Unlike so many other retail operations, book stores have a different sales cycle because they can generally return unsold books (in good condition) to the publisher for a full refund. This means that 30% or more of the books on the shelf at Christmas will be shipped back to the publisher early in the new year, only to appear again on the discount shelves a year or two later for a fraction of the original retail price (and often in rather worse shape for all the additional handling). In the latest SHuSH newsletter, Kennethy Whyte calls this the worst problem in book publishing:
“Indigo Books and Music” by Open Grid Scheduler / Grid Engine is licensed under CC0 1.0
Book publishing doesn’t work like most other retail businesses. If I were in the ugly sweater business, I’d sell 500 ugly sweaters to Saks at $200-a-piece. Saks pays me 500x$200=$100,000, marks the ugly sweaters up to $500, and lays them out on tidy glass shelves under track lighting. Whatever is left after the Christmas season is marked down to half price on crowded sales racks. If Saks still has some ugly sweaters in January, it will ship them to the outlet store where they’re offered at still greater discounts.
What happens to them if they don’t sell at the outlet doesn’t interest me because I’ve got my $100,000. If Saks ordered far too many ugly sweaters, that’s Saks’ problem.
In the book world, I sell 1,000 copies of a book to a retail chain like Barnes & Indigo for $15-a-piece, half the retail price. Barnes & Indigo pays me 1,000x$15=$15,000 and maybe puts some of the books on a front table, or maybe buries them on a bottom shelf in the darkest corner of the store. I might sell a two hundred, four hundred, or six hundred copies.
Let’s be generous and say 600 sell at Barnes & Indigo through the autumn and over the holidays. Come January, the store doesn’t put the remaining stock on sale: it packs up the unsold 400 and ships them back to me for a full refund. The 400 returns, or at least those of them that aren’t crumpled or coffee-stained, go back into the warehouse, which charges me fees to process the returns and more fees to store them. Sometime later, I get a notice of the returns and regret that extra glass of wine I ordered at dinner the night I thought I sold Barnes & Indigo $15,000 worth of books when, in fact, I only sold $9,000 worth of books, perhaps leaving me under-water on that particular title. I also regret boasting of the $15,000 sale to the author, who probably did some royalty math in his head and thought he was getting 40% more than he’ll actually receive.
Returns at publishing houses run somewhere between 25% and 30% annually, across all titles. That’s despite Amazon with its ruthlessly efficient algorithms seldom buying many more copies than it needs, and despite ebooks and audiobooks (which amount to a quarter of sales for many publishers) having almost zero returns.
Millions of books are returned to publishers at this time of year. Sales are slower in January and February, so bookstores hurriedly return all their remaining holiday-season stock and whatever else hasn’t moved to keep themselves in cash. Some of the returns go back into storage. Eventually, most are remaindered, or pulped, or buried. It’s a colossal waste of paper and ink, a headache in terms of shipping/handling/accounting, and dispiriting as heck. You might think you had a great year, hit all your sales targets, exceeded them, even, and then in about the third week of January begins the drip drip drip of returns, and it continues steadily through March. That’s if you’re lucky and it’s drips, not waves. And while the returns are concentrated in the first quarter, your books are returnable year-round, so even a pleasant summer afternoon can be ruined by the unexpected arrival of a pallet of unwanted stock.
