Publishing Industry - It Be Gettin’ Chillier

Does this translate that it’s going to be harder to get published? Yes. With millions of books being returned to publishers and fewer books being shelved – and this also includes Ingram as well – 2008 and 2009 are going to be very tough years for everyone connected with the publishing industry, as I blogged about here.

Publishers get paid by their distributors for books that were sold to bookstores 3-6 months prior. Any returns on those books are credited against the publisher’s next pay period. For the most part, this works just fine because publishers and their distributors are careful to weigh order fulfillment against demand.

For instance, if B&N corporate wants 15,000 units of a title for their warehouses, our distributor may give them 5,000 units. I know; it seems incredibly low. But a new title with low presales is an untested entity, and we aren’t sure where it’s going to fall out. In order to protect our financial solvency, we’ll send out fewer numbers. If the title shoots to the moon, our distributor can easily send out more units. Conversely, if the title has a so-so sell through, our liability is lessened because we have fewer returns six months later due to the fact that we under-filled the original order.

However, with the Borders upheaval, we’re talking about publishers receiving 10, 20, 30 thousand units PER TITLE. Remember, the sales for many of these books being returned have already been paid to the publisher. There simply isn’t enough buyer demand for ten thousand units to absorb those returns, so publishers have no choice but to write a check to their distributors. Predictably, this will be a huge financial burden, and many will have little choice but to go out of business.

We’ll weather this particular storm because we’ve seen it coming for a long time and made a lot of adjustments. Many, however, didn’t, and the belt tightening is going to spread everywhere. And, yes, authors will be affected.