some awful mistakes. Not just typos, but fatal business miscalculations that can doom your book, and your publishing company. Slow down and understand the process before you publish. This is
the real, harsh world. No one will feel sorry for you when your book tanks and you are out moolah. No one will take pity on you, dust you off, pat your po-po and give you your money back. It will just fail. And that s**ks.

In 2003, Ingram threw out self- and micro-publishers (1-4 books). It was devastating. One minute people had Ingram distribution, the next they didn't. By some odd twist of fate, Beagle Bay wasn't tossed out on its long, flopsy ear. We were suddenly in the distribution biz, as several pals came to us asking to have us rep their books.

Ingram has a history of abrupt policy decisions that are not favorable to small presses and self-publishers. I predict that they will get bored with the short discount game within 18 months. The cut-off will be swift and merciless, with no appeal.

The LSI distribution deal will not disappear. Just that you will be forced to accept a 55% discount, or you can't have access to Ingram, etc. So, no, I am not saying you are stupid to do LSI with a short discount and no returns - if you have a sound business reason to do so. But I'd keep an eye on alternative ways to get my books out, just in case LSI/Ingram wakes up with a tummy-ache and gets an idea to harm small publishers...