I received an e-mail newsletter the "Remainder News" from Bargain Book News yesterday, unsolicited. Maybe they got my e-mail address from the PW newsletter I subscribe to, maybe from another professional association, but it provided an interesting look at a business I usually ignore. Remainders are a necessary evil in the traditional publishing world with their large offset printed book runs. Big publishers can't sit on inventory forever (sometimes they can't wait three months) and I suppose it's better those books get a second chance at readership before they get pulped or landfilled. It's just a cost of doing business for publishers, and it creates a business opportunity for bargain book specialists, but it's all pretty painful for the author.
The Remainder News featured a big story about ABE Books, one of the premier Internet booksellers, so I popped over to the ABE site for my first visit in a while, and did a publisher search on Foner Books. Lo and behold, of the 30 copies available through their network, the cheapest one was priced a dollar ABOVE my cover price. That's a dollar more than the book costs new on Amazon or Barnes&Noble.com or ordered through your local bookstore. That's what I call good remainder news.
The reason my titles aren't available at bargain book prices anywhere are twofold. First, I never sell them at bargain book prices because I want to make a living. Second, nobody can buy them at bargain book prices from distribution, because I assigned a short discount of 25% at Lightning Source. One of the side effects of this approach is that my books all end up having a high resale value on Amazon, I've seen them sell as used for just a dollar below the cover price. It's just a different business model.
The sad truth about the traditional publishing industry with their pulp-and-remainder model is that many books never get a fair chance to succeed. There can be numerous reasons for a new book to get off to a slow start, especially if the publisher marketing is mistimed, misplaced, or totally absent. Unfortunately for traditionally published authors, as soon as some retail chain pulls the book and the publisher panics into remaindering them rather than accepting them back at the warehouse, the game is half over. Those remainders rapidly appear on Internet book sites, including ABE and Amazon, and cannibalize some percentage of new sales that would have otherwise occurred. This feeds back into "the book is failing" logic, creates more remainders, and depresses prices even further, making the bargain book option even more attractive to potential buyers.
One of the beautiful things about self publishing is the author controls the remainder cycle, including whether or not that cycle ever begins. If you control your inventory with print-on-demand, there's never a reason to consider selling bulk lots to remainder houses, just don't print them. Your titles will remain commercially viable longer, you'll save a couple trees and ink creatures, and your bank account will thank you.
Bargain Books and Remainders Bad Deal For Authors
Trade Publishers Buy Self Published POD Titles
Every month or so I get a question from an author who has one major worry about self publishing with print-on-demand - whether the "stigma" will prevent a major trade publisher from purchasing the rights to their title down the road. If the author is talking about paying a subsidy publisher to publish his book, there may be some complications with the contract if it included rights, and it will be more difficult to get a trade publisher to take the book seriously unless sales are in the 5,000+ range. On the other hand, if the author is talking about becoming a true self publisher, purchasing his own ISBN block and signing up with a print and distribution provider like Lightning Source to do the heavy lifting, most trades will be happy to acquire the rights to a book if it fits their plans.
I've self published three titles with print-on-demand and I've received trade offers on all of them, some multiple times. I haven't solicited any of the offers, they've all come from acquisitions editors who've seen my titles ranking well on Amazon or encountered them while doing market research for a new title or series of their own. However, this year was the first time I got an offer for my entire list. I was initially a little annoyed with the offer, thinking, "If this guy had read anything on my site he'd know that I'm not some wide-eyed newbie waiting for a trade to knock on the door," but I decided to hear him out and maybe educate him a little in the process. The following is an edited version of my reply to his offer. My bits are original, I've paraphrased his lines to make them clear and because I've left out much of his original prose. AE is Acquisitions Editor, MR is Morris Rosenthal:
AE: You must be receiving far more returns than you would with a traditional publishing house.
MR: You meant fewer, I'm sure. My return rate is well under 1%, and the truth is, most publishers using POD simply don't accept returns. At a short discount, it doesn't make a difference since nobody orders without an order in hand.
AE: On the other hand, our distribution would bring you a much larger audience.
MR: I've had offers to distribute my books from McGraw-Hill, for whom I author one title. Economics never made sense, they wanted 30% of net, and I didn't want to print a lot of books and get returns.
