Bookstore Distribution – You think that you have problems?
The demise of Biblio Distribution has some lessons for seasoned and rookie authors and publishers alike. That’s why I’ve written the following open letter to the president of Biblio’s parent company, National Book Network (NBN), a company that continues to try to drag down with it some of the small publishers formerly associated with Biblio.
AN OPEN LETTER TO THE PRESIDENT OF THE NATIONAL BOOK NETWORK (NBN)
IN REFERENCE TO THE DEMISE OF BIBLIO DISTRIBUTION
Jed Lyons
President, National Book Network (NBN) July 4, 2008
4501 Forbes Blvd.
Suite 200
Lanham, MD 20706
Dear Mr. Lyons,
This June, I signed for a registered letter from Thomas J. Hunt Jr., NBN’s director of publisher Accounting, demanding a payment from Solving Light Books of $34, 424.81, purportedly in accord with Solving Light Books’ contract with your now defunct small press distributor, Biblio.
As an author and businessman, I had to ask myself what I did wrong to incur such a huge alleged debt from a book distributor. I have thought very carefully about this. My conclusion: all I did during the term of Solving Light’s contract with Biblio was follow the advice and lead of Biblio employees under your
supervision—employees for whom you were responsible.
In January or February of 2005, one of Biblio’s employees, who still works for you at NBN, arranged to have my book, The Parthenon Code: Mankind’s History in Marble, selected as one of the five top small press books of the year by Barnes & Noble. This meant, she said, that my book would be on display, with the others so chosen, at the entrance to all Barnes & Noble stores for the entire month of March as part of Barnes & Nobles’ celebration of Small Press Month. I was thrilled. Barnes and Noble ordered about 2400 copies of The Parthenon Code.
What your Biblio salesperson did not tell me was that the other four books were print-on-demand or small print-run books, and their authors could not supply inventory for the stores. So the displays did not materialize as planned. “Small Press Month” was a flop, although I had been told by your salesperson that it would be a “huge deal.”
While I was still in the dark about the reality of this, the same Biblio salesperson told me Barnes & Noble would place another large order (1200 – 1800 as I recall) if I gave them a discount. I was thrilled again and agreed. In order to meet the new order, I printed 5,000 more hardback books at a cost of over $23,000. Printing any less would have meant an unacceptable unit cost.
About a year later, for about four months in a row, Solving Light Books began receiving checks from Biblio totaling about $28,000 for what the Biblio record indicated was the sale of The Parthenon Code at Barnes & Noble. I was still very much in the dark about what a farce “Small Press Month” had been. I had no reason to doubt what your Biblio salesperson had told me about what a “huge deal” it was, and at this point, seemingly had been. The money was income for Solving Light Books, and it has been spent. No employee of Biblio ever suggested that I put such income in an escrow account in the event Biblio’s sales and accounting systems turned out to be hopelessly flawed.
The books I received payment for had not, in fact, been sold. Most of them hadn’t made it to a store display or the shelves. Barnes & Noble began returning them to Biblio from its warehouse. That $28,000 plus roughly $6,000 in storage fees for books that but for the bad advice of your salesperson, need not have been printed at all, makes up the money you wrongly claim Solving Light Books owes you.
Biblio should never have paid me for books that did not sell, giving me the false impression that they had, in fact, been sold. Before Biblio went under, one of your Biblio accounting employees kept dunning me, and even threatened me with a law suit—quite obviously doing what you had told him to do. During a
telephone conversation, I asked him, “If you were I, an author and publisher, would you ever have expected your distributor to demand the return of thousands of dollars?” His answer was a candid, “No.” How is it possible for a small publisher to run a successful business not knowing whether payments from his distributor are bona fide?
Another of your Biblio employees (still working for you at NBN) was responsible for keeping The Parthenon Code out of Christian retail channels for more than a year. Ingram, the country’s largest wholesaler, stocked my book. I asked your representative to get it carried by Ingram’s Christian counterpart, Spring Arbor, since The Parthenon Code has a large Christian market (It says on the cover, “A Startling Testament to the Validity of Scripture”). She told me on several occasions, over a period of months, that she had tried, and was trying, but couldn’t do it. I asked her for the names and addresses of the decision makers at Spring Arbor, but she refused, saying that only the distributor (Biblio) was authorized to deal with the wholesaler. She informed me that it was a bad idea for me to try to contact Spring Arbor myself.
