Quote:
Originally Posted by HappyMartin
But what of all the books that don't sell? Suddenly the price of printings, distributing, removing from shelves and returning, warehousing and pulping is not offset against a sale. It is added to the costs of doing business and must be borne by the books that do sell.
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When we talk about changing the way publishers do business, this is among the things that *will* change. And soon.
The Vynil LP business used to be the same way; the record companies would automatically take back any returns from retailers for full credit because, most of the time, it was their fault. Stamping vynil simply wasn't precise enough and shipping or storage variances could deform it. The cost of the returns was "baked in" to their pricing.
Then CDs came out, LP sales started to decline, returns started eating up too much of the costs... and since CDs were leading people to re-buy old releases, the studios decided to "encourage" CD adoption: they stopped taking returns. Within 6 months most record stores were CD outlets. Much grumbling followed. The world didn't end.
The only reason publishers deal with returns/remainders/warehousing/pulping is because that is the way it's always been done. There is no law of man or nature that demands it. It is sheer inertia. No other manufacturing business is structured that way: because it isn't necessary. It is pure inefficiency.
Want to do away with returns? (and, make no mistake; the day isn't far off when the BPHs do this) Print *less* copies on spec. Do market research, hold retailers to their orders, encourage consumer pre-orders, do just-in-time print runs, do print-on-demand... There's a dozen ways to *think* your way past this dated (and expensive) business practice. Most manufacturers of other *products* figured it out so the BPHs don't even need to be original. They can just copy the best practices of others. (Music, video, game publishers just for starters.)
Now, they can be proactive and do it wilingly because it makes business sense and fortifies their bottom line, or they can wait until pbook sales volumes decline to the point where returns overwhelm their bottom line.
As Mr Shatzkin himself has pointed out, in several narrative text categories, and for several publishers, ebooks *already* make up over 50% of the sales volume. He also points out that the expectation in most market is that B&M retail space will be shrinking by 40%. (40% less retail sale volume).
http://www.idealog.com/blog/extendin...shly-difficult
He has also pointed out that online, non B&M book sales (p- and e-) *already* make up 50% of most book sales.
http://www.idealog.com/blog/by-one-b...the-revolution
So, not only are returns not necessary for 50% of the business *now*, the need for returns is going to decline further. There are no valid excuses for the practice; inventory management is supposed to be a core retailer competence of modern retailers.
At the top of the list of unnecessary BPH costs (right there with the Manhattan glass towers and golden parachutes) return costs are the easiest to dispose of and a perfect example of how the BPHs can help themselves by changing their outdated practices.