The original version of this article was published back in 2005. Yes, nine long years ago! I still get questions about this almost every week. The updated version is below.
PART I
Bookstores have a long history of ordering too many books, and then returning them for credit or a refund, often damaged, bent, and/or dirty, and at the expense of the publisher (or self-published author). At other times, the books are simply destroyed (or sold to a big salvage bookstore), again, at the expense of the publisher or self-published author. Bookstores, like other retailers, should be financially responsible for their own sales forecasts. Period. I just can’t find anything in the “returns” equation where the publisher or author should be financially responsible for a bookstore’s poor estimation of sales.
GLUTTONOUS PURCHASING PRACTICES
Accepting returns costs the bookstores very little (except when they agree to pay shipping, or a small percentage of the loss as a penalty). Grocery stores aren’t allowed to return unsold food to manufacturers and your local department store can’t return unsold clothes to the factory. So, why should bookstores be allowed to over-order and then return items, while demanding the publisher or self-published author bear the expense of their poor judgment and shoddy accounting practices? And, think of all the trees that were wasted on those books that will never sell! Yes, bookstores’ poor practices affect the environment as well.
Ordering a product, when you know you’re going to return most of that product, is greedy and unprofessional. We simply won’t participate in the gluttonous purchasing practices of bookstores.
A VERY SAD STORY!
Several years ago, we learned of an author who convinced a huge, well-known discount store (you probably have one in your neighborhood) to buy 300,000 copies of his book. He was apparently related to someone in the higher ranks at that store. The publisher naively agreed to accept returns, and processed the order. Well, when dealing with 300,000 copies of an unknown author’s books, you can probably guess what happened. Almost all of the books were eventually returned…at the expense of the publisher.
By the time the books were returned, the publisher may have already paid royalties to the author. When something like this happens, what do you think are the publisher’s chances of recovering that lost money? Zero. With a loss of this magnitude, bankruptcy can soon follow.
Those thousands of copies are likely still stored somewhere and they will never sell. I wonder how many trees were destroyed to print 300,000 copies of a book. The store should have never ordered that many copies and the publisher should have never let the transaction occur! But, since the books were fully returnable, the store knew it wouldn’t be out any money if the books didn’t sell. Bookstores and some large retailers that carry books are usually only concerned about their own bottom line. They’re so accustomed to returning unsold books that it seems they really don’t care what the final outcome will be…since it’s not their skin on the stove.
ACCEPTING RETURNS CAN BE A HUGE GAMBLE!
There are some nasty people in this world and it wouldn’t be so far-fetched to imagine someone in the future orchestrating such a deal as a way to put a publisher or self-published author out of business in the end. New publishers and authors who don’t know any better are ripe for victimization if they don’t know how the industry really works.
Think about it. Employee A writes a book. He convinces Employee B in the purchasing department at his firm to buy thousands of copies because, if they don’t sell, they can be returned at no expense to the company. Months later, after Employee A has received a HUGE royalty check for the transaction (which the publisher will never be able to recoup), the books are returned to his publisher. The publisher paid to have the books printed, and paid the author, and must now reimburse the retailer for the returned copies. That sort of scam is not such a far-fetched scenario in this greedy day and age! If you accept returns, this type of scam (and a variety of scams) could happen to you.
EVEN IF YOU HAVE ROOM TO WAREHOUSE BOOKS, YOU STILL SHOULDN’T ACCEPT RETURNS
At BookLocker.com, our books have always been non-returnable. POD books are printed as they’re ordered (hence the name – Print on Demand) and, due to the very nature of this business, we, nor our printer, have any warehouse capabilities. Neither do most of our competitors. The book buyers’ orders go directly to a database that results in a printed book, and instant fulfillment. In other words, when somebody orders one of our books from our site, or even from Amazon, the order is sent automatically and instantly to our printer, who then prints and ships a copy of the book directly to the customer. For Amazon orders, they even use an Amazon.com return address label. Orders placed through our website have our name and address on them. The customer receives their book very quickly and Amazon never lays a hand on it.
If a book is returned to Amazon for any reason (you wouldn’t believe how many packages come back as undeliverable), Amazon shelves the book and, if an order arrives for it later, they’ll send that copy out before ordering a new copy from our printer.
MAKING A BOOK RETURNABLE ISN’T LIKELY TO INCREASE SALES AT ALL FOR UNKNOWN AUTHORS!
For certain books, many traditional publishers are also now using print on demand technology.
