Writer, Editor, Reader, Fan Girl

The Business Rusch: Shifting Sands

Business Rusch logo webI live on the beach. Here the sand shifts daily. We expect it. We watch it. The tide comes in; the tide goes out; the sand moves.

But I grew up in the Midwest. The land is firm there, solid. When someone builds a road it remains a recognizable road. Frigid winters and hot summers may buckle the pavement, but the road beneath remains something you can trust.

I love explaining Oregon road signs to Midwesterners. “Do you know what ‘sunken grade’ means?” I ask.

“No,” they say, looking at me distrustfully. After all, if they drove to my house, they saw several yellow signs warning about sunken grades.

“It means,” I say, “the road can fall away at any minute.”

The Midwesterners reel in shock. Roads are permanent, some say to me. That’s not possible, others say. You’re kidding! most of them exclaim. They look up the terminology, and learn that I’m right.

Roads out here, built on cliff faces, or over mountains, or on ground composed mostly of sandy soil, fall away on bright clear sunny days with no storms on the horizon. And no storms in the recent past. The ground slowly crumbles. The road sinks, or it doesn’t. But one day—preferably when no car is on it—the road will dissolve.

In fact, there are two stretches of highway near my hometown—one to the east, and one to the south—that the road crews have tried for decades to stabilize and cannot. Every time I cross one of those bits of road, the ground beneath me is different than the time before even if my crossings are only hours apart.

For fifty, maybe sixty years, certainly for the bulk of my lifetime as a writer, the publishing industry has been a Midwestern road. Occasionally a flood or a massive tornado will take out a section, but honestly, if a road disappears, that disappearance was something traumatic, an Act of God.

Lately, the publishing industry has been an Oregon road, with lots of sunken grade signs. Almost all of this uncertainty happened because of distribution changes, most of them in the e-book arena.  The biggest shake-ups occurred between 2009 and 2011. Then, as big publishing realized they were living in Oregon not the sturdy Midwest, they adjusted their business model just enough to make it viable through the transition.

Bookstores, on the other hand, seemed to be the cars on that sunken grade as it fell into oblivion. Last week, I showed you how the bookstores have recovered. That recovery is continuing. And a whole new revolution is happening.

In fact, at the moment, we’ve left roads filled with sunken grade hazard signs and have taken to driving on the beach itself. The sands of the publishing industry are changing that quickly.

The sea-change—which is what shifting sands are, after all, a change brought by the sea—means different things for different parts of the industry. As I showed last week, it’s a boon to independent booksellers (small, non-chain bookstores). It’ll be even more of a boon as time goes on.

The change is also great for self-published writers (indie writers) who do a print edition as well as an e-book edition. In fact, the news for those indie writers is fantastic. The news will have no impact at all on indie writers who do e-books only, except that it might convince them to start putting their titles into paper as well.

The change will have a leveling effect on books sold through traditional publishers. They’re probably not even aware that this change has occurred, and they certainly don’t know what it means for them. I only stumbled on this change through an odd set of circumstances that I’ll try to explain over the next few blog posts.

However, for the very big traditionally published writers, like James Patterson and Nora Roberts, this change will show up as a negative in their royalty statements. They will lose market share, and will not know why. In fact, they already are losing market share, and the smart ones are worried about it. That’s one of the reasons Patterson believes the entire industry is in trouble; until four years ago, if Patterson’s sales declined across the board, then industry sales were declining across the board. As I showed in part last week, that is no longer true.

It’s not just the statistics I pointed to last week that bear this out. It’s hidden in the reports from the various trade organizations that have come out this spring.

Frankly, I wouldn’t have understood what’s in those reports either if Dean and I hadn’t started Ella Distribution last year.

To understand what we saw and learned, you need to understand how individuals in the publishing industry work. Most people in publishing work in a vacuum. Editors don’t know what’s going on in their own publishing house let alone what’s going on with their writers or book distributors or bookstores.

Writers don’t just work in a vacuum. I’m beginning to think that most writers are vacuum-sealed. They seem to believe that watching what other writers are doing is more important than learning anything about business, career management, copyright, or how the publishing industry is changing. (Think of it like this: writers are like cats. They’re more interested in sniffing the butt of the cat standing in front of them on the freeway of life than they are in the truck barreling down on them at sixty miles per hour.)

Actual publishers pay more attention to what’s going on than editors or agents because publishers, theoretically, should understand marketing and sales. They generally understand marketing and sales to chain bookstores, but little else.

Bookstores understand what’s happening in their stores or in their towns. They also know what’s being published (maybe), but they’re as different from each other as possible. And bookstores generally do not share information with each other about important things, like how to handle accounts or deal with distributors.

It’s really rare for someone in the industry to understand all sections of the industry. Dean and I do because we’re writers first, we’ve owned publishing companies (and advised on others), we’ve owned book and comic stores, and we’ve worked directly with distributors throughout our entire careers, in all capacities. We’ve worked with distributors as store owners, as well as publishers of books and magazines. We’ve also owned companies that distribute things.

Over the last two weeks, I’ve begun to think we’re the only two people in the country who actually see the change on all levels, from writer to small publisher to large publisher to the bookstore itself. And, believe me, we will be sharing that knowledge. I started with last week’s blog and have a hunch I’ll be continuing this in some form until early June.

Such a lead-in, right? A bit of a tease, in fact.

But the information is complicated, and I want you to come with me on this.

What has changed is this: Bookstores now have access to all published print books, whether they come from Createspace or from a big traditional publisher. Bookstores didn’t have access to all published print books before.

There are some caveats, of course. The first caveat is this: The indie writer must put her book into Createspace’s extended distribution program. (Lightning Source has something similar, but I’m not as familiar with it.) The second caveat is this: the bookstore must have a preferred account through its primary distributor.

If both of those things are in place—the writer has her print-on-demand book in an extended distribution program through the POD company, and the bookstore has a good relationship with its primary distributor, then any bookstore can find that book with no help from the writer at all.

Got that? The writer has to do nothing, and still her book will end up in the bookstore’s system.

I’ve emphasized all of these words for a reason, and now I’m going to have to explain those reasons.

In the solid (Midwestern-road) past of book selling, a bookstore heard about a book through publishers’ catalogues, some press on the bigger books, and through the book’s availability in the distribution system. (Distributors had their own catalogues, too.) The bookseller also found out about upcoming books through industry trade publications, like Publishers Weekly for trade or commercial books, Locus Magazine for science fiction books, Romantic Times (which was what it was called back then) for romance books, and various slick magazines for mainstream books. Mystery books had the hardest time penetrating the market because actual trade publications didn’t exist. Those that did, like Mystery Scene (which Pulphouse published back in the early 1990s) came out quarterly, which was damn near useless when books only remained on the shelf for a few weeks.

Booksellers would then preorder the book or order the existing book (if they found out within a few weeks of publication) from a distributor or (rarely) the publisher.

Indie or self-published books had no place in this world because bookstores could not order those books at a discount. And buying books out of the back of some author’s car felt too much like drug dealing for many booksellers. The writers who did so often had the same sleaze-ball reputation as a drug dealer.

For eighty years now, bookstores have run on a strange system, one that almost no other business enjoys. If a bookstore fills its store with inventory from publishers, the bookstore can return that inventory for full credit if the books don’t sell.

Imagine your local grocery store trying to do that with, say, bananas. Nope. Doesn’t happen. Nor could I return any artwork or framing materials that didn’t sell back when I owned a frame shop and art gallery in the early 1980s. It just isn’t possible.

For years, publishers have tried to rescind this practice, called the “returns policy.” It was devastating to publishers. They had to produce two books to sell one, because for decades, returns ran at a minimum of 50%. A book that sold one book for every two produced was considered a success. Think about that for a moment.

Publishers couldn’t talk to other publishers about changing the returns policy because that would be collusion to impact the market in a favorable way toward publishers. Collusion like that is illegal in the United States. Bookstores would have complained and publishers would have either had to change the policy back or would have faced all kinds of legal repercussions.

