AKGC 6172

PUBLISHING WORLD SEMINAR

CHAPTER 11: SALES AND DISTRIBUTION

INSIDE BOOK PUBLISHING
LECTURER
ASSC. PROF. DR. HAMEDI BIN MOHD ADNAN

REGHA A/P GANNESEN

AGA 150004
2015
DEPARTMENT OF MEDIA STUDIES
FACULTY OF ARTS AND SOCIAL SCIENCES
UNIVERSITY OF MALAYA
OVERVIEW

This much expanded fifth edition of inside book publishing, by Giles Clark and Angus Philips,
brings a publishing textbook to the market which punches through all the competition. The
journey from publisher to reader can take many paths. Intermediaries include distributors,
wholesalers, sales reps, bookstores, specialty stores, book clubs, and direct marketers.
Returns A defining characteristic of the book trade is that most books are sold on consignment.
In other words, wholesalers and bookstores, as well as most other retail outlets, are generally
allowed to return unsold copies of books to the publisher for credit. The result is significant risk
for publishers. A big chain's advance orders can lead to a larger print-run; but if the title sells
badly and is returned in large numbers, the publisher is left holding the bag.
Sales Reps and Bookstores
Bookstores and publishers traditionally operate according to a spring and fall season. The
publisher or distributor produces a new sales catalog for each season. The catalog promotes new
titles and authors, and it provides book price, ISBN, and cataloging information. Most catalogs
also include a backlist of previous in-print titles. The catalog can also be found on the company's
Website.
Traditionally, books are sold to a bookstore by a sales representative who either works for a
publisher as a salaried "non-commissioned rep" or with an independent sales group as a
"commissioned rep," who works for a distributor or a group of publishers. A sales rep's
responsibilities include:

Attendance at the publisher's seasonal sales conference--usually May and December--in

which the publisher and staff introduce the new sales catalog and books, and sometimes
authors, for the upcoming season.

Making appointments and calls on the "buyer" at each of the independent stores in an
assigned region. The book, its cover, or the catalog is shared with the buyer. The rep and
the buyer negotiate the number of titles and the retail sales commission (calculated as a
"discount rate" from the retail price). A buyer makes decisions in the same way a

publisher does. The book's design, the author, and local interest in the subject matter are
each factors that will persuade a buyer to take a book.

The rep relays the book orders to the distributor or publisher for invoicing and
fulfillment. If "advance orders" for a book are strong, and the book is not yet printed, a
publisher may choose to increase the title's print run.

Publishers find it advantageous to keep in touch with their reps and bookstores. Both stores and
reps appreciate updates on recent book reviews, author appearances, new promotional material,
and gossip.
Book Distributors
Although large publishers often offer their sales and distribution to smaller publishers, the term
"distributor" is used here to designate companies that distribute exclusively.
A distributor sells books on consignment, and generally pays publishers 40% of the list price for
each unit sold. In exchange, the distributor acts as marketer, warehouse, and shipping
department. It sells books to libraries, wholesalers, and bookstores by means of catalogs and its
own sales force. The distributor handles storage, fulfillment, invoicing, collection, etc., freeing
the publisher from all these worries.
Distributors generally represent independent publishers who can't afford a sales force.
Distributors tend to insist on exclusive distribution in one national market.

Wholesalers
Wholesalers serve as one-stop shopping centers for bookstores and libraries. They stock a large
variety of titles from all kinds of publishers, simplifying the purchase process for buyers.
Wholesalers do not employ sales reps as they are passive sellers, relying on their catalogs,
warehouse displays, and microfiche--as well as the marketing efforts of publishers--to make their
sales. For self-publishers without a book distributor, getting a book listed with a wholesale
catalog is one of the few ways to achieve nationwide exposure and access. Ingram and Baker &

Taylor, which dominate the national market, generally ask publishers for a 55% discount, 90
days net, and all books being returnable.

