the future of publishing

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.

2 comments on “the future of publishing

  1. Even Borders, Angus and Robertson buy from Distributors. Many of even the largest publishers do not have their own warehouses – they often don’t have enough stock of their own product to cover the costs of warehousing and staff. Instead, they use distribution centres like ADS – even Hachette, the largest publisher of books in Australia use third party distributors because it just isn’t cost effective to do it in-house. The percentage they take on the books they warehouse is still cheaper for the publisher than running their own warehouse. Alternatively, Allen & Unwin and McMillan distribute their own books directly – to every bookshop, large or small – and they still onsell at 40% of RRP.

    You say ” they’ll have collected 25-30% of the book’s cover price per copy for no risk”. ‘Risk’ isn’t what it is about. They have collected 25-30% of the cover price as a charge for warehousing, staffing, and dealing directly with the bookshops. Warehousing and distribution costs money and it is cheaper for the publishers to do it this way than it is to attempt to do it themselves.

    Most booksellers (including me, when I was selling) would prefer to deal with a distributor who is geared towards supply than deal direct with a publisher who distrubutes their own books – the service is more much more efficient and you can often get books from more than one publisher in a single order. Publishers who do it themselves have minimum order values – meaning, it can often be hard to place an order when you only need a couple of books from that publisher. That means you have to wait until you have enough required books before you place an order (which might take weeks), and then customers have to wait longer to receive the books that they want.

    I think you need to understand the distribution system within Australia a little bit more before making such claims about how the industry works. Maybe speak to a few more booksellers and publishers? Because, about half of what you say above just isn’t true or is misleading

    • I have run a non-fiction bookshop. I have published non-fiction, and dealt with distributors from that end. My experience of the distribution system, which spans 15 years, up until about three years ago is entirely from the point of view of a small publisher/small seller, such as an independent author would be

      May of the large publishers I have dealt with do have their own warehouses, but also work through distributors. For a bookshop, it can be preferable dealing with distributors, but distributors in general tend to shun the smaller sellers, and be very, very tardy in their delivery. In those cases, you get a much better service from the publisher. If you’re a regular bookshop, OK.

      But all this is beside the point. The point is that I think the distribution layer will take the hardest hits when the industry starts changing.

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