Publishers were trapped by a policy put into place long before anyone currently working in publishing was born.

Small publishers coped by offering good discounts with no returns. Unfortunately, that policy kept small publishers small, because most booksellers refused to do business with them. And the bookstores wouldn’t buy a self-published book from the author, because not only was there no guarantee of quality but the bookseller was stuck with that book forever and ever.

The whole stuck-with thing is how self-publishing developed a stigma. Before returns became part of the system in the 1930s, self-published books were common. Mark Twain self-published. Virginia Wolf self-published. Benjamin Franklin was the king of self-publishers. The difference was that back then there were fewer bookstores, and those bookstores operated like all other businesses: if they bought something, they were stuck with it, unless it sold to a customer.

The returns policy stigmatized anyone who couldn’t offer returns. But returns were costly and dangerous to a business. When our company, Pulphouse Publishing, changed its returns policy in early 1992, that decision was one of a handful that sent the company out of business. We went from a debt-free corporation to a quarter of a million dollars in debt in less than a year.

The self-publishing stigma started going away with the rise of e-books. Readers found books they liked and didn’t care who published them. The problem with self-publishing remained only with print books and primarily in the book distribution system itself.

Until a year or so ago, an  indie writer or a small publisher could only offer credit and returns (like the big guys) by banding together in smaller distribution companies. Those distribution companies they demanded exclusivity. A writer distributed through them had to only deal with them.

Quite frankly, booksellers hate those companies because they don’t give credit easily and they limit returns. (They were also extremely hard for the small publishers to deal with, which was why Pulphouse set up its own distribution system.)

In early 2011, I was the Guest of Honor at Chattacon in Chattanooga, Tennessee. There, I talked with several book dealers, including some old friends, about the difficulty they were having getting my indie published print titles. The booksellers wanted good discounts, and they wanted returns, which I knew that we couldn’t offer.

The bookstores couldn’t order print titles by indie-published writers because those books weren’t in the traditional systems, and had no real hope of getting there. Bookstores also did not want to order direct from the publishers. Too much hassle.

So bookstores needed something new.

Dean and I pursued the “something new” throughout 2011 and into 2012, by researching, as well as talking to book dealers, bookstore owners, and a wide variety of people. We set up Ella Distribution with the terms the book dealers said they would like—a 50% discount for 10 books (not all the same title)—and even with no returns, that would beat the major distributors like Ingrams or Baker & Taylor.

So, if a bookseller wanted three different books from me, two Fiction Rivers, a book from Dean, and books from other big names who were now self-publishing their work, the bookseller could get 50%. At the time, the bookseller could only get 5% on indie=published titles from the major distributors, also with no returns.

Booksellers also wanted the ability to pre-order books, so the books would be in their stores by the publication date. We decided to add that to Ella’s repertoire.

We set Ella up, we hired one of the best people in the country to run it, we made the website live and—nothing. Nada. Zip. Zilch. We talked to booksellers. They promised to place an order down the road. Which was weird, because they had been clamoring for Ella just a few short months before. In fact, the booksellers who helped us design Ella weren’t placing orders with the company either. They were making excuses not to order.

Never in our lifetimes have Dean and I started a business in response to a known demand and gotten no response at all. Never.

We tweaked the site. We got more big names in. And then we published Fiction River. There was a great demand for Fiction River. We have more subscriptions than we expected by factors of 10, in both electronic and print editions. Bookstores claimed they wanted the first issue right away.

But they didn’t order.

Fiction River: Unnatural Worlds debuted on Tuesday, April 23. We published that pub date everywhere.

On Sunday, April 19, I was putting up my Free Fiction for that Monday. I went on Barnes & Noble’s website to get a link, and saw that Fiction River: Unnatural Worlds was already on the site. I expected that. We had released the e-book a few days ahead so that on April 23, the e-book would be live everywhere.

What I didn’t expect to see was the print book. After all, B&N had not placed a preorder with Ella.

Yet there was Fiction River: Unnatural Worlds the print edition, offered for sale at the proper price. I clicked on the link, and the page said the book would be available in 1-3 weeks. Now, anyone who has done print books through extended distribution on Createspace knows that such listings appear on Amazon  right away. It takes a few days for the Amazon listing to state that the book ships quickly.

In other words, I expected to see such a listing on Amazon but not on B&N. I thought that odd, and decided to follow up on it.

On Tuesday morning, April 23, I clicked on the B&N listing. The listing stated that the book would ship in one to two days.

A series of mental bells went off. I immediately knew what this meant. It meant that B&N already had the book in its warehouse on Sunday. B&N just followed our company-stated publication date, and didn’t make the book officially available until Tuesday.

How had the book gotten to the warehouse so fast? We had put the book into Createspace early enough so that we could ship the subscription copies early and Ella  could ship those preorders that never happened.

And somehow, B&N got the books at the same time as Ella. So did other bookstores.

They had preordered, just not through Ella. Dean and I had thought that impossible until we saw proof of it.

We investigated, and discovered this:

Earlier this year, Baker & Taylor changed its policies in regard to self-published titles. Instead of segregating them to a different part of their website (as if all POD books smelled bad), B&T mixed the books into the general population. Then, B&T changed its discount policy on POD books. Now, POD books qualify for the hassle-free returns policy. Certain bookstores—those with good credit, who ordered a lot of copies through B&T—qualify for as much as a 45% discount on any POD title. These gold-plated bookstores can get another 6% discount off their bill if they pay within 30 days.

And the bookstore can return one copy for the full price if that copy doesn’t sell. Back in the day (say, just a few years ago) distributors did not allow single-copy returns. The bookseller had to return at least five of that title to get the full-price return payment.

This is not a policy offered to all bookstores. But this policy is not offered to all bookstores on titles from big New York publishers either. Distributors look at bookstores the way any other business looks at its clients. Distributors rank bookstores according to credit and volume. If a bookseller pays his bill and does a lot of business through a distributor, that bookseller gets better discounts through that distributor than a bookseller who pays his bill and only does a tiny amount of business through that distributor.

It makes sense, from a business perspective.

In the past, POD titles were 5% no return no matter who the bookseller was. Now on B&T,  POD titles are 45% full return plus for select bookstores.

Ingrams, afraid of losing business, immediately followed B&T’s lead. Both distributors offer preorders the moment the POD goes live with Createspace—if, of course, the distributor believes there’s a demand for the book.

With both major distributors now offering titles by indie writers and small presses at the same discounts as regular publishers (if the bookstore meets certain incentives), Ella had no reason to exist.

On April 29, we shut Ella Distribution down. We all have mixed emotions about it, of course. The staff did a fantastic job and built a fantastic website. They did everything right. So did we.

But the business model, viable in November of 2012, wasn’t viable in February of 2013, about the time Ella’s website went live.

Booksellers, even our friends, didn’t tell us that the sands had shifted because those booksellers figured they were the only ones who didn’t need Ella. Writers didn’t see it. Big publishing didn’t see it.

Dean and I didn’t see it either. We both blog. We do our best to keep up with the industry. We spent ten days searching for information on this and finding nothing.

As we got ready to close Ella, the staff told us it was no surprise to them. Our tech people told us that they saw lots of hits on the website, increasing all the time, but no orders. The staff had no idea why this was happening, just that it was. They too knew that something was fundamentally wrong. (Did I tell you these people were great?)

Their comments sent shockwaves through me. I got pissed at myself. I wondered again what I had missed.

I stayed up all night on April 29th, researching even more. And I finally found part of what I was looking for, buried in a Statshot report from the American Association of Publishers. The report, based on information from approximately 1,200 publishers. The AAP relies heavily on information from distributors of trade publishers (i.e. B&T and Ingrams, etc.). I had read this on Publishers Marketplace when it was actual news. The item said:

In adult books, gross shipments to retailers actually declined by one percent, but returns came down by $318 million (with over half of the inventory savings on mass market returns). On a dollar basis, returns comprised 27 percent of gross print sales. That’s the greater efficiency of digital and online sales at work, seen in the positive earnings reports at many publishers.

