Monthly Archives: January 2016

Let’s Start a Revolution to End Returnability!

Kim Staflund: founder and publisher at Polished Publishing Group (PPG) and author of the PPG Publisher’s Blog

Kim Staflund: founder and publisher at Polished Publishing Group (PPG) and author of the PPG Publisher’s Blog

Through this blog post, it is my goal to open up a sincere dialogue between everyone involved in the book supply chain from authors, agents, and publishers of all kinds (trade, vanity, hybrid … from the smallest independents to the corporate giants) to the printers, distributors, wholesalers, and retailers that help us create, move, and sell our books to the masses. I want to talk specifically about book returns.

SOMETHING’S GOT TO GIVE

One of the most costly and troublesome practices in the world of book publishing is an archaic book return policy that detrimentally affects net profits for both publishers and authors alike. When a publisher marks its books as “returnable” for wholesalers and retailers, it is giving them the right to return those books, at any given time, for a full refund if they’re unable to sell them—regardless of whether those books are stickered with price tags or a bit scuffed from being handled by various people. 

This practice has always bothered me, right back to the days when I worked for a small literary publisher in Canada over twenty years ago. I’ve never understood why things were (and still are) done this way, so I went in search of an answer and came across a well-researched book by John B. Thompson titled Merchants of Culture: The Publishing Business in the Twenty-First Century that provided an answer. Here is what John’s research found:

“The practice of allowing booksellers to return stock for full credit has a long history in Europe but was used rarely and half-heartedly by American publishers until the Great Depression of the 1930s, when publishers began experimenting seriously with returns policies as a way of stimulating sales and encouraging booksellers to increase stockholdings. In spring 1930, Putnam, Norton and Knopf all introduced schemes to allow booksellers to return stock for credit or exchange under certain conditions, and in 1932 Viking Press announced that orders for new books would be returnable for a credit of 90 per cent of the billed cost. …The practice of returns subsequently became a settled feature of the book trade and marks it out as somewhat unusual among retail sectors.

For decades, by continuing on with this practice, we’ve inadvertently trained the traditional wholesalers and retailers that they call the shots with regard to how (and at what price, in some instances) we should sell our books. As a result, it is next to impossible to convince any bookseller to carry even a small physical inventory of our books in their stores unless those books are marked as returnable and/or priced ridiculously low.

FEEDING “THE GODDAM BEAST”

To be blunt, I won’t play this game. I mark all of PPG’s authors’ books as non-returnable (my own included) to protect them from the crippling financial repercussions that are caused by returns; and, instead, I now teach authors how to sell audiobooks, ebooks, paperbacks, and even hardcover books online so they can better control their net profits. As I read more of Thompson’s book, my own views and policies in this regard were vindicated by the realization that other English language trade publishers, both large and small, in both the UK and the US, share my frustrations:

“…even if the book sells well, they are likely to be faced with high returns, at least 20 per cent, possibly as high as 50 per cent, which will be credited to the retailer and deducted from their receivables by their distributor, though they still have to pay the printer’s bills. ‘We call it “feeding the beast”. You have to feed the goddam beast and it just doesn’t work.’ As the returns come back they undo much of the gain they thought they had achieved with a book that seemed to be selling well… High returns are costly for publishers. Not only is a great deal of time and money wasted in packing up and shipping books that are never sold, and then packing up and returning them to the publisher’s warehouse, but printing books that are eventually pulped is wasteful and expensive, and the cost of writing off unsold stock goes directly to the publisher’s bottom line, depressing still further a profit margin already under pressure. …high returns which put downward pressure on margins is the price paid for adhering to this traditional distribution model. Improving supply chain capabilities and the ability to forecast consumer demand are important steps forward in the struggle to deal with the problem of returns, but they are really tinkering at the edges. ‘The physical side of the business is as broken and inefficient today as it was 15 years ago,’ commented one COO who joined a large house in the mid-1990s and has spent much of his time since then trying to deal with this problem. …there is much about this dynamic that could be regarded as illogical, irrational and inefficient, not to mention wasteful.” 

If so many publishers feel the same way as I do about this antiquated book return policy, then why are they still playing the game? Isn’t it time to stop?

THERE’S MORE TO DIGITIZATION THAN JUST EBOOKS

Booksellers, we as publishers and authors need you. And you need us, too. We’re all essential components of this evolving book supply chain that is increasingly influenced by digitization. Thompson discusses this in his book, as well:

“…the same trade house that had seen ebook sales grow by 50 per cent in 2007 now saw its ebook sales leap by 400 per cent in 2008. This was a sudden and dramatic change. … The upward surge in ebook sales both continued and accelerated throughout 2009 and 2010. …Will ebooks become 30 per cent, 50 per cent, even 90 per cent of publishers’ total sales in the next few years? The truth is, no one knows. Most people have an opinion but no one knows a thing. ‘I wish I could give you wisdom,’ said one CEO in 2011, speaking with unusual frankness, ‘but I have no idea. The consumer will act to define this – it won’t be defined by Amazon or Barnes & Noble or Apple or us…” 

It is possible that, one day, ebook sales will dominate over paperback and hardcover sales. But it is important to understand that “digitization” refers to much more than simply ebooks … and this will affect traditional wholesalers and retailers just as much as it affects publishers and authors.