In the meantime, I spoke with the head of a newly established Christian book distribution company who had formerly worked in Biblio’s senior management. I got the feeling that his departure from Biblio stemmed from his disagreement with its management policies and decisions, and that he foresaw its eventual decline and demise. He told me it was very simple to have an Ingram book also made available to Christian retailers as a Spring Arbor book. “All they have to do is B-code it,” he told me.
Defying the warning of your employee, and with some effort, I contacted the decision makers at Spring Arbor myself. They made The Parthenon Code available as a Spring Arbor book within a week. Instead of helping me, your employee had actually interfered with sound and profitable distribution of my book through that Christian wholesaler.
There is an underlying assumption in our contract that each party will behave with sanity and competence. Biblio’s policy of allowing retailers, such as Barnes & Noble, to order books on what amounts to an unlimited consignment basis is crazy. It can’t work. It didn’t work. The two Biblio employees with whom I dealt did not exhibit competence in their relations with me and my publishing
company. Your employees and your failed policies are responsible for the debts you are wrongly trying to collect from me. Again, what did I do but follow the advice and lead of Biblio employees for whom you were responsible?
Biblio as a distributor is a shipwreck. You know better than I the mismanagement and bad accounting practices that led slowly and surely to its sinking. My question to you, Jed Lyons, is this: Why are you trying to drag down Solving Light Books and other small publishers with it?
I am publishing this as an open letter as part of the Publishing Basics Newsletter in the expectation that other small publishers and those thinking of becoming such, will see the risks of becoming involved with organizations such as Biblio, think twice about such involvement, and consider other, actually profitable ways to distribute their books.
Yours truly,
Robert Bowie Johnson, Jr.
Sovling Light Books
www.solvinglight.com
July 8th, 2008 at 4:07 pm
Small publishers and self published authors need a new business model. My approach is that I *sell* books. PERIOD. I do not lend them, consign them, rent them, give credit terms, or ship before payment. And I accept no returns. Books are guaranteed of course against defects and will be replaced should they arrive damaged.
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Authors using POD companies also need to be careful about returns and be care that they do not use a vanity press that allows returns or ships on consignment or has other chargeback exposure.
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You pay cash up front and then I ship books. That is my business model. I do give *big* discounts, and bigger for larger volumes of SOLD (and PAID for) books, but the tradeoff is that I have a guaranteed profit in hand with no risk of returns, especially of damaged books, or of bankrupt/crooked distributors, nor can my cash flow be manipulated by bogus orders.
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I have a separate isbn for amazone/booksludge editions with an extra high list price so I can maintain *my* profit in spite of amazone’s humongous discounts and assorted extra fees. I also print a warning that defects are the responsibility of amazone/booksludge and not my publishing company.
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Whoever is in the small/self publishing biz needs to be wary of the other players who are out to make a profit for themselves and do not care about what happens to you. Due diligence is mandatory, and a lawyer should be involved to check on pitfalls in contracts.
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July 8th, 2008 at 4:18 pm
Thank you so much for making this available to read. I have not yet entered the market with my work, but I think it will help me act with more wisdom when I do. I used to work for Barnes and Noble, and I remember a lot of returns. I also remember them saying the store always got its money back for any unsold books, and I remember learning that when a book boasts “so many thousand copies sold,” it does not mean they ever left the store in customers’ hands. It means they were bought by the bookstore from the distributor or wholesaler and merely got INTO the store. Now it makes much more sense to me. Perhaps POD is a better way to go, such as Lulu? I wonder…
July 8th, 2008 at 4:33 pm
No offense intended, but anyone who doesn’t know about the hazards of bookstore returns has no business distributing to bookstores in the first place.
My self-published novel CORDITE WINE was nominated for the Private Eye Writers of American Shamus Award in June 2006. This was my third nomination, but the first one I had received since my company (Back Alley Books) had been approved for stocking by Barnes and Noble. I was thrilled to receive another nomination, but I also cringed because I knew that B&N would be ordering this title by the truckload.
I also knew that Barnes and Noble is staffed mostly by glorified WalMart clerks who know virtually nothing about literature, and for certain have never heard of either me or the Shamus Award. I knew that not one clerk in a Barnes and Noble anywhere was going to lift a finger to hand-sell my books, because they don’t hand-sell ANYONE’S books.