The Web
Today it's easy and inexpensive to put up a Website where the publisher can both promote book
titles and take orders. One common approach today is to refer your readers to Amazon.com or
any other online retailer. The retailer will invoice the buyer, ship the book, and pay the publisher
a commission.
Online booksellers are a small but rapidly growing segment of the retail market.
Mass-Market Outlets
Included in this category are mass merchandisers such as Kmart and Target, warehouse/price
clubs such as Sam's, discount stores such as Dollar Stores, and food and drugstores. These outlets
were responsible for 19.2% of retail sales in the U.S. in 1998, according to the Book Industry
Study Group (BISG). They tend to stock titles with popular appeal and offer large discounts.
They also tend to demand large discounts from publishers.
Other Outlets
This category common department stores, gift shops, newsstands, and specialty shops. Together
they were responsible for 10% of retail book sales in the U.S. in 1998, according to BISG. Book
racks in drugstores, airports, etc. are serviced by "jobbers," also known as "rack jobbers" or
"IDs" (independent distributors). Jobbers have exclusive control of what is put in these racks,
and though newspaper and magazines take up the majority of rack space, books are an important
item. They tend to be "mass-market-sized" (4.25" X 6.75") paperbacks with popular appeal.
Unlike bookstores or mass-market outlets, specialty shops (e.g., map stores, organic groceries,
hobby shops) are centers for people with shared interests. As such, they offer a very attractive

venue for niche publishers, who can assume that their books will be (1) of particular interest to
customers, and (2) displayed more prominently than they would be in a bookstore.

Premium Sales
A premium sale occurs when a corporation or organization decides to offer a book as a gift to its
clients or as a promotional tool. Wells Fargo, for example, might buy 5,000 books on stage
coaches. Generally, the books are sold at a steep discount and are not returnable. These deals can
be lucrative for the publisher, and are best arranged before printing, so that print-runs can be
adjusted accordingly. The sale also has the benefit of providing free publicity for the book.
Book Clubs
Most book clubs operate in the same way: the member is offered several free books in return for
a commitment to purchase a certain number of books over a specified period of time.
Periodically, a title is offered for purchase, and unless the member actively declines it, is sent to
him or her, at which point it may be purchased or returned. After the member's commitment is
fulfilled, more books are offered at lower prices.
Book clubs are a major player in book publishing: in 1998, they accounted for 18% of book sales
nationwide, according to BISG. There are general book clubs (e.g., Book of the Month Club),
more particular clubs (e.g., the History Book Club), and narrow-focus clubs (e.g., The Detective
Book Club).
Most book clubs prefer to act as auxiliary publisher rather than distributor. In other words, rather
than sell books on commission, they typically buy a part of the publisher's initial print-run at or
near cost, or even print copies themselves, sometimes with a modified cover. They then pay the
publisher a royalty on their sales (usually no more than 10% of the club's retail price, which can
be significantly lower than the publisher's). Book club deals are rarely very lucrative for
publishers, who generally split that small royalty with the author, but are considered highly

desirable because (1) they entail little or no work, financial outlay, or risk on the publisher's part,
and (2) they add (sometimes enormously) to the exposure and prestige of the title.

Remainders and Recycling

When demand for a title has subsided and the cost of maintaining inventory exceeds sales,
publishers remainder or recycle the remaining copies. At that point, the title is generally
considered out of print.
"Remainder Houses" buy books in quantity, at cost or below, on a non-returnable basis, and sell
them wherever they can. Other companies specialize in recycling the paper books are made of.
Roles in Sales Department

Sales director: plans, and organizes sales effort and negotiate terms of trade with main

customers, supported by sales manager and reports to sales management team.

Key account holders: propose the purchases of title, plans promotion.
Sales manager: forecasting sales and advising on pricing, reprinting, repricing.
Special Sales Manager: sells book to non-book retailers, direct selling companies, book
clubs. Deals with academic institutions, and businesses on matters such as bulk sales if

textbooks, special editions printing.

Area representatives: involves in territorial sales especially during sales conference, assist
in promotional plans, participate in key initiatives in publicity and customer engagement.

