May, 2008

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More Layoffs at Borders Group Inc.

Yesterday I got the call from a VP at Borders that it was to be his last day. Long time merchandise department employees were being moved out and a new structure was being put into place. This was the third such call I’d gotten in the last few months from Ann Arbor. Over the last year, Borders has been structuring and restructuring, working and reworking their systems to try to find the right balance between the old way and the new.

With so much speculation about whether or not Borders will be sold or if they will declare bankruptcy, I am glad to see Borders is still working to try to find answers for their business. I hope they find what they are looking for… the thought of a Border-less book industry makes me a little queasy.

For years, Borders was seen by publishers as the “good chain”. They were open, more laid-back, their schedules and processes were less rigid than other retailers. They were the Ben & Jerrys of the book world.

But times have changed, things are looking bleak, financial reports are in, and Borders is not as successful as their more corporate rival.

I put it to you… why not?

Distribution… The Good, The Bad, The Ugly

Not all distributors are created equal. There are good and not-so-good distributors.

The good ones will keep the books in their warehouses, send their reps out to bookstores to present the books to the buyers, take orders, ship the books, negotiate the cost, bill the stores, and after taking their cut, hand over all the profits paid back to the publisher. When possible, the reps who sold the books to the book buyers will give the publisher feedback as to the reaction the books received. Direct, front-line, market-driven feedback is the key to a good distributor. They can help you keep your determination and focus when books are taking a long time to sell. More often, the feedback can teach a publisher about the changes necessary to the next print run of the book to increase the salability.

The not-so-good distributors will warehouse a publisher’s books and wait for a bookstore to order them. Once the order comes in, they will ship, bill, and handle the accounting, but there will be no follow-up, no creativity, or marketplace-driven marketing or feedback.

Be careful when choosing a distributor. Make sure you do your research. Contact a few of the publishers listed on the distributor’s Web site and ask how they like working with their distributor. Call your local independent bookstore and ask if they carry that particular line of books.

I recently asked Greg Snider of Blu Sky Media Group, a well respected distribution company, to offer some advice about what to consider when researching distributors:

Some questions to ask a prospective distributor:

1.) How long have you been in the distribution business?
2.) How many publishers/companies do you distribute?
3.) How many titles/products do you distribute?
4.) What genres/categories do you distribute?
5.) How many sales reps does your company have? (In-house or outside commission?)
6.) What are your set-up/cataloging fees if you were to accept me as a client?
7.) What percentage of net sales do you take as your distribution fee?
8.) Are there any additional monthly charges that I might incur? (Warehousing, order fulfillment, returns processing, administration, etc.)
9.) How far in advance of my release date do you need to properly sell my title?
10.) What is the length of your agreement?

What you should expect from a distributor:

1.) To correctly list your title data for ordering with all the major brick and mortar, online retailers, and wholesalers.
2.) A thorough presentation of your title to the major retailers and wholesalers in their territory.
3.) Inclusion into the distributors catalogs.
4.) Inclusion of your title in the tradeshows the distributor exhibits/attends.
5.) Timely processing of your title’s orders and returns.
6.) Monthly printed or online sales and inventory reports.
7.) Monthly communication via phone or e-mail to discuss progress.
8.) Access to marketing and advertising opportunities with wholesalers, retailers, and/or consumers.
9.) Continual sales of your title even after the first season.

What you should not expect from a distributor:

1.) Miracles! Your books will not magically appear on every bookstore shelf.
2.) To do all the work. Without a solid, well-planned advertising/marketing campaign geared toward your audience, the distributor will not be able to sell your title to the retailers and wholesalers. This is the publisher/author’s responsibility and not the distributor.
3.) Guaranteed sell through. Once a distributor gets your books onto a bookshelf, it is the publisher’s job to make sure that they fly off the bookstore shelf.

Getting into a distributor’s catalog is a difficult task. It is a very competitive segment, and good distributors are careful to only take on clients whom they feel will be successful. Every successful publisher increases a distributor’s reputation; an unsuccessful publisher can drive a distributor’s reputation down.

What you can do when approaching distributors to improve your chances:

1.) Have your book/advanced reader copy professionally designed. Packaging is key to all products including books, so a professional design is a must.
2.) Have your book professionally edited. Do not use your cousin Susie who’s an English teacher at your local high school as your editor. You need a professional to help you make your book the best it can be from a content standpoint.
3.) Have a detailed plan for your marketing, advertising, and PR. Also, include your budget of what you intend to spend. We see so many submissions from publishers/authors who do not have a plan to let consumers or their target audience know the books exists.
4.) Be willing to listen to the professional. Distributors, retailers, publicists, book shepherds make their living selling books. If they give you advice regarding your book, take it. It may mean the difference in selling a ton or none.