Because of all this, I also knew that I was going to get slaughtered on returns. What was I supposed to do, though? Pull my book from distribution?
I got hammered early in 2007, exactly as I expected. Boxes upon boxes of returned books began to accumulate in my home office. Thankfully, a large percentage of them were still salable. Those that weren’t were put aside for donations to charities, etc. When all was said and done, I owed my distributor (Ingram), an amount in four figures. Took me months to pay off, even after I had put aside the money I had received from the initial sales, sure in my knowledge that I’d be seeing those books again.
Small Press Month was, as you stated, a farce, but it really wouldn’t have mattered anyway, because – as I’ve already stated – B&N doesn’t hand-sell books under any circumstances. They could have put up a dozen displays in each store, but if nobody makes an effort to tout your work nobody is going to buy it.
The so-called “unlimited consignment” in the retail bookselling business has been an industry standard for decades, at least since the Great Depression. In most cases, the chains do pay for books they buy, but only after 60-90 days. Even after that, they retain a permanent right to return those copies for refunds or credits on future orders. The publisher will always owe more for returns (per unit) than they received for the sale of the book, because the distributor offers the bookseller a smaller percentage discount than it charges the publisher.
Until the major publishing houses put their collective feet down and refuse to honor those returns, this will continue. Nothing ever changes in this industry without the major houses’ permission. It wasn’t Biblio’s responsibility to spell all this out for any of their customers – it’s simply understood that this is the way American booksellers do business, and distributors assume that anyone who approaches them requesting their services understands this.
It’s a real shame you got stung, and I sympathize with you, brother, but it sounds very much as if you didn’t completely understand the rules going in, or how major chain bookselling operates in this country. I hope I am wrong, but I strongly suspect that you will not find Mr. Lyons very interested in offering you any consolation or – for that matter – compensation. As I understand the bookselling biz, you’re on the hook for the 34k.
Hi Richard. I sympathize with your bad experience with Barnes & Noble, but mine was a bit different.
The Biblio representative presented to me as a fact that my book, THE PARTHENON CODE, would be on display with four other books at the entrance to 2,000 Barnes & Noble bookstores for the entire month of March. Had Barnes & Noble actually “celebrated” Small Press Month as the Biblio rep had told me they were going to, I’d have sold somewhere between 2,000 and 10,000 books based on the location of the display alone. THE PARTHENON CODE is an important book, dealing with a universally recognized subject. The Greek translation is in its second printing. The recently published first French printing is selling well.
Had the Biblio rep told me that Barnes & Noble would order 2,400 books, and all I needed to spend $30,000 on advertising to drive buyers to the store, I’d have never accepted that offer. I went for the Small Press Month offer because, according to the Biblio rep, Barnes & Noble was going to use its resources (creating a month-long, entrance display) to promote the sale of my book. All my decision-making was based on FALSE information I received from Biblio about the set-up and sales potential of the Barnes & Nobles’ small press displays . Thus, I was drawn into an agreement under false pretenses, and am not liable for the consequences. Biblio is.
Bob Johnson
July 8th, 2008 at 6:33 pm
I do not think you did your homework. Trade sales are returnable; it is industry standard. Biblio messed up big time, but, in a returns-based industry, you should have been aware of the inherent danger in such a large sale.
July 8th, 2008 at 6:43 pm
Wow, Robert! Thanks for the clear explanation of the situation.
July 8th, 2008 at 9:16 pm
Neighborhood Press Publishing Company Published my book “Flavors of Life” they were in ORange Park, FLorida when the book was published in 2001. They moved and I never heard from them. They have been selling my book through Biblio and at Target, Amazon. I have received no royalties and have had friends to order the book. I am really ready to file a lawy suit, however, I have no where about of Neighborhood press. I do however have the names of the publisher and know they were in the United States Navy. I am going to litigate for sure.
Dee Whitfield
July 8th, 2008 at 9:51 pm
Thanks for writing this open letter. We’re working on ways to navigate the bottlenecks.
July 9th, 2008 at 1:42 pm
I’d say that the fact that Bob may not have been completely informed as to how returns work, is probably the norm not the exception, especially for anyone dealing with the industry for the first time. Afterall, how many parts of the process are clear and easy to understand?