Retailers must pay attention to marketing and selling right titles to their customers. Key account
managers: discuss the new titles with major booksellers and how to promote. Senior publisher
staff: chooses main titles during major promotions, discuss new books and important backlist.
Wide use of sales data to check on authors track record when booksellers unsure of a new title.
Representatives (reps): to obtain advance orders (subscription) on forthcoming books to inform
the printing numbers. Reps keeps record of orders so they can remind book buyers of orders

placed on authors previous orders. Training is usually required to build negotiation and
interpersonal skills.

Academic Sales

Reps Visit the campus: Identify course and lecturers to recommend textbooks Use
promotional material and bound copies

Market Research: Analyze reading list to check recommendations and discussing with
lecturers trend in subjects. Many publishers rely on direct mail promotion

Time management: Alternate between booksellers and college related shops & based on
peak time during starting of academic calendars and non-peak time

School Visit

Market research,
Seminars, Library
resources, Local
exhibitions

Ordering and Sent

Inspection Copy

Edu-Sales
Conference
2/3x a year

Teacher
Engagement-new
titles, competitors
review

Figure 1: Sales in school publishing- Edu Sales Rep Work flow

International Sales
Export Manager:

Regional sales, arrangements with overseas agent

Direct selling to major importers and bookshops

International Sales Staff:

Travelling & export selling, understand the diverse market pertaining social, economic,
political background of each country. Advantaged if able to speak European languages.

Promoting books, liaising with local distributors, opening up new market when
appropriate

Local National Reps

Locally represent International Sales Staff and Support System

Distribution arrangements for international sales

Closed Market
Distribution right held by a stockholding agent.
The agent also service the order, collects payment, promotion, and sales representation within
their territory.
Sister Companies and Branches
Have exclusive rights to publish UK publisher firm books.
Develop publishing operations for their own domestic market.
Open Market
Countries outside the stockholding agents- publisher deals directly with local book trade.
The local book sellers can order either directly from publisher or from the stockist (such as
wholesalers).
Sales on Commission
Independent reps or firms are promoting the books in specified countries. They receive 10-15%
from sale revenue from each territory.
Mainland Europe reps face loss of commission on orders sent to UK wholesalers.
Distribution Overview
The distribution of books, journals, and new media products is critical to the publishers role of
getting its product into customers hands at the right time and right quantities. The key aspects of
distribution are:

Customer care

Accuracy in order fulfilment

Speed and reliability in dispatch

Physical protection of the product and

Economies in dispatch

Figure 2: Failures of Distributions

ISBN (International Standard Book Numbering) & EDI (Electronic Data Exchange)
The principal purpose of the ISBN is to make the identification of any book as certain as
possible. Assuming it is quoted correctly, one can be almost sure that the correct book has been
identified even with no other information. When quoted with the author and title this becomes a
certainty. Before the ISBN was introduced great care was required when ordering books from a
bookseller, especially when there were different editions, impressions and reprints of the same
title and where authors or titles were difficult to distinguish or were incorrectly quoted. Not only
does each edition of the same title have its own number, but the same title produced in different
formats usually has a different number for each. In such cases it is usual to print both on the