Distribution contracts usually start at two-year terms. They are taking a big risk by taking you on, and they want to safeguard that decision by protecting their investment with a minimum two-year term. It takes at least two years to launch a program properly and to start to see results. They are well within their rights to ask this of a publisher. However, you are well within your rights to get certain agreements from them as well. You should be able to get out of your contract if you can show that your books did not receive the activities contracted.

A distributor’s cut could vary from 25 to 40 percent of the net billing of each book. Some distributors will claim 15 – 20 % distribution fees, but after the charges, fees and add-ons, the total is back up over 25%. Just about every distributor has additional monthly fees, and most require an initial deposit for new clients, but it is up to you to add up what you are really paying. Don’t be fooled by a lower initial number. So the math.

Before you balk at the cost, keep in mind that it is very difficult, expensive, and time consuming to handle your own warehousing, purchase shipping materials, and learn how to ship exactly how each store wishes their shipments to arrive … and everyone is different. (It’s a little joke they like to play on publishers. I am convinced that bookstore owners get together every two years to devise slightly altered yet completely incomprehensible trafficking instructions.) Then comes the billing, monthly statements, handling claims for books damaged in transit, taking in returns, and reconciling the amount due with what the bookstore believes is due.

After that, consider the money and time it takes to tell the country’s thousands of buyers about your books. The sales reps working for distributors have long-standing relationships with the book buyers in your hometown, across the country, and in the major chains. You would not be able to start a fledgling relationship on your own with these buyers. What an experienced sales rep can often do with a phone call, you could rarely accomplish with six months and a great deal of research, e-mails, flyers, catalogs, paperwork, and free samples.

But nothing replaces a publisher’s drive and efforts. The main thing to remember is that a distributor is often as good or as bad as the relationship between the publisher and the distributor. If yours is one of thousands of books on the oppression of clover farmers in New Guinea in your distributor’s catalog, you will not get the time and attention you desire. If you are not out there pushing your book into the press and media, creating a demand for your distributor to work with, they will not keep you for long.

Take your time choosing a distributor. Make sure you are a good fit and that you both share the same goals for your books. If you cannot find a good fit with the distributors that are willing to carry your book, consider doing your own marketing and sales for the first year. Better to wait and do for yourself than be trapped in a loveless “marriage” with the wrong distributor.

Creating Your Sales Schedule

So many publishers and authors call me wanting to get into stores right away. I get calls in March from hopeful authors wanting to get onto Mother’s Day table displays. I hate disappointing people, but I have to tell them that stores choose displayed titles 5-6 months before hand. Stores buy books with a set monthly budget that is used up many months before hand. If you want to successfully launch your books into the retail marketplace, let’s take a look at the items you will want to cover in the months leading up to your publication:

Eight months before your book’s pub date:
Send your book’s data to the wholesalers, retailers, Internet companies, and industry databases.
Hire publicity and marketing firms or create publicity and marketing plans on your own.

Seven months before your book’s pub date:
Contact all database departments and confirm that your book is in their systems correctly
Create sales packages containing sample chapters, table of contents, a color cover, sales information sheet, and a marketing plan.

Six months before your book’s pub date:
Send sales packets to the wholesale and retail buyers.
Write cover copy and marketing plan for back of the Advance Reader’s Copy
Design ARC.
Send ARC files to printer.
Send ARCs to buyers.
Call buyers to follow up and present book information. Request promotion and placement for your book.

Five months before your book’s pub date:
Research potential promotion and placement opportunities appropriate for your book (front-of-store tables, postcard mailings, Internet ads …).
Check again to see that all databases have your book information and have it correctly.

Four months before your book’s pub date:
Send ARCs to reviewers.

Three months before your book’s pub date:
Call reviewers to follow up on review packages.
Buy ads and initiate marketing for launch during pub month.

Two months before your book’s pub date:
Send finished books to buyers with request for orders and updates on your marketing buys.
Participate in a library outreach campaign through your distributor or find a service that allows publishers to announce books to librarians.
Send copies of your finished book to companies, corporations, and catalogs that you feel best represent your book’s audience.

One month before your book’s pub date:
Call all key buyers and confirm orders are in place

This is by no means a complete list, but it will give you an idea of what successful publishers plan for and the schedules they keep.