Every man and his dog seemes to be doing a ‘future of publishing’ blog post at the moment, so why not me? I thought I’d have nothing to contribute, that everything has already been said, but then a question on Twitter reminded me that there is one aspect of publishing which rarely rates a mention in the ‘future’ posts, mostly because people are not aware of the big, black, nasty hole that is book distribution.
You think authors make money out of books? OK, they do, but not much. You think publishers make money out of books? They may, but then again, they may not. But which business is almost guaranteed to make money out of books, never gets mentioned anywhere, takes very little risk and cops none of the flak? Well, that would be the distribution business. And they have a lot to lose if the status quo in the book business changes. And I believe that is not necessarily a bad thing.
Currently, things work like this: a publisher publishes a book. The publisher needs to get that book into bookshops. Some bookshops (like Borders or Angus & Robertson) are big enough to buy direct. Most bookshops, though, are not. The publisher doesn’t have travelling reps, so it contracts the business of selling to bookshops out to another business, a distributor, like Tower, or Gary Allen. Yup. You have never heard of them. These businesses have huge warehouses where they will stockpile books and fulfil bookshop orders taken by their sales reps. For this service, they demand from the publisher a discount off the Recommended Retail Price (RRP) of 65-70%. Yes, that’s right. They will sell on to the bookshops for 40% off RRP.
If, after an agreed time, which can be as little as three months, the book doesn’t sell well, they’ll return unsold books to the publisher. Meanwhile, they’ll have collected 25-30% of the book’s cover price per copy for no risk. They don’t buy the books from the publisher; they only pay the publisher for those books they sell.
Wonder why small presses and indies find it so hard to get their books into bookshops? This is why.
So – what happens when the book industry changes, and more of it becomes electronic. For starters, we don’t need publishers anymore. I suspect that there will always be publishers, by way of ‘branding’ books. Publishers have much more marketing power than individuals and have access to channels that are not open to others. I don’t think we will see the end of agents either. An agent’s job will change, sure, but successful authors will be glad to pay someone to look after all the administrative crap.
But book distributors may start running for their lives now.