When I  initially read that, I took “the greater efficiency of digital and online sales at work” to mean that more books sold through online bookstores like Amazon and Barnes & Noble. Customers expected those books to arrive in a slower fashion than they would out of a brick-and-mortar store.

What that phrase actually means is that booksellers have changed their ordering habits. Some are learning this on their own, but others are learning it through the American Booksellers Associations various programs, particularly something called The Winter Institute (which I will discuss more thoroughly in a future blog.)

Booksellers no longer order ten copies of a book that they think might sell. They order one, and put it face-out on the shelf. When that book sells, they order another which arrives from the distributor within one or two days.

Booksellers are learning how to run a leaner business. This cuts down on big orders (and we’ll discuss the implications of that in future blogs), but it also cuts down on returns. Returns, which had stabilized at 50% or more, were by the end of 2012, down to 27%. That’s huge, people. That’s an amazing shift.

That report, by the way, which was the only mention of returns and the shift that we were just beginning to understand, came out on April 11. In other words, we had missed nothing. And our decision to shut down Ella was a combination of being informed, having the best people, trying to start up a company right in the middle of this change, and having access to all kinds of information we wouldn’t normally have.

By the way, as I searched for that AAP report again tonight, I found more information on the changes going on in the industry. BookStats released its report on 2012 this week.

BookStats uses different methodology to report book sales. Here’s how Publishers Marketplace explains the methodology:

The BookStats methodology takes real data collected from approximately 1,400 publishers, and uses a series of calculations and hypotheses to posit extrapolations for roughly 59,000 active publishers (the overwhelming majority of which are very small). Consistent with previous years, only about 60 percent of the BookStats data is actual reported data — the rest (some $11 billion worth) is modeled from those reports.

I want you to note the numbers. BookStats extrapolates on 59,000 publishers are doing based on the activity of 1400 publishers. This is a very different measure than the actual numbers coming out of the 1200 publishers for AAP. (In other words, this system compares to the way movie grosses, and Nielsen ratings, and all of those other measures of entertainment are calculated. Not real efficient, but it’s what we’ve got.)

Here’s the quote I want you to see, from Publishers Marketplace’s report on BookStats:

In the AAP data, as we extrapolated, it was clear that the adult trade grew by roughly the gross revenues of the Fifty Shades Trilogy, and the children’s/YA business grew by just a little more ($30 million, or 2 percent) than the gross revenues of the Hunger Games trilogy — leaving the rest of the business flat. But the BookStats models posit that all the non-reporting publishers grew by about $550 million (or 7 percent); and thus that they grew in ways that most of the publishers who report to the AAP did not. Either this is a success story for small and lesser-known publishers, or it is yet another reason to question the BookStats models.

 

Since the AAP method did not count POD books, books by independent publishers, or books from most of the small press—indeed, did not count books sold by 57,800 other publishers (that PM knows of)—I believe this success story for the other publishers is at least as likely as a flaw in BookStats’ model.

BookStats at least tries to count what the rest of us are doing.

All of this might change next year, now that distributors like B&T have made it possible for indie books to sell side by side with books from traditional publishers.

I’ve given you a lot of numbers here, and shown you in detail how the sands are shifting. But here’s the thing I want you to take from this article:

It is now not only possible, but likely that an indie book with good word-of-mouth will sell as well or better than a book with the same word of mouth published by traditional publishers. Why? Because indie books won’t go out of print quickly. They don’t have limited press runs (see Dean’s post from last week), and they don’t have useless stock sitting in warehouses.

Indie writers, indie books, indie publishers now have the same access to bookstores that traditional publishers do.

The playing field has just leveled.

In the next few weeks, I’ll talk about how this will impact traditional writers and publishers, but I’ll also answer the question all of you are preparing to type into my comments section: How do you get word-of-mouth going on your book so that a bookstore wants to order your book through B&T or Ingrams?

I’ll answer that and so much more in the next few weeks.

I don’t distribute this blog through traditional channels. It’s published here and nowhere else. I put this up for free so that you can have the information, but I do need to have these words pay at least a little bit toward my writing income.

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“The Business Rusch: Shifting Sands” copyright © 2013 by Kristine Kathryn Rusch.

 




 

 

 

 

 

112 Comments

  1. May 28, 2013    

    Hey Kristine.
    Not sure it has been mentioned in your responses (great article). BUT – did you realise that CreateSpaces extended distribution is actually through Lightning Source (Ingram). Which begs the question why not self publish (as publisher) via Lightning Source as opposed to Createspace (or both). We’ve been publishing since 2006 and LS is the way to go …more info at http://www.doityourselfpublishing.com.au. Cheers

    • May 28, 2013    

      I note your website is Australian, Julie-Ann. I’m not sure about the costs there, but here, Createspace is much cheaper for the independent publisher. The initial set-up fees are significantly lower, and you can correct things in your proof at little and often no cost, where Lightning Source often charges for each change. Initial costs are a huge factor for small businesses, so it’s always better to take the low-cost option that provides the same or better value. And as you point out, the value is the same here. (Unless, of course, you’re doing hardcovers. In that case, you must use Lightning Source.) Even the upcoming Lightning Source Spark will cost more than Createspace. We’ll see how Spark works, though. It might be another game-changer.

  2. May 27, 2013    

    We work through Lightning Source, and while it’s true that B&N and Amazon get the print books and sell them regularly – it’s also true that Lightning Source is owned by Ingram, and Create Space prints through Lightning Source. A recent conversation with my sales rep shows four main partners who get the full discount we set. Amazon, B&N, Ingram and B&T – so Amazon and B&N get the same discount as Ingram, and they will sell at as low as a 20 percent discount from us. Indy bookstores, unfortunately, cannot do this – as your article seems to suggest. Our books are listed in Ingrams catalog, but they are short discounted. WE are expected to discount 55 percent to them and take returns to get a decent discount for independent bookstores, and the only way to do this is to raise the price hugely and chance losing our business over returns. We could offer the discount w/out returns, but only a small part would be passed on to booksellers because of the short-discount on no returns policy.

    None of which makes real world sense as LS is going to direct ship all orders, and the cost for one book is the same as the cost for 100 books (per title).

    I don’t know if Ella was the answer, but it’s on the right track. While I don’t condone a new middle man, the sad fact is that the distribution lines are tied in to the POD Print lines in a way that gives them all the advantage.

    -DNW

    • May 27, 2013    

      David, it sounds like you were using the short discount on LS. The problem with that is that no bookstore would ever buy books on that discount. Dean calls it a fake-out. It sounds good for the publisher, but isn’t. Raise your price, and put the books in the 55%. It’s what the big guys do; it’s what you should do, imho. Mostly the big distributors (B&T, Ingrams) will keep any returns from bookstores and then ship the books to a new order without you ever seeing the returns on your statement. You’ll probably only get charged for damaged books, and often not even then. Make sure you’re using full copy returns only. No affidavit returns.

      On your other point, yes, Amazon and B&N get the same discount as Ingram and B&T. Amazon and B&N have their own buyers, and their business involves a huge volume. Essentially, other bookstores are using B&T and Ingram to get better pricing and to act as their buyers for their stores. Once upon a time, bookstores dealt directly with publishers, but they rarely do now, not even the big publishers. So if you want your books in all markets, you must price properly, and you must not use short discounts. That’s what we learned with Ella and through all of our nationwide contacts. Never ever use short discounts.

      Remember, though, it’s a business decision. You can choose not to play by the rules they set. That’s fine. Your books will get out there, just more slowly, and never in all venues.

  3. May 23, 2013    

    Thanks for this very clear account of how publishing has changed. I’d love to read your take on a new model for ebook sales: pay as you go. Author Laura K. Curtis recently blogged about how it could really benefit new authors: http://www.womenofmystery.net/2013/05/17/total-boox-pay-as-you-go-and-authorial-confidence/

    So please check us out at http://www.totalboox.com/ and let us hear what you think.