The truth is, with the advent of short-run digital printing (SRDP) and print-on-demand (POD) technology, it is less and less necessary for publishers/self-publishers to print large runs of books or carry any physical inventory whatsoever. We can simply offer a link to the digital files of our paperbacks and hardcovers on various ecommerce sites around the world so that, when a consumer clicks on that link to purchase the book in whatever quantity, that triggers the site’s digital printer to print, bind, and ship that exact number of copies straight to the consumer’s designated ship-to address.

Times have definitely changed in the book business, and they continue to change at a rapid rate. Perhaps now is the time to start a revolution to end returnability once and for all by asking our traditional wholesalers and retailers to partner with us in different ways. Change your incentives! Adjust your current co-op programs to encourage consignment book signings and launches for authors inside your stores rather than using these programs for in-store placement of returnable books. Improve your ecommerce sites! Help us sell more of our books through your stores’ websites rather than forcing us to look for other online solutions due to unreasonable return policies. 

There are so many things we could do to help each other survive (preferably THRIVE!) in these turbulent times. Because, at the end of the day, the survival and future success of the traditional wholesalers and retailers depends as much upon us as we have always depended upon them. 

Related reading (even some traditional booksellers agree that “…Any rational business person looking at this practice would think the industry has gone mad.”): Quest for best seller means lots of returned books (2005)

Related reading: Why All Books Should Be Non-Returnable – By Angela Hoy (2005)

Related reading: Why All Books Should Be Non-Returnable – By Angela Hoy (2015)

Related reading: How to Price an Ebook

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As a user of this website, you are authorized only to view, copy, print, and distribute the documents on this website so long as: one (1) the document is used for informational purposes only; and two (2) any copy of the document (or portion thereof) includes the following copyright notice: Copyright © 2016 Polished Publishing Group (PPG). All rights reserved.

What Could Surrendering Your Copyright Potentially Cost You?

Kim Staflund: founder and publisher at Polished Publishing Group (PPG) and author of the PPG Publisher’s Blog

Kim Staflund: founder and publisher at Polished Publishing Group (PPG) and author of the PPG Publisher’s Blog

The CEO Magazine recently published a piece I wrote for their 8020 Blog titled Your Book is an Asset … if You Own the Copyright, and it generated many comments from both authors and publishers alike … some more passionate than others. The consensus was that it was too simplified, as though a more complicated explanation of copyright is somehow more acceptable to the masses. I disagree, hence this additional blog post on the topic.

Here is my personal belief: when people are unable to explain their topic matter to others in layman’s terms with ease, then they are either hiding something or they don’t fully understand it themselves. This is why I’m cautious when it comes to publishing contracts that are filled with complicated legalese. It is also why I challenge those who try to defend such contracts by saying, “It’s not that simple. There are different types of licenses. There are several factors to consider. Authors may be relinquishing some of their control, but not necessarily their copyright; or, if they are giving up their copyright, it may be only temporarily, not permanently.” And on and on.

Semantics. Legalese is confusing by design. I could utilize immoderately byzantine phraseology and labyrinthine reasoning with the best of them if I chose to, but that rather defeats the purpose of communication, don’t you think? 

I’d rather be clear and helpful. So, let’s keep it simple. Because, at the end of the day, it’s unnecessary to complicate this.

COPYRIGHT SIMPLIFIED (UNDERSTANDING PUBLISHING CONTRACTS)

  cop·y·right
/ˈkäpēˌrīt/

  noun
noun: copyright; plural noun: copyrights
1. the exclusive legal right, given to an originator or an assignee to print, publish, perform, film,   or record literary, artistic, or musical material, and to authorize others to do the same.
“he issued a writ for breach of copyright”
* a particular literary, artistic, or musical work that is covered by copyright.

  adjective
adjective: copyright
1. protected by copyright.
“permission to reproduce photographs and other copyright material”

  verb
verb: copyright; 3rd person present: copyrights; past tense: copyrighted; past participle:
copyrighted; gerund or present participle: copyrighting
1. secure copyright for (material).

As the original creator of your manuscript, you own 100 percent of all of the rights to reproduce, publish, sell, and distribute your words in whatever manner you see fit. Your manuscript belongs to you and you alone—from the moment you write it. It is only when you decide that you want to publish your manuscript into book format with the hopes that you’ll earn some money (or educate people, or entertain people, or whatever your personal reasoning is for publishing it) that some or all of the copyright ownership of that work might shift to someone else, depending on which publication method you choose. In other words, you might take a few different routes toward having your book published, and each of these book publishing methods affects your copyright ownership a little differently.

It is vitally important that you review a publishing contract in full before you ever sign it; and, if the contract before you is filled with a bunch of hard-to-understand language, then ask the questions you need to ask to ensure that you fully understand the agreement you’re about to enter into. Hold the company accountable for explaining it to you and putting you at ease. You have that right as one of their clients.