With POD technology, there is simply no way to divert orders to a stack of books in a warehouse. Bookstores know our books are non-returnable yet we continue to sell thousands of books to bookstores on a regular basis. It’s quite obvious that, if a customer wants one of our books, the bookstore is going to order it, regardless of its non-returnable status.
More than a million books are published each year. Combine those with books with ones that are already on the market and you’ll see there simply isn’t enough shelf space in a bookstore for all the books on the market today. Even if you convince one store to stock your book, it isn’t likely to be on the front table. Publishers pay a premium for that space. Your one or two copies will be crammed in with others in the same genre, and aren’t likely to sell. If you have agreed to accept returns, a few weeks or months later you can expect a package in the mail with an invoice. Yes, the bookstore is going to demand their money back. They may even ask you to pay the return shipping.
ONE LARGE BOOKSTORE CHAIN TRIED TO PULL A FAST ONE!!
Many years ago, when we gave credit to bookstores (and didn’t accept returns), one large bookstore chain agreed to our non-returnable terms, but would ship unsold books back to us anyway. Then, they started deducted the cost of those returned books from payments on future orders. We quickly stopped giving them credit, and required up-front payment on all orders. Our sales did not decrease. And, yes, the store kept ordering our books. That was just another example of a bookstore finding a creative way to victimize a small publisher for their own gain. We were able to quickly stop their gluttonous and unethical practices.
The fact is marketing to bookstores is usually a waste of time. Your time is much better spent marketing directly to book lovers online.
AN INDUSTRY SCAM THAT BROUGHT ABOUT A BIG CHANGE TO ONE LARGE BOOKSTORE CHAIN
There was a common scam in the industry that originated a few years ago. (For obvious reasons, I won’t reveal exactly how it works.) The scam resulted in false bookstore orders, eventually leading to massive book returns. The scammers are usually the authors of the books themselves. Some so-called book marketers perform this scam, too, getting money from authors up-front, and leaving the authors with a garage full of returned books (and very angry bookstores!) months later. Watch out for firms that guarantee bookstore sales!
A few years ago, two of our authors tried to pull the scam above (their contracts were instantly terminated) and a large bookstore chain begged us to accept returns on one of those titles. They were well-aware of the scam, and had been for some time, yet had done nothing to stop it because they would simply return the unsold books at the expense of their publisher clients. If the scam wasn’t hurting the bookstore chain itself, what incentive did they have to stop it?
When they contacted us, we refused to take the financial hit for their repeated mistake. In other words, we refused to accept the returned books because the bookstore itself could have easily prevented the scam. We were NOT part of the equation and other authors (from other publishers) had also pulled the scam on the same chain. Just because a firm has stores across the country doesn’t mean their upper management is smart!!
We told them a very simple way they could prevent the scam in the future (it wasn’t rocket science!) and they finally changed their practices.
A firm that accepts a special order from a customer, but doesn’t require payment until if/when the customer picks it up, is just asking to get scammed. Publishers shouldn’t be penalized for a bookstore’s poor (I mean just plain dumb!) practices.
Our recommendation was that they require prepayment on all special orders. What does that mean? If a customer calls a bookstore, or walks in, and requests a book that’s not in their inventory, the store requires up-front payment before they will order that book from the publisher. The solution was so easy!!
Nowadays, many bookstore store clerks simply refer book buyers to the store’s website.
There’s no faster way for an author to ruin their reputation than by scamming bookstores and their own publisher! If you rip off a bookstore, don’t expect to ever sell another copy of your book to them, or to any bookstore. Of course, when your publisher terminates your contract, you won’t have any books to sell anyway.
RESPONSIBLE BOOKSTORE BUYING: ORDER CONSERVATIVELY, AND THEN BUY MORE LATER, IF NEEDED.
We work with several bookstores that buy around 10 to 20 copies of a particular book at a time (usually by local authors). When they are close to selling out, they order more. If the books just stop selling one day, they’re only out the expense of a handful of copies. Doesn’t that make more sense than ordering 300,000 copies of a product that you know won’t sell?
The way these small bookstores are ordering POD books is the way all bookstores should be doing business. Order conservatively and, if you sell those copies, then order some more. The largest distributor (Ingram) can get our books to bookstores in just a few days anyway. And, the large bookstores get free shipping from Ingram. When I learned that, the business of returns seemed even more ridiculous!
PART II
WHERE THE PRACTICE OF BOOK RETURNS BEGAN – DURING THE GREAT DEPRESSION!