  4. May 22, 2013    

    Amazing compilation of information, thank you. I serialized Blue Hole in newspapers and the story actually increased circulation. The most successful was The Hannibal Courier Press where Mark Twain worked as a printers devil in the mid 1800’s. http://www.amazon.com/Mountains-Mystery-Suspense-Series-ebook/dp/B003VD22H2/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1369253915&sr=1-1

    Both Blue Hole and the SEQUEL River’s Edge are being serialized by the Summersville Beacon a newspaper in the Ozark Mountains. http://www.smashwords.com/profile/view/RTLOVE I have interest in Fishing Stories being serialized as well.

  5. May 21, 2013    

    “Before returns became part of the system in the 1930s, self-published books were common. Mark Twain self-published. Virginia Wolf self-published. Benjamin Franklin was the king of self-publishers. The difference was that back then there were fewer bookstores, and those bookstores operated like all other businesses: if they bought something, they were stuck with it, unless it sold to a customer.”

    One minor tweak to add to that regarding Mark Twain. He published his books on a subscription model, in which salesmen traveled their area with a copy of the book and took orders, door to door. I’m not sure how they dealt with bookstores, but the subscription model was a major source of his publishing income.

    • May 21, 2013    

      It was for many people/publishers. Most publishers operated on the subscription model because most people did not live near cities and still wanted books. Food for thought, eh? 🙂

      • James F. Brown James F. Brown
        May 22, 2013    

        Door-to-door salespeople in this day and age?

        Well, that’s a 19th Century business model, isn’t it? Not sure how that would work or be cost/sales-effective today with the Internet, the USPS, FedEx, UPS, etc. Not to mention how you would/could pay the D2D’ers.

        Perhaps a chapter-by-chapter online subscription for a book might work. But didn’t Stephen King try that, pretty much unsuccessfully? (BTW, his latest novel WON’T be available as an e-book.)

        • May 22, 2013    

          I meant the subscription model, not the door-to-door salesman model. Can you imagine? LOL.

          Lots of people are doing serials, btw, and doing them successfully. I am with Spree on the wmgpublishing.com site. The book is already done, so if you want to read it in full, you can order now. 🙂 Otherwise the chapters are free.

          And people can subscribe to your series, your publishing house’s books, your short stories, what have you.

  6. Catherine Catherine
    May 19, 2013    

    Thank you for such an amazing post. I have been wondering if I should enable EDC when I done paperback, so your (and Dean’s) post has given me a lot to think about and further up in the comments someone mentioned something about Ingram Spark which has me really intrigued. The publishing landscape is changing so quickly I am having a hard time coming up. But thanks to you and your wonderful blog you make it all clear and I feel least confused after I have read your posts.

  7. May 18, 2013    

    It has been brought to my attention that someone posted on some listserve for writers who have self-published for years that I supposedly said that writers shouldn’t use Lightning Source. So I am now getting spammed by people from that listserve who apparently don’t read the blogs they are commenting on, nor do they respect the blogger enough to find out who she is. I have not said do not use Lightning Source. Nor did I say that Createspace is the best thing since sliced bread. Nor have I ever said that POD or self-publishing is a new phenomenon or that self-published books can’t get into bookstores. Of course they can. It used to take a lot of work. It has just gotten easier because of a change the book distributors are making. That’s all I’m saying here.

    I suppose it’s too much to hope that commenters who don’t read the blog they’re commenting on will actually read the comments, but they might see this as they scroll down to type their little vehement rants. If that’s what you’re here for, go away. I am going to delete your comments as spam anyway, since most of you are so disrespectful. Stop wasting my time, please, and next time you post on someone else’s blog, make sure to read the blog first.

    • May 19, 2013    

      Didn’t mean for this to dry up all comments. The rest of you, proceed as normal. [whew] What a day yesterday. 🙂

  8. May 18, 2013    

    I’ve worked in publishing (at first, for other book and magazine publishers) since the early 1980s. I’ve been self-publishing for about 20 years. Some points:

    Self-publishing and micropress publishing have been around since long before the printing press was invented. Getting to more recent times, it’s unnecessary to use any kind of “self-publishing company.” You can perform or hire out to freelancers every single task a publisher does, and do it better than most “self-publishing companies.” Note, you can get books printed by a print-on-demand *printer* that is not a publishing company; all they do is print. However, you can also get short offset runs and these usually provide better quality at a lower unit cost. Personally, and I know many disagree, I think ebooks are an open invitation to piracy. Even ethical readers who are willing to pay have been trained by giveaways and repeated misconceptions about publishing costs, to devalue ebooks and expect to pay little for them.

    Since before I went into business, it was possible for self-publishers and micropresses to get listed by Ingram and Baker & Taylor. Although many publishers went/go through distributors, who among other things provide a kind of seal of approval, Ingram has had a number of small-press admission programs over the years. These come and go–though I *think* there is one currently through the Independent Book Publishers Association. I’ve been in Ingram since my second year of business. Baker & Taylor has also had admission programs but these are unnecessary, since if B & T gets library orders for your book they will put it in their database and order from you no matter what. And you can then set whatever discounts and payment terms you like, instead of being stuck with B & T’s. I have B & T on a prepay-in-full, they-pay-shipping, no-returns policy and I don’t give them great discounts either. If they get a library order, they’ll still fill it.

    Since before I was in business, self-publishers have been able to sell to bookstores and libraries. What you had to do–and what you still can do well–is compose a discount schedule/terms & conditions sheet, and mail it (or these days, you can email it) to bookstores and libraries with your marketing package. However, if you have a wholesaler, almost all the bookstores will order from the wholesaler. And if you sell through the big online bookstores, the vast majority of readers will order from them rather than directly from you, no matter how much you market directly to readers. You just can’t compete with those stores’ huge selection and other services.

    Note that Amazon and Barnes & Noble online automatically pick up listings from a number of sources, which from my observation include Books in Print, Ingram and used-book-search engines. Amazon Marketplace has always been an option for self-publishers and authors. No one needs CreateSpace. Really.

    For many years, I have been hearing about how technology was going to “level the playing field.” Websites were going to “level the playing field” for not only small publishers, but all small businesses, by making marketing easier. Then it was blogs. Amazon just listing almost every book in print in the US was supposed to “level the playing field” for self-publishers and micropresses. Print-on-demand and e-books were supposed to “level the playing field” by making production cheaper. Social networking (which however has been around since Usenet/Arpanet) was supposed to “level the playing field” by enabling authors to reach readers. Never mind the authors already had the website and the blog that were supposed to level that field, but didn’t–they assumed Facebook as the next new thing *had* to be better.

    However, the playing field still isn’t level. It never will be. Large businesses–such as Ingram, Amazon, the big chain bookstores, and the big review media–are far more powerful than any self-publisher or micropress. And they *really don’t want* a level playing field. It’s not that they are at all jealous or insecure. It’s that new technology means that thousands more books are published every year, thousands more books are reprinted every year, and fewer and fewer will ever go *out* of print. This means lots more competition for every book (your book!), all the time. The large businesses are not looking for lots more exciting, high-quality new books to examine, sell, review, or otherwise process. For a long time, these businesses have had way, way more submissions than they could possibly handle–and that number is exploding. They are looking for every excuse to weed out books–the books are from a vanity press, they’re from a POD publishing company (new term for vanity press), they’re self-published, they’re from a dinky micropress, they don’t have a huge ad budget–*anything* that will enable them to omit hundreds of books per day from any consideration and go home regularly at 5. And sadly, many self-published books *are* dreck.

    Going directly to readers doesn’t work any miracles. First, that has always been possible–for 20 years I’ve built most of my business on direct mail, first postal, now email. But readers are swamped too. With all those other new books out there, they generally see no pressing need to buy *your* book.

    I am not saying that no one can successfully self-publish. I’m saying that, despite a few superstar stories (are you reading this, Amanda Hocking?) it’s very hard work, there is a lot of industry prejudice against it, and there probably always will be. And yes that prejudice really matters. Getting glowing reviews for your book on a few blogs with a few hundred readers each just doesn’t match up to getting reviews (and not pay-for-play ones!) from Publishers Weekly and the other big review media.

