is the fifth posting in my series summarizing my remarks in a panel discussion
on the “Ins and Outs of Self-Publishing” sponsored by the Washington, DC chapter of Women's National Book Association.
In Parts One and Two of the series, I discussed using a traditional publisher and self-publishing using print-on-demand (POD) printing. In Part Three, I discussed publishing via vanity or subsidy press and in Part Four, I shared some self-publishing-via-subsidy press success stories. In this Part Five, I discuss self-publishing by working directly with distributors and wholesalers.
Wholesalers fulfill orders from bookstores and libraries and (typically) do no promotion for your book. Ingram is the largest bookstore wholesaler. Baker & Taylor is the largest library wholesaler. Typically, they purchase your books at a 50 – 60%+ discount and pay in 90 days on a fully returnable basis; however, some small publishers have negotiated more favorable terms. Your relationship with a wholesaler is non-exclusive.
Exclusive Distributors for self-publishers include Biblio, Independent Publishers Group (IPG), Midpoint, and Partners Book Distributing. You deliver completed books to them. They handle sales, warehousing, invoicing, and shipping and pass onto you about 40% of the book’s cover price. The percentage you receive might alternatively be expressed as a percentage of the distributor’s net sales. Although distributors do some marketing (such as a catalog and sales visits to chain bookstores), the self-publisher maintains primary responsibility for creating demand. Working with a distributor rather than a wholesaler removes some of the administrative tasks (invoicing, processing orders and returns) associated with working with wholesalers like Ingram and Baker & Taylor.
The advantages to working with wholesalers and distributors is the potential of better distribution. While it is fairly easy to get your book into an online bookstore (e.g., amazon.com advantage program buys on consignment at a 55% discount) without a distributor and/or wholesaler, it is difficult to get your book into a retail bricks & mortar bookstore without them. However, even when your books land in the bricks & mortar bookstore, you still have to work to get customers into the bookstore to purchase your books.
Disadvantages to working with distributors and wholesalers include the larger upfront investment for an offset print run of 1,000+ copies. Another downside to going this route is concerns about the long-term financial health of your distributor. Distributors typically pay 120 days after sale of the book. If your distributor declares bankruptcy, it places your receivables and potentially your book inventory at risk. It also leaves you in book distribution limbo.
In today’s publishing industry climate, distributor bankruptcy is a legitimate concern. A number of distributors have experienced financial difficulty over the last year: Publishers Group West (PGW), which distributed books for more than 130 independent book publishers, went under in December 2006. PGW was actually doing well as a division. Its parent company, Advanced Marketing Services (AMS), is the entity that declared bankruptcy. As a result of AMS’ bankruptcy, PGW's assets were frozen which included its clients book sales for the last quarter of 2006. Ultimately, the Perseus Book Group took over the majority of PGW's accounts, paying the publishers 70% of what they were owed by PGW. Perseus’ take-over was a lucky break for the former PGW publisher clients who could have lost all those receivables.
More recently, Bookworld, a distributor for about 100 small publishers, closed its doors and Biblio, the small press division of National Book Network, announced that it will be downsizing and whittling down its list of 450 small presses over the next several years.