Signing with Distributors

Just one more comment on the issue of exclusive trade distributors. We happily work with one today, but it took us three tries. Early in our history as a publisher, we had two very unfortunate episodes with distributors. (In both cases, reputable distributors, both of whom are still around today and highly respected in the industry.)

In the first case, we dropped the distributor because its sales reps were really not interested in promoting our books. It seemed like they weren't selling any more books than we would sell ourselves, and we were giving up 67% rather than the 40-to-55% we give when we handle the sales ourselves. That's a huge difference in cash flow.

In the second case, the distributor started out enthusiastic, but wasn't meeting sales projections so they dropped us.

After that, we went through a long period of selling far more books ourselves, including sales through bookstores, than we had done before through the distributors. We did have the advantage of being able to sell directly to Ingram--through its regular program, which puts books on store shelves, unlike its LSI program which does not. It was, and is, very hard to sell many books to bookstores without Ingram as a full partner, although Baker & Taylor has made some progress in its efforts to sell to bookstores as well as to libraries, its main customer base. But again, we became more successful with our own direct promotions than we were with distributors whose sales reps weren't enthused about our books.

But then, just a few years ago, it got harder for a small press to work directly with Ingram in its regular wholesaling program. They began dropping publishers who didn't have at least $40,000 dollars a year in Ingram business (net, after subtracting their many returns). I generally publish no more than about three new titles a year, and sometimes they're good bookstore books, other times not, so in some years I slipped below that tier. At that point, I signed on with another distributor, Midpoint, which turned out to be a good match. Trade sales are a diminishing percentage of my book sales, because fewer people buy books in stores, but still an important part of my business. I'm very pleased to have Midpoint taking care of trade sales, despite the steep discounts, the massive returns, and the long waits for payment that are inherent with every distributor. That leaves me free to focus on direct and special sales, which have a higher rate of return.

Anyway, for newer publishers just starting to explore these issues, what you need to know is that a contract with an exclusive distributor is like a marriage. Don't commit yourself unless you are really excited about them, and they are really excited about you and your books. Many publishers are far better off on their own. And beyond the cut the distributor gets, you have to consider the pain you'll go through if the relationship ever ends, either because you drop them or because they drop you. That will guarantee a period of months, or longer, during which there will be no trade sales at all.

And I haven't even touched the pain felt by the hundreds of publishers who have been left holding the bag when their distributors went bankrupt. Their tales are far scarier than anything we went through. Be sure to check the financial stability of any distributor you sign on with.

That doesn't mean you shouldn't sign on with a distributor. For some publishers, having a distributor has meant selling a million copies of a book instead of a mere hundred thousand. But proceed very, very carefully.

James A. Cox
Editor-in-Chief
Midwest Book Review
278 Orchard Drive
Oregon, WI 53575-1129
phone: 1-608-835-7937
e-mail: mbr@execpc.com
e-mail: mwbookrevw@aol.com
http://www.midwestbookreview.com

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