    • May 18, 2013    

      Frances, clearly you are new to this blog and have no idea who I am or what I have done in the publishing business, nor have you read any of my previous posts (3 years worth now). Readers of this blog know that publishing is hard work; why wouldn’t it be? We’re trying to compete in an international professional, after all. If it were easy, anyone could do it.

      I love these dismissive comments I get about superstar authors, ignoring how many writers are now making a living at writing who never have before. And by living I mean six-figure incomes, and these are people who aren’t superstar authors. They’re doing it quietly. They’re doing it on e-books mostly, and that’s only 20% of the market. Now the rest of the market has come open to them in a way as easy to tap as e-books. Of course, I’m thrilled.

      The prejudice against self-published titles is going away. Readers don’t care who publishes the book. And you can be as negative as you want but that doesn’t change the fact that the industry is different now than it was six months ago.

      What you seem to be dismissive of is that this industry is in the middle of massive change. I’ve been in the industry as long as you have. I’ve owned publishing companies, worked for traditional publishers, owned many businesses including distribution companies, self published off and on since the late 1980s, and still believe that this change is unbelievably significant.

      Big businesses don’t want a level playing field? Really? You actually believe that big business is conspiring against the little guy? Big businesses want to make a profit any way they can. They don’t want to miss a gravy train, whether it’s self published or traditionally published. They realized they were missing a print gravy train, so they’re changing their policies. That’s all. No conspiracy to hold us back. Hell, if you have deep pockets, you can buy ad space and upfront placement in bookstores and promotion on Amazon or B&N just like the big guys do. If you remember it’s all about money, you do just fine.

      And yeah, reviews help a teeny tiny bit. But I’ve had many starred reviews from PW and other mainstream media outlets. They don’t have as big an impact on sales as you think. Nor does going on national television (I’ve done that), or having your book advertised in all the big markets, including the New Yorker (done that) and all of that stuff. I know and worked with lots of national bestselling authors, as well as lots of manufactured bestsellers like books “by” actors. You can promote the hell out of something, and it still won’t sell. It’s a myth that you can force readers to buy anything by exposing them to the product, through reviews or through ads or up-front placement.

      What sells books is word of mouth and patience. And–oh yeah–here’s the biggie. You have to write a good book.

  9. May 18, 2013    

    I started self-publishing my backlist OOP novels and collections of my short stories as ebooks via Amazon and Kobo in February. Response from readers has been good, but I get comments and emails from some who say they’ll buy me only in paper. Now I can deliver to that segment of my base and at the same time get into the distribution chain.

    I uploaded my first collection to CS today. I’m going to be fascinated to check the reports.

    • May 18, 2013    

      The reports from extended distribution and bookstore sales show up in big lumps throughout the month. They’re also about 2 months behind the sales on Amazon. (This is Createspace.) So if you know that your local bookstore ordered (and received) 50 copies, but you don’t see it the next day on your statement, that’s why.

  10. Sandra Hofsommer Sandra Hofsommer
    May 17, 2013    

    I’m not a writer, but I am a consumer and as one of those people who “never saw a book she didn’t want” I purchase more than the ordinary reader. Now that said, I have some observations.

    1. Our local B&N has had a Mother’s Day display for hard cover books that was buy one full price, get another for 1/2 price. Nice but I wouldn’t fall for it, not with Amazon allowing me to buy a new hardcover for which I cannot wait to come out in PB that will sell individually for 30-40% less. B&N’s discount card allows for 10 per cent, but that barely covers the cost of the local tax.

    Now, I will buy a hardcover that is not, in my mind, overpriced to begin with. I can read many hardcover fiction books in one-two days. I will not pay $27.00 to $30.00 for one of these books. In my mind, they are overpriced. If I really wanted the book, I would probably, however, pay $25 or less. And I know they will eventually end up on the store shelf for $5.99 or less in a year or, sometimes, even less. Most likely, I will wait for the trade paper if I want to keep the book on my book shelf.

    2. I receive review copies of books primarily through BookBrowse. And I always read them and either write a review or comment in the book blog if that is what is asked for. I also add reviews in Good Reads and Amazon and any other places where such a review can be published. I also make the books available to my friends and those in my book club. Such sites are wonderful for readers and for those active in book clubs. Many retired people are in multiple book groups that use these sites to guide their selections. So, I help “sell” books and am pleased to do so.

    3. Many book group members refuse to read books that are not in paperback or on library shelves. Libraries often buy a “set” of books and put them together for book groups. These sets are always paperback copies. More and more, friends have e-readers and prefer to download books for no cost from their local library or through Amazon Prime. But the titles in these programs are limited either to best sellers or to books no longer under copyright. Others will buy the kindle or nook copy which they can then share with other owners of those readers. However, if I have a choice between a $10.95 paperback and a $9.99 or 11.99 kindle edition, I will either use the library, get the paperback or order a used or new copy.

    4. I also give books I do not wish to keep to the library and also sell them at our church rummage sale for anywhere from 25 cents to 50 cents each. Local garage sale sellers will often sell mass market books for less. And they have plenty of buyers.

    5. While I have probably not told you anything new,I believe it is important that those who publish in whatever venue understand the vast variety of readers out there.

    BTW I am always amazed at how many readers never read a review or know the names of authors.

    • May 18, 2013    

      Thanks, Sandy. It’s great to have a reader perspective. It’s also great to see how you’re helping other readers find books. Thank you.

      And yeah, I don’t know the names of lots of well-known authors, and it’s my business to know. It’s a constant surprise to me how many beloved authors I’ve never heard of. They’re new to me–or to my students. (I always have my students go through a huge reading list.) Reading is a constant adventure, and that’s one of the things I love about it.

      • Sandra Hofsommer Sandra Hofsommer
        May 19, 2013    

        Thanks for being patient with my nonwriter comments.
        I find all this discussion about authors and publishing fascinating–it makes me much more aware of what happens before a book makes it to us readers and much more patient with Don’s comments about editors and publishers. He has just taken on a new book–a biography–which is somewhat different than the others. And it was one he hadn’t sought. And it comes at just the right time as he will not be teaching in the fall.

  11. May 17, 2013    

    This is amazing, and thank you so much for the research and the post! To all the fellow indie writers wringing their hands about how to get into bookstores, I’m going to send them this link.

    Just to check it for myself, I looked up my Createspace book (with the $10 ISBN allowing me to use my own publishing company name on the extended distribution) on Barnes and Noble. Sure enough, there it was, one print copy ready to ship in twenty-four hours. That just blows my mind.

  12. May 17, 2013    

    I’m reading this very slowly and carefully because I’m new to publishing. I’ve e-published 3 novels with a small e-publisher, Books We Love, for their services and because I figured that they could sell more copies for me than I could on my own. Next step is to publish with Createspace because I’ve heard Amazon can and will stop selling my books published by other POD’s if they so desire. However, I went to a workshop in Calgary, Alberta about getting my books into Chapters-Indigo in Canada, and was told by the Chapters rep that they will not take books printed by Createspace. So, I was thinking that I would have to use Createspace for selling books on Amazon, and someone like Lightning Source to sell my books on consignment with bookstores, or to a distributor. Any comment?

    Thanks so much for sharing this information. I was led to your site by someone with my local RWA branch.

  13. May 17, 2013    

    Sorry to hear about Ella, Kris, but all is not bad. If you’re a person who starts new ventures and none of your ventures ever fails to work out, then you’re being too cautious as an innovater. That’s what I tell myself, anyway, and it works for me. I think that’s because it’s true. After all, the only sure way never to have a failure is never to venture anything, and that certainly wouldn’t fit for you.

    So, congratulations. You’ve just passed another test.

  14. May 17, 2013    

    Kristine, I’m afraid your post shows some confusion about the workings of POD, starting with the fact that self publishers have been able to offer standard terms with returnability through Ingram via Lightning Source for well over a decade. CreateSpace’s Expanded Distribution Channel, on the other hand, does NOT allow this.

