Monday, July 20, 2015
Book Returns: What they Mean For Publishers and Authors
The return agreement between bookstores and wholesalers/publishers has been in effect since the Great Depression. It’s also unique, because no other industry has such a policy.
According to Brooke Warner’s article at the Huffington Post:
“The fallout from being a returns-based industry is that retailers have little incentive to order what they think they can really sell, and publishers rarely push back on what might be perceived as unrealistic orders because they're desperate for a shot at getting their product in a position where it might really move.”
Almost a third of all books are returned, a very sobering fact. Mass market paperbacks aren’t even returned. The cover is ripped off to send back to the publisher and the book is destroyed..
Returns come from two sources—bookstores and the wholesalers & distributors who deal with these stores. Libraries and book clubs don’t return books. And only Amazon returns ebooks.
The standard return policy is 90 days. Stores have three months to return books for a full credit, which includes shipping costs. In addition, returned books rarely come back in the same pristine condition in which they were shipped. Unless they look like they were put through a shredder, the publisher has to give the store credit. And those books become a negative balance in an author’s royalty check.
In a 3-month period, an author’s new book sells 10,000 copies to bookstores. The royalty statement would reflect royalties based on the amount of books that went out. But during that same 3-month period, 3000 books are returned. That is then deducted from the royalty to be paid to the author.
What’s worse, is that after its initial release, in the next three months only 1000 books are sold. But returns are continuing to come in. What if another 1000 are returned? Or even worse, another 3000?
And don’t forget the publisher who is now in the hole for production and marketing costs of those returned books.
Brooke Warner says:
“...most authors want their books to be in B&N, and it's good for a book to have the "chance" to be in B&N, but their returns (on a given title) are often higher than 50 percent, when the industry standard is 30 percent. They're also notorious for sending back damaged books.”
Returned books often can’t be resold as new. What are done with remainders and less-than-perfect books? Sometimes they are sold at a discount, donated to charity, or trashed and written off as an expense. That means the author gets a much, much smaller royalty from a returned book if it’s discounted and sold. Donated and trashed books are counted against the author’s royalties.
Plus an author with a lot of returned books won’t likely see a contract for a second book.
What do you think? Is it time the industry changed? Can it be changed?