After publishing the original version of this article, I received a flood of email from authors. One mentioned that she’d heard bookstore returns were instituted during the depression to help bookstores stay in business. Interestingly, however, the practice never died, despite the end of the depression. I researched that interesting tidbit and this is what I found.
According to Jeffrey A. Trachtenberg of The Wall Street Journal, “The book industry, by contrast, has been saddled with (returns) since the Depression, when publishers told struggling bookstores they could return unwanted books as long as they kept ordering new titles.”
Hey! Hasn’t anyone told the industry that the depression ended decades ago?! And, what happened to the part about them continuing to order new titles from those specific publishers?
The article is quite disturbing, sharing the dollar figures for returned books (estimated at $800M -yes MILLION – that year alone), how authors aren’t paid for returns, even if the books are then sold to discount warehouses, and other inner-workings of a system few authors really know anything about. You can read the article here: Quest for Best Seller Means Lots of Returned Books.
I found several articles that mentioned the obvious financial domino effect of returns. Depending on which study you read, an average of 35% to 40% of books are returned each year. That means 35% to 40% of a publisher’s production costs are wasted and 35% to 40% of the trees killed to make those books were also wasted! Publishers have to increase their prices on future books to make up for the loss…and then 35% to 40% of those books are returned and they have to increase their prices again. It’s ridiculous!
“KINKS” IN THE ORDERING PROCESS? MORE LIKE DECADES OF GLUTTONOUS ORDERING PRACTICES!!
Several years ago, David Kirkpatrick’s study, Report to the Author’s Guild Midlist Books Study Committee (which is no longer available online), pointed out a very disturbing item when discussing the unprecedented increase in returns over that decade. “The chains say that much of the increase was the fault of kinks in the ordering process at their giant new superstores. Many of the returns also came from Wal-Mart Stores Inc., Costco’s Price Club and other warehouse stores, which now sell a growing number of hardcover books and send back about 40% of their orders.”
Forty percent! Why don’t they just cut their orders by 40% and save themselves (and everyone else) all that ordering, stocking/de-stocking and shipping time and money? And, the publishers had to once again pay for something that wasn’t their fault. “Kinks” in the ordering process? Ludicrous!
BOOKSTORES SHOULD ONLY BUY WHAT THEY’RE WILLING TO ACCEPT AS A LOSS
The solution is simple. If you’re a bookstore owner or purchasing agent, only buy what you are willing to accept as a loss. I don’t want you to buy 10 copies of my book if you don’t think you can sell them. Just buy one; two if you’re feeling motivated to sell to your customers. That’s what other industries do. Why keep wasting money and killing trees when you can just use good old-fashioned sales forecasting instead?
HOW POD PUBLISHERS ARE USING “RETURNS” TO GET MORE MONEY FROM AUTHORS!
If making a book returnable really did lead to increased book sales for most books, wouldn’t all publishers, including self-publishing services companies, be willing to accept returns at their own expense? Sure they would. The fact is accepting returns isn’t likely to increase sales of your book at all, especially if you’re a new or unknown author. Most book sales occur online now. POD publishers know that making a book returnable isn’t likely to increase sales. So, what did they do? They found a way to PROFIT from the practice!
Several POD publishers sell “returns services” to authors. Of course, this is only perpetuating a decades-old problem. And, the POD publishers are profiting from it! At hundreds to even a thousand or more PER YEAR, I’m willing to bet all my birthday money that the majority of those authors are spending far more for those services than they’re coming close to earning in resulting book sales.
Of course, even if the author spends that ridiculous amount of money, the publishers don’t offer any guarantees that any store will buy or stock your book.
I encourage you to think long and hard, and to get documented sales statistics (in writing!) on a few dozen books (not just a handful) from your POD publisher before investing in this type of “service.”
HOW TO END THIS DECADES-OLD PRACTICE
If all publishers stop accepting returns, this wasteful practice will come to an end. If bookstores are forced to start making their own sales forecasts, instead of blindly ordering books they know will probably never sell, the ridiculous and gluttonous practice of bookstore returns will cease and millions of dollars (and trees!) will be saved.
It’s obvious the business of returns needs to be terminated…and should have been decades ago, at the end of the depression. Remember, just because “everybody’s doing it” doesn’t make it right, or even smart! If you’re a publisher or a self-published authors, stop accepting returns! Only together can we change a horribly broken system.
As always, I welcome your comments on this, or any industry topic!
Angela Hoy lives on a mountain in North Georgia. She is the publisher of WritersWeekly.com, the President and CEO of BookLocker.com and AbuzzPress, and the author of 24 books.
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