    Also, when BN.com says a book can be shipped in one to two days, it means the book is NOT in the warehouse. It means the book can be printed by Lightning Source and shipped by Ingram to B&N within that time. (BN.com does not order from Baker & Taylor.)

    You might be interested in my article on the EDC here:

    http://www.newselfpublishing.com/CreateSpaceEDC.html

    Aaron

    • May 17, 2013    

      Yes, I’m aware that publishers could offer returns for more than a decade through Ingrams. And yes, CreateSpace does allow for returns. They process the returns differently than LS does. Your link is from 2011. That’s decades ago in what Createspace and others are doing. In other words, your information is very, very out of date.

      What’s different is the discount schedule offered to bookstores by B&T and by Ingrams. That’s the huge change.

      Again, the change is in what B&T and Ingrams are doing for bookstores. It doesn’t matter if you had limited returns 5 years ago. The terms to bookstores were so onerous bookstores did not take advantage of that (if, indeed, it was an advantage at all). Now the terms to bookstores through B&T and Ingrams are the same as for traditional publishers. That’s huge. Bookstores are confirming this. I’ve confirmed it. Others have confirmed it.

      It’s a major, major, major change in the industry and it’s for the good of indie writers.

      • May 18, 2013    

        CreateSpace may allow returns to the CreateSpace store, but it does not allow returns through the Expanded Distribution Channel. It also does not allow standard discount terms through the EDC, because of the cut it must take for its own profit. There has been no news of any change.

        Ingram’s terms to bookstores for Lightning Source books are determined by the publisher, not by Ingram. Ingram just takes its standard cut, passing on the remaining discount. Nothing has changed there to match what you have described. Ingram does not even stock those books — they’re printed by Lightning Source as needed, despite faux stock figures in the Ingram database. I have been publishing through Lightning for over a decade and have access to the Ingram data service as well. If there are more Lightning books at Ingram at standard terms, then it is only because more publishers have chosen to have them sold that way.

        When you talk about Baker & Taylor’s terms for “POD books,” this is meaningless. B&T primarily handles three kinds of POD books. It sells some books from Lightning Source. It sells books from CreateSpace through the “Library” channel of the EDC. And it sells POD books from its own business, TextStream. All these fall under completely different business arrangements. If you believe that somehow the same terms are going to be magically applied to all three classes of books, then you need to look into it further. Most likely, the arrangement you describe applies only to TextStream, which hardly anyone uses today anyway.

        I’m sure you’re right about the changes in the way bookstores are ordering. But nothing major has changed recently in POD distribution to bookstores in the U.S. through CreateSpace or Lightning Source. That is the reason my article has not been updated since 2011!

        Unless you’re willing to do the hard work of studying and understanding the diversity of POD in the U.S. today, I suggest you hold off on making major pronouncements about being the only person with an understanding of today’s book scene.

        Your advice to sign up for the CreateSpace EDC is particularly dangerous, as this is a distribution method that NO serious publisher should employ. For one thing, to qualify for B&T distribution through the Libraries channel of the CreateSpace EDC, YOU HAVE TO USE A CREATESPACE ISBN. That’s right, you’re asking publishers to identify their books as CreateSpace publications instead of their own.

        As for the Bookstores channel of the EDC, that is managed by Lightning Source! If you go through EDC, you’re only losing control of your terms and giving CreateSpace an unnecessary cut.

        CreateSpace EDC is for amateurs, not professionals. Please stop spreading confusion by telling people otherwise.

        • May 18, 2013    

          You are missing my point, Aaron.

          I am not talking at all about the way that Createspace and Lightning Source are doing business. I am talking about the way that book distributors are doing business with bookstores.

          And I’m also saying that the distinction between amateur and professional is something that no longer matters.

          The fact that you haven’t updated since 2011, the fact that you’re waiting for someone to give you “news,” means you are behind.

          Yes, in the library channel things are still developing. But gosh, did you notice a mention of libraries in my blog about the way the terms that book distributors are offering bookstores???? I’m talking books to bookstores, and the way that bookstores order, which has been a huge barrier for self-published writers. That barrier has disappeared.

          And I’m hearing that from bookstores. You know, the people I’m writing about here? Many of them from across the nation have let me look at their accounts and the way that they order. The difference is there, it exists now where it didn’t before. As for B&T and Ingrams, they’re struggling to find a way not to label self-published books so that if a self-published book takes off, they can make money from distributing it. That is the source of the change.

          Will there be more change? Of course. But this change, offering high discounts to bookstores with good credit and large accounts, is huge.

        • Dean Wesley Smith Dean Wesley Smith
          May 18, 2013    

          Aaron,
          A couple of comments here on your posts. You are correct that B&T and Ingrams have different programs for different forms of books and levels of publishers. All such programs deliver books to stores and libraries (or not) in one form or another with one level of discount or another, depending on the program.

          That is not what Kris was talking about, and far, far too complex to deal with in a simple blog. Kris was talking about one aspect: Getting indie published books to bookstores.

          Since the start of these programs, indie published books were labeled as such and allowed only a 5% at best discount to bookstores wanting to order such a book. That stood both through CreateSpace and LightningSource and Lulu. (Although, since Ingrams owns LightningSource, they allowed some authors to set short discounts that made sure bookstores would never see the listings at all.)

          Ella Distribution was started to help indie publishers get to bookstores with decent discounts, meaning up to 50% discounts to bookstores.

          In the meantime, without fanfare or announcements, both Ingrams and B&T dropped some of their coding and discount restrictions FOR SOME BOOKSTORES that allowed top stores to buy an indie published CreateSpace or LightningSource book for upwards of 45%, depending on the bookstore status with the distributor.

          (This was caused, I am told by a source, because so many medium traditional publishers are moving to using POD services for second printings and short-run titles.)

          Now, for example, in one store, we saw all the WMG books at 25% instead of 5% and in another store we saw WMG books at 45% and in yet another store we saw WMG books at 5%. It is store dependent on the store’s status with each distributor. All standard business which has been going on now for decades.

          What changed was that the LightningSource and CreateSpace programs were opened up by the distributors. The extended distribution system, IF THE BOOK IS PRICED RIGHT allows indie authors to get their books with decent discounts into bookstores. That’s what has changed in just the last few months. It was not announced.

          And let me stress again, the indie publisher must price the books correctly.

          Would a traditional publisher of any size use the portal that indie authors use? Some do, some don’t, depending on the need. Most do not.

          But Ella was designed to help indie publishers with paper books priced right, to get to bookstores with decent discounts. That was the gap we were trying to fill.

          Not to libraries. That’s another shifting topic that is still settling.

          The gap that we were trying to fill, that Kris was talking about, was closed when Ingrams and B&T dropped some of their discounting restrictions on books coming through certain channels.

          And I have no idea what you mean by losing control of your terms? You know the terms before you sign up. All in the terms of service.

          So what changed on the surface does not seem large. But it was large enough to shut down a new start-up company aimed at helping indie publishers. It was major enough to help bookstores get their local author’s books and make a decent mark-up on the book.

          It was not done with fanfare or a huge announcement because, honestly, very few people would understand or care and they are only offering the better terms to their better bookstore customers.

          But to indie authors, it’s major. All indie authors can now, with some learning, can get their own books into paper, price them right, and have stores order them for customers.

          And that’s what Kris and I have been talking about.

          • May 19, 2013    

            “… and in another store we saw WMG books at 45% …”

            This is the part I’m trying to work my brain around. Are these WMG books coming through Create Space’s Extended Distribution? Because at that discount to the bookstore (plus the cut that Create Space itself has already taken), it seems to me like the distributor would be taking a loss on those sales, or at least they can’t be making more than loose change.

            Are the distributors really willing to cut their share so low, just to make sure the books keep flowing through their hands? And to take returns, too? Wow!