TRADITIONAL (TRADE) PUBLISHERS

Some authors will submit their manuscripts to a traditional (trade) publisher for consideration in the hopes that it will be published free of charge to them. What they might not realize is that whoever is paying for the publication of a book is the one who ends up with primary control over that book. Trade publishers don’t pick up the bill simply out of the kindness of their hearts. They are business people who are buying a product to try to turn a profit for themselves, and that “product” is the copyright ownership of your manuscript (whether permanent or temporary, whether full or partial—it varies with each contract and each publisher).

And fair enough! If I was paying for the whole thing, assuming all financial risk and responsibility for the project myself, then I would want majority control and ownership, too. That’s the only way I would be able to earn a decent return on my investment. So, this isn’t a criticism of the publishing model itself. It’s simply intended to educate authors about the true implication of publishing through this type of publisher. If someone else is paying for it, they own it. They control it. Plain and simple.

In this business model, writers usually retain only the basic publishing rights that recognize them as the author of the book and allow them to be paid a small percentage of the retail price in royalties (usually only up to 10 percent per copy sold, but it varies). The trade publisher keeps the rest of the profits because the trade publisher owns the book. Thus, as the owner of the book, that trade publisher also reserves the right to sell off additional reproductive (a.k.a. subsidiary) rights for additional profit down the road.

VANITY PUBLISHERS (UNSUPPORTED SELF-PUBLISHING FOR “INDIE” AUTHORS)

Authors who choose the vanity publishing route usually retain 100 percent ownership of their written words; however, if the vanity publisher has produced the cover artwork for them, (nine times out of ten, in my personal experience) that company usually retains the copyright of that artwork. This means that authors must always go through the vanity publisher to have their marketing materials and books printed.

A contract with a vanity publisher will usually also give that publisher non-exclusive online distribution rights throughout North America, the United Kingdom, Europe, and possibly the whole world. All this means is that the publisher reserves the right to sell and distribute copies of the book through its various channels for the duration of the contract; however, this is a non-exclusive contract; therefore, the author (and any other distributor designated by the author) is also free to sell copies of the book within those regions. If it were an exclusive contract, only the publisher would be allowed to sell the book online within those regions.

HYBRID PUBLISHERS (PROFESSIONALLY SUPPORTED SELF-PUBLISHING)

Last but not least, authors can also choose to publish through a supportive self-publishing house (a.k.a. hybrid publisher) where they will retain 100 percent copyright ownership of both their words and their artwork. Much like the contracts with vanity publishers, a contract with a supportive self-publishing house would also include non-exclusive online distribution rights worldwide for a specified term. This gives the authors much greater exposure without limiting their ability to sell wholesale author copies on their own wherever they choose to sell them.

WHAT COULD SURRENDERING YOUR COPYRIGHT POTENTIALLY COST YOU?

Eventually, once you’re selling lots of books and making a name for yourself with the general population, you’ll begin to see the true value of retaining majority (i.e., FULL!) copyright ownership—because this is when more business people will come knocking and asking to buy additional reproductive rights to your book. Maybe someone in Quebec will want to purchase the exclusive French language rights to your title so he or she can be the only one to reproduce, print, and distribute it in French to that region’s Francophone population for a profit. Maybe others will want to buy the exclusive North American film rights so that they can adapt the book for film in this region.

You can “divvy up” the rights to a book in so many different ways that it would be impossible to list them all here, but this gives you a very basic idea. It is simplified to provide an easier understanding.

What are all these rights worth? In any industry, a thing is worth what someone will pay for it. It could be worth millions to the primary owner of the book, so it’s a good idea to retain as much, if not ALL, of that ownership as you can right from the start. Then, when the movie producers and foreign publishers start calling, hire an intellectual property attorney to help you determine the best price for each sale of rights to each different buyer.

“I WILL ALWAYS LOVE YOU” BY DOLLY PARTON … A PRICELESS COPYRIGHT

Whether you’ve written a book, a movie script, or a song, the value of retained copyright ownership is much the same. It’s all intellectual property that can generate additional income through the sale of subsidiary rights.

Most, if not all of us are familiar with Whitney Houston’s cover of Dolly Parton’s song titled “I Will Always Love You.” What you may not be aware of is that, as the copyright owner of that song, Dolly gets paid each time a copy of it is made. She doesn’t have to lift a finger, and she gets paid.

Millions of copies of Whitney Houston’s cover of that song were made. And Dolly got paid on every one of them.

Retained copyright ownership of your intellectual property is potentially priceless. It doesn’t get any simpler than that.

Related reading: Your Intellectual Property is Priceless! 

Related reading: Authors, Keep Your Copyrights. You Earned Them. 

Related reading: Managing Intellectual Property in the Book Publishing Industry

Related reading: Copyright Ownership: Who Owns What?

Related reading: Subsidiary Rights: Acquisition & Licensing

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As a user of this website, you are authorized only to view, copy, print, and distribute the documents on this website so long as: one (1) the document is used for informational purposes only; and two (2) any copy of the document (or portion thereof) includes the following copyright notice: Copyright © 2016 Polished Publishing Group (PPG). All rights reserved.