verso title-page with an indication of the format. Most use of the ISBN is made by publishers,
booksellers and librarians, in the course of their normal work. Booksellers use it when ordering
books from publishers; indeed, some publishers request that the number be quoted and keep their
stock arranged in that order. Librarians quote it (or should) when ordering books. Consequently it
is usual for publishers to include it in their printed catalogues, and journals in their book reviews.
In libraries the ISBN is perhaps the most reliable identifying element in issue records. The books
themselves are usually arranged on the shelves by subject and in the catalogue by author, title
and subject, but with a computerized issue system the ISBN must be used. It is also essential for
those libraries providing statistics for use under Public Lending Right, the system of
remuneration of authors on the basis of the frequency of issue of their books. The figures are
taken from the issues of a small, representative group of libraries. The ISBN, identical for the
same title in any library, is the only practicable way of recording this information.
Electronic Data Interchange (EDI) is a form of electronic communication designed to permit
trading partners (customers and suppliers), in two or more organizations, to exchange business
transaction data in electronic, structured formats. Unique to EDI, the electronic transmission of
the transaction information can be processed directly by the applications within the receiving
computer systems. The transmission of data in machine readable form eliminates the need for
manual intervention in the data entry or data manipulation process. EDI is a tool for the
electronic transmission and integration of information inter-organizationally. A growing number
of leading edge engineering and construction companies from around the world are
implementing EDI applications to improve operational efficiency, enhance information quality,
and achieve reductions in processing time of project critical information. EDI facilitates
electronic commerce and is particularly useful in international construction endeavors.
BOOK INDUSTRY COMMUNICATION (BIC)
Product information- bibliographical details communicated electronically.
Supply chain- transaction using EDI orders, acknowledgements, delivery notes, invoices, credit
notes, price and product availability
Digital publishing- ISBN and ISSN (Electronic Rights Management System) - This is important
as publishers sell their products either online either via intermediaries or directly to end-users;
this system will enable them facilitate electronic copyright management and payment system.

Supply Chain
The traditional supply chain of the book publishing industry is changing in terms of the digital
revolution in the industry. The first impact was printing plate manufacturers withdrawn from the
supply chain; further, the e-commerce techniques improved the logistic system and customer
relationship management. Technology did accelerate the effectiveness of the supply chain, but
did not change too much the sequences and supply-demand relationships between members in it.
For instance, with the publishing products become virtualized, the roles of authors, publishers,
distributors, resellers, and customers are transforming as a contingent system. A reader can easily
perform as an author, and publisher via online bookstores, even blogs or Facebook. Therefore,
the roles in the publishing supply chain as well as their future practices in producing digital
content are the main purposes of this chapter. Since the past few years, due to the proliferation of
sophisticated publishing technologies, the threshold of publishing has been lowered. Everyone
has a chance to self-publish his/her own work and become an author. These authors come into
contact with their audiences directly, sell books, and become best-selling writers. However, as
the new types of publishing are developing, the sales of physical paper books are declining. It
causes the supply-demand imbalance in the publishing market. In order to cope with this new
publishing wave, how the structure of the publishing supply chain will change? How the
suppliers will reposition their roles? This study selects five of the U.S. leading self-publishers
(AuthorHouse, BookSurge, iUniverse, LuLu, and Xlibris) as its main research subjects, and
constructs a model of digital content supply chain in the publishing industry by applying the
grounded theory methodology.
The books industry today is generating US$77 billion in books sales worldwide and this does not
include newsprints and periodical. It is a highly fragmented industry with over 25000 publishers
in the trade-books category alone. In Asia, most of the focus of the books industry is on
distribution and retailing. There are some low level publishing being done in Asia mainly in local
Asian content but the bulk of the books originate either from Europe or the United States with a

centralized distribution model being used to distribute books to the different markets in Asia. The
level of efficiency as demonstrated by the fulfillment capabilities of Amazon.com could easily
fool most people into believing that the books supply chain is highly efficient. What many fail to
see in the books supply chain is its inefficient back end. In the case of Amazon.com, Amazon had
to rely on Ingram to ensure an efficient fulfillment system and at present, the much touted
worlds largest bookstore have to set up its own warehouses to support such reputation. Hence,
an online fulfillment is still very much supported by traditional distribution system. It would be
interesting to consider hypothetically if an Asian Amazon.com would work but what we are more
keen on focusing is the back end of the supply chain as we have illustrated through Amazon.com,
having a successful front end fulfillment system is just half the success story, the other half, the
back end of the supply chain is the key to an integrated and efficient books supply chain.

Figure 3: Supply Chain- Distribution

Reference:

Inside Book Publishing (Routledge, fifth edition, 2014). Korean edition 2011; Romanian edition
2013; Chinese edition 2014