Terminology is not uniform even among experts/insiders (self-publishing being a huge culprit), the concept of “you don’t know what you don’t know” is extremely prevelent, and often the deeper you dig, the more overwhelming and confusing it gets.
I’m also fully aware that many authors skip doing the proper homework, however, even for those who do their best to do so, it is extremely easy to miss or misunderstand something.
I too thank Bob for posting this so others can learn, and I agree with Speedball, if I wanted to open a consignment shop, I’d do so, I plan to sell books.
July 11th, 2008 at 1:28 pm
I’m really sorry for your bad luck.
Your story is exactly why I haven’t sold to B&N and use only specialized distributors who pay after the return period has expired. Book returns are unprofitable for big publishers so I knew returns would kill my self-publishing business. No matter how tempting, I always tell self-publishers to stay away from the big box retailers unless they get a no returns contract.
I’ve frequently wished that B&N and Borders would have a different supplier process for it’s online stores so it could represent self-publishers the way Amazon does (though with better terms). This would be fairly safe for self-publishers and make the big box stores able to compete better with Amazon’s vast inventory of titles.
This industry is so crazy and I think stories like yours need to be published so that the industry will change in the future. Why the major publishers don’t enter the distribution game and ultimately form a coop-retail option is beyond me. They would make so much more money. Until then, I’ll keep selling my books to small bookstores and gift stores who are so refreshing to deal with. I go out of my way to provide superior customer service, marketing aids and autographed copies to all my retailers and it leads to many repeat orders and zero returns.
I wish you luck in resolving the distribution mess that could have befallen anyone in our industry. Best to put this mess behind you and get cracking on marketing to the Christian market—it sounds like that could be your book’s salvation.
Ellen Reid Smith
author, Cowgirl Smarts: How to Rope a Kick-Ass Life
July 13th, 2008 at 12:54 am
[...] had no idea this could happen until I read an article posted in Publishing Basics. I knew about return policies but never knew distributor’s or bookstores would even ask for [...]
September 20th, 2008 at 8:54 am
Hi, thanks for this posting.
I’ve had about a dozen trade books published over the last 15 years by John Wiley and Sons (a few in their “For Dummies” series) and a couple other smaller publishers, and only recently have I started pursuing my own small publishing company. During those 15 years of working as both a writer and editor, I’ve learned a great deal about how the publishing world works. And the problem of returns is a fact of life, unfortunately, and I’m glad you’re sharing this with readers who, without much experience in the industry, are thinking of starting their own publishing business. I learned early on that when a book is said to have sold millions of copies, that is, in fact, a sale to the bookstore. When I get my royalty statements from Wiley, I’m well aware that the numbers are sales to bookstores, and they may be sitting on the shelf–and, unfortunately, eventually returned. (In fact, the royalty statements always have a “reserve against returns” where the publisher holds a certain percentage of your royalties to hopefully guard against returns.)
They say that before you open a business, you should have spent time working in the business so you understand it. Although I’ve had ideas for some cool restaurants, I would never do it because I’ve never worked in a restaurant and therefore don’t know the business.
Now I would never suggest that somebody not start their own publishing company. But this is a business like any other business, and you really need to know the ropes. Fortunately, sites like this one can teach you hopefully what you need to know. But please, everybody, make sure you study and learn as much as possible before opening a business, whatever it may be.
And as such, I’ve made the business decision that the books I’m self-publishing won’t be in bookstores. Period. It just won’t happen. I’ve had a few readers showing interest in the books (which aren’t finished yet, incidentally) ask me about bookstores, and each time they ask, I reconsider. But it always comes back to the problem of risk. And I decide it’s not worth it. I’ve had a few younger people (high school, college students) ask about my book because they don’t have credit cards and can’t order the book. They want to pay in cash at a bookstore. But I can’t do it. But that’s business; if I lose a sale or two, that’s just the way it goes. It just isn’t worth the huge, huge financial risk. (But for those few people who ask me about it, I’ll offer to let them send me a personal check and I’ll ship out the book, even before the check clears. I can afford that small risk if the check bounces, and then I’ll have one more happy reader.)
Good luck to everyone and thanks to the Bob and the others here for having this blog to help teach the ropes,
Jeff