AE: You have to ask yourself if your titles sales would grow significantly from being in the chains and independent bookstores.
MR: Answer is, I believe not, but thank you for asking. I've had a "bestseller" with a major trade, around 150,000 copies sold, wasn't impressed.
AE: We'd likely offer you our standard contract to new authors: a $2,000 advance on royalties and royalties of 14% of net. How does this fair against your agreement with Lightning Source.
MR: Ah, read my case study at http://www.fonerbooks.com/pod.htm and replace 35% with 25%. I net around $8.00 on a $14.95 cover price. Always interested in hearing offers, but I suspect I have a better chance of talking you into Lightning Source than you have of talking me into returning to authoring for a royalty. If you have any questions about the Lightning Source model, feel free to ask. BTW, if you read between the lines of the top 10,000 books on Amazon, you'll find plenty of Lightning Source titles from small publishers and self publishers.
The AE's reply to this was:
AE: Thanks, Morris. Best of luck to you. Sounds like you've got self-publishing down.
The amusing thing about the exchange, to me, was the AE wasn't just looking to acquire all of my titles, he was looking to get them on the cheap! Last three advances I got in the trade were all above $10K, with some of the cash showing up before I even started writing the book. This outfit was "tempting" me with $2K per title and 14% of net for titles I'd already published and proven. Sounds like a pretty good way to cut my income by about 75% while giving up control, devaluing my business and seeing my titles get remaindered early.
If you get an offer from the trades, keep in mind that they probably haven't done their homework. Oh, they might have a notion of how many copies they might be able to sell a year, and they might even share that number with you, though you'll probably be hearing the high end of the range. What they won't have done is sat down and figured out how much money you are likely making in your publishing business and what sort of offer they'd have to make for you to take them seriously. They have the tools to do this, it's not a lot of work, but they expect you to roll over with your paws in the air and beg for a bone
Small Publishers SHOULD Think Small
I've decided to separate my blogging about publishing into two streams, an Amazon related stream and a business/market stream. I'm keeping the business and marketing side of publishing here, and I'll continue obsessing about Amazon on my Rank Economy blog.
I've been having a lengthy correspondence recently with a new publisher whom I think got a little carried away with the big picture before selling his first book. That's alright, I did the same thing. In fact, I was so focused on how the big trades did things when I started out self publishing that I wasted the original subtitle of my first book on a branding effort. I was going to achieve fame and fortune through branding my blunt style of books as "The Unembellished Guide." I even had the perfect book cover design, I thought, a scan of a brown paper bag. Sales for that book picked up appreciably when I got rid of the branding subtitle and replaced it with something more descriptive.
Many a splendid public speaker has earned millions telling people that they need to think big. It's a positive message, easy to sell, just call anybody who doesn't agree a naysayer or afraid of success. The problem with thinking big is that by definition, it can only succeed for a very small proportion of businesses. There's only so much room for so many big success stories. In my humble experience, the only reason public speakers hit the road to talk about how they got rich by thinking big is that they found their original idea was a one trick pony, a show that could never be repeated, so the only asset they have left is the sales pitch.
If you take a careful look at the book market and put the Dummies and Idiots of the world out of your mind, you'll find that the most powerful branding in publishing is the author. Oddly enough, this is true for fiction as well as nonfiction, and there aren't that many general principles that cut both ways in publishing. Sure, there are Chilton's auto repair books and other branded series, but they have the brand as a result of publishing all of those books and getting them into auto parts stores, not the other way around.
If I could have a rule attributed to my name in the publishing business, it would be - "First, lose no money." Losing money publishing books is stupid if you're in business. There's no glory in giving it your best shot and failing if your best shot is throwing a lot of money at consultants and contractors to do work for you, and giving up when your spouse threatens divorce. If you start your publishing company on a shoestring and you don't blow cash on over-designing your "masterpiece" or buying advertising in the place of working at marketing you won't lose money. You may not get rich, but you can't lose what you don't spend. The successful small publishers I know, who are many, are all somewhat surprised by their success, myself included. That's because we all thought small, spent small, and with every incremental sale and title saw our bank accounts and tax burden grow.