            • May 19, 2013    

              Yes, Denise. They’re through Extended Distribution. Distributors will take a low share to keep their preferred customers happy. Remember this is through preferred customer bookstores, not the average bookstore. So you can’t apply this across the board. Just on “desirable books,” meaning books that someone has requested (usually) or has received good word of mouth (often) and only through bookstores with stellar credit that order many, many books. It seems to me that most businesses will occasionally lose money to satisfy their preferred customers. And remember, Amazon’s entire business model (Walmart’s too) often allows them to take huge losses on products just to take command of the market.

  15. May 17, 2013    

    I have learned so much from all of you. Seemed it was time to share something that might be of use to others, based on my unusual experience within the publishing industry.

    https://www.goodreads.com/author_blog_posts/4210026-seismic-shocks-and-publishing-industry-predictions

  16. Thomas K. Carpenter Thomas K. Carpenter
    May 17, 2013    

    Kris,

    Very sorry about Ella, but exciting news overall.

    On the now defunct Ella website, there was a listing of page counts and prices to get into Ella. Do you think we’ll need to follow any similar guidelines for the current distribution methods, meaning they expect certain pricing for certain sized books, or we should just price based on profitability of extended distribution?

    @Randy T. – I put all my books in Extended and sell a handful every month, though it comes and goes in waves.

    Thank you as always for your excellent reporting! 🙂

    Warm regards,
    Tom

    • May 17, 2013    

      The pricing was all designed to make the distributor/bookstore some money and the writer a good deal of money on each copy. So Ella’s pricing is what we’ll be using going forward. So if you captured it, then use that, imho.

      • May 18, 2013    

        Does anyone have a copy of this to post?

        • May 20, 2013    

          I would like to see this as well.

          • May 20, 2013    

            Dean has a less complicated version of it on his site: http://www.deanwesleysmith.com/?p=8496. Ella’s version takes into account distributor discounts which, if you just put your book up on EDC so that you make about $2 per book profit, then your price is right. Note also that you will not get into the catalogues that go to the preferred bookstores if your price point is too low. If no one can make a profit on that book, even a tiny one, then no one will bother putting it into the system.

  17. May 17, 2013    

    Terrific column. My only complaint is that I was guzzling from my water bottle when I read your analogy comparing writers to cats sniffing each other’s butts. Half the water I was drinking sprayed all over my computer monitor and the other half went up my nose. 🙂

  18. May 17, 2013    

    Sorry about Ella too, Kris.

    I just posted a rather negative comment on Dean’s blog (not about Ella, though).

    But yes, the stigma about self-published books wanishing is great news.

    If there are new people with new mentalities in bookstores, it explains why you are selling more paper books.

    My own experience, though, makes me very wary about booksellers and ancient practices. You need time to change mentalities. Mentalities evolve much much slower than technology, in my book.

    Sorry, maybe I’m too much of an idealist, but in my opinion, the field will never be leveled in bookstores as long as you have coop, and books presented on the spine near others face up.

    • May 17, 2013    

      EAch bookstore is different, Alan. We have several in this tiny town of 7,000 people, and each bookstore carries different inventory and keeps the books in different ways. So you can be pessimistic about this if you want to, but I don’t see why. Bookstores don’t care who published the book. They just want to get it affordably so they can offer it to their readers.

      Sure, one bookstore might specialize in snobby books published only by literary presses, but another store will specialize in mystery books that get great word of mouth. You want the mystery store to get your book if the word of mouth starts on the book. So this is good news.

      • May 18, 2013    

        Why I would be pessimistic ? Because one day, I did come in a bookstore in Paris with my books to talk about them, and the bookseller told me : “we don’t allow authors here”.

        She should have put a board on her vitrine stating : “dogs and authors not allowed.” Seriously.

        What I’d like to advice other authors is not to be pessimistic, but cautious : there are many power struggles in publishing, and distributors or bookstores will find it much more easy to screw an indie than a big publisher.

        My advice is not to be taken as : you should not do it. For myself, if one day I can try it, I will. Besides, you have class actions in America, and authors are talking to each other. That’s a great strenght.

        But believe me, I will be vigilant.

        • May 18, 2013    

          Going directly to bookstores in person is a whole different matter. And it’s very different in France, which I learned the few times I did booksignings there for my various publishers. It’s not common there. The stores don’t encourage it and find it rather odd. Instead, I met in cafes with book buyers and my publisher, which I found odd. 🙂 I had only one real American-style signing at FNAC, which my publisher set up.

          Bookstores here in the states are being inundated by self-published writers who don’t know the etiquette, published writers whose traditional publishers want them to “promote” but won’t tell them how, and traditional publishers who want signings, etc. So most bookstores just say no. It costs them money and they rarely get out what they put in. Better to let bookstores know about your work through their trade publications, reviews, word of mouth, etc.

  19. May 17, 2013    

    I still haven’t quite wrapped my mind around this whole thing, even after reading about this at Dean’s blog, and now here. I feel like I’ve stepped through a gate, and suddenly I’m in a whole new country.

    It’s a huge change — and for the better — for us indies. Now I really have to push and get that print version out! 🙂

  20. Thomas E Thomas E
    May 16, 2013    

    *thinks about contents of post*
    *gets headache*

    Okay, so did you just say that 80% of the market just opened up for indie authors, when with only 20% of the market people have been getting rich?

  21. May 16, 2013    

    Your quote paraphrased, “What seemed viable in November 2012 was no longer needed by April 2013.”

    WOW! It’s amazing how fast this industry is changing, and for the good of indie writers who are building reader bases. I’m now more excited for my future than ever before. Thanks for sharing the change.
    I’m reading “Free” by Chris Anderson (the writer who wrote “The Long Tail”.
    Between the new marketing tools and distribution channels available to writers, this is without a doubt the best time to be a self published writer—but tomorrow may be even better.

  22. May 16, 2013    

    Chills, Kris. That’s what this column gave me today. Chills.

    >>The playing field has just leveled.

    Wow. I’m not sure what else to say, except I’m so glad that everything I have is already in print.

    I’m very sorry about Ella. I was excited about the possibilities of it as well.

    Thank you so much for doing the research, and then sharing it.

  23. Dee Dee
    May 16, 2013    

    My lack of business knowledge is showing – but better to ask than stay quiet and unlearned, right?

    As far as returns go – let’s presume you’ve priced your book so that is gives you a profit of X or $1.00 (we’re using easy math)with the bookstore paying $5.00 to purchase a copy with a list price of $10(again, for simple math’s sake, not researched amounts). The bookstore returns it for credit. The distributor places its next order for ten copies for another seller and passes the return cost back to you?

    So if your profit is X and the cost to the bookstore is 5x, it costs you 5x for each return? Or, say – you have to sell at least 5x the returned amount in order to not pay out of pocket?

    So if the next order is only for two books, you get billed 5x – 2x?

    Am I misunderstanding this completely? I’ve read and re-read and I’m sure that I’m still missing it.

    Help?

    • May 16, 2013    

      You misunderstood, Dee. Here’s what happens.

      Createspace prints books to order. So Bookstore A orders 5 copies of my book, sells 4 copies, and returns one for full credit. One month later, Bookstore B orders 5 copies. Createspace will print four and add that fifth copy from the previous order into Bookstore B’s shipment. Or, if the book never made it back to Createspace, then Ingrams will do that. You won’t get charged for the return. You’ll never even know it happened.

      Is that clearer?

      • Dee Dee
        May 17, 2013    

        Yes! Oh thank you – that makes much more sense. I was picturing the ripped off front cover as a return versus the sensibility of an actual returned product.

        Thank you! =)

  24. Sally Sally
    May 16, 2013    

    Google is fixin’ to expand Google Wallet this year so it’ll work basically like PayPal (at least for US debit cards to start with). Pretty soon you’ll be able to send money from your Gmail account by clicking an attachment icon just like you do for pictures, video, or documents. It’s literally called “Attach money”.

    So that means there will be ANOTHER way for people to buy things and leave tips soon-ish!

  25. May 16, 2013    

    Kris, this is amazing. This is like one of your sneaker waves. Getting people out of old paradigms is like moving mountains, especially corporations in an industry like publishing.

    This changes everything. Indie just went mainstream. The National Book Awards is easing its way into this reality. They now allow books from small/indie presses, provided the publisher publishes more than one author.

    I’ve always thought one of the strengths of indie publishing and indie bookstore was their ability to be agile. In the future I think that strength will grow and they will form a new system that is more responsive to readers and more efficient and environmentally responsible. The benefit to writers is down right exciting.

    I’m just stunned that it came this fast.

    Great post, Kris. Just great.

  26. James F. Brown James F. Brown
    May 16, 2013    

    Hi Kris,

    Wow! Obviously, the events of April were (and are) a real shockaroo for Dean and you, emotionally, professionally, and personally. Especially with regards to Ella Distribution’s planned rollout and sudden demise.

    Yes, this all is great news for indie writers and publishers. There is always opportunity in chaos. But I think it won’t be easy or serene as events play out. The implications of this sea-change, IMHO, will take some time to be realized and become evident. One possible fallout is the end of the odious returns policy in place since the 1930s; I believe that would be welcomed by writers and publishers, if not necessarily by booksellers.

    I’d like to express my appreciation to Dean and you for blogging about this even as you yourselves are coming to grips with this new reality. I’m looking forward to what both of you have to say in the coming months. Thank you!

  27. Randy T. Randy T.
    May 16, 2013    

    The problem with Amazon’s extended distribution calculator is that it forces you to raise your price quite a bit to simply get in the black. Frankly, I can’t see many readers paying 15 bucks for a paperback from an unknown author.

    I put the first novel I indie published into expanded distribution. After three years, I have sold ebooks, paperbacks thru Amazon… and not one single copy through expanded distribution. Zero, nada, bupkes. I took it out of expanded distribution a few months ago and dropped the price to a more reasonable rate. I started selling more ebooks and paperbacks thru Amazon.

    I have to agree with Abigail… unless you have a reasonable following, it isn’t worth it.

    • May 16, 2013    

      Completely incorrect, Randy. Of course, you put a $15 price tag on a trade paperback. Readers pay for unknown writers all the time. Every writer is unknown to a reader–even if the writer is famous–if the reader has not heard of that writer. So get that really silly argument out of your head. If traditional publishing had that idea, they would have closed shop years and years and years ago.

      So you took your books off expanded distribution about the time that the distributors changed their policies. Your experiment, 3 months ago, is as irrelevent as Ella became. Time to price the books properly and put them back on extended distribution.

      [sigh]

  28. May 16, 2013    

    This is amazing news. I’m sorry to hear that Ella had to be shut down though.

    Also, the one thing I picked up on was that adult and YA books were top sellers. Is that right? Should I be writing in these genres/categories? Is there less hope for indie authors writing in other genres?

    Can’t wait to read your future blog posts about all this. Thank you, and Dean, so much.

    • May 16, 2013    

      Katya, you are free now to write what you want to write. Stop looking for someone/something to tell you what to write. If you’re chasing trends, you’re always behind. If you’re writing what you want to write, you might set trends. Write a lot. Write good stories. Have good covers. Make sure you know what a genre is and where you fit. Write good blurbs. That’s all you can do.

  29. May 16, 2013    

    Kris,

    First, my condolences on your business venture. I’ve been there myself and it does indeed sting. On the upside the news could hardly be any better, and your post certainly got the wheels turning.

    The first question that entered my mind was which distributor will the indie stores prefer? Createspace is, after all, Amazon. Would they be more willing to deal with Lightning Source, who offers similar numbers, for just that reason? Would the smart move be to go through CS for everything Amazon, and through LS for everything geared toward the indie stores? What about hardcover’s? Audio?

    My mind is racing.

    • May 16, 2013    

      I had the same question, Randall. If you have your own ISBN instead of Createspace’s ISBN, you should have no problems with indie stores. Make sure you are listed as the publisher, not Createspace.

      I’m not sure if most indie stores care or know that Createspace & Amazon are linked. I think that’s a writerly thing to know. I know that one bookseller I talked with this past week had no idea. They’re paying more attention to Amazon’s imprints than Createspace. We’re using Createspace for ease at the moment, and venturing into Lightning Source more slowly. And definitely do audio. It’s a huge part of the market.

      Have fun. 🙂

      • May 16, 2013    

        With CreateSpace you can do both: have your own ISBN and theirs. I loaded up my title using my ISBN and went with the extended program. That means I’m not eligible for B&T – however, if you load up a second copy using CreateSpaces ISBN AND disable all channels except Baker & taylor/libraries then you can do both. The only problem I see are: whether or not CreateSpace will list you as the publisher on the edition which uses their ISBN and what impact that may have. It shouldn’t impact Ingrams, Amazon, etc.

        • May 17, 2013    

          OH, wow! Thanks for sharing this. Makes perfect sense, but I would not have thought of it. Hmmm…got some work to do now. My publisher chores keep growing!

        • May 17, 2013    

          It’s for that very reason that I choose to own my own ISBN’s. That way I have total control regarding how my books are presented. With LS and Bowker you maintain control of your metadata. You also are not limited to only a few words or genres to attach to your book as you are with CS. If you have one PB version through CS and distribute it through them to Amazon only you’ve covered that channel. If you have another PB version through LS and distribute that to everyone else you’ve covered everything and given the buyer who is reluctant to buy from CS an alternative. (Yes, I personally know of bookstores that refuse to buy from CS as they view it as aiding their competition, I don’t agree, but it’s their business to run as they wish)

          The other issue is that CS does not produce hardcover versions (yet?) and there are a lot of diehard hardcover readers out there.

          Will this prove to be the way to go? Today, maybe. Tomorrow, who knows. I’m sure Kris and Dean will crunch the numbers with their combined wisdom and let us all know in their upcoming posts.

          • May 17, 2013    

            Traditional publishers often do more than one edition at the same time. YOu’re right. At the moment, CS doesn’t do hardcovers. So nothing wrong with doing a hardcover through LS, and a trade version through CS. Or two different trades with two different covers with two different ISBNs from two different companies. REaders are used to that kind of thing.

    • May 17, 2013    

      I hear that Ingram is going to be coming out with their own version of POD, called Spark, very soon. Possibly as soon as next month. A friend of mine talked to an Ingram rep when she was at RT.

      • May 18, 2013    

        From Blank Slate Press: http://blankslatepress.com/tag/ingram/

        “And finally, back to distribution, Ingram took the opportunity to formally announce Ingram Spark—a “new and improved” service designed for small publishers that will roll out later this year. I learned that very small publishers (those with under 1 million in sales…uh, yeah, I fit in that group), makes up 20% of the publishing industry, and Ingram is perfectly positioned to serve that 20%.

        As the largest wholesaler in the industry, Ingram serves over 200 ebook retailers in over 150 countries. They have 2500 partners, they handle 11 million titles through 3800 channels, and can output a different book every six seconds. But still they see room for significant growth catering to that 20%–as well as working with many of the major publishers who use their services (including O’Reily Media who just closed their last warehouse). Ingram Spark will be much easier (according to the Ingram folks) to use than Lightning Source today. It will be “easy, quick, and free” and will provide one interface for POD and ebooks.”

  30. May 16, 2013    

    Thanks for the explanation. I had to make a correction to my B&N listing and was amazed to see the paperback listed.

    Unfortunately, the B&N listing for the paperback doesn’t contain the book description,author info, or reviews. Where are they getting their product info: from Amazon, or someone else? How do I correct this?

    Thanks.

    • May 16, 2013    

      I don’t know who they’re getting the listing from, Jill. I noticed the same problem on Book Warehouse. I’m sure we’ll find out soon enough. 🙂 Good to know your paperback is listed. Can you get B&N to link up the two? That way, your Nook description will be on the paper book.

      • May 16, 2013    

        My info is correct and complete at Bowker’s and Amazon, so I have no idea what happened. I’ll have to sniff around a little to find out how to link titles at B&N and update info. Will let you know what I learn.

        Sorry to hear about Ella! I had your open submission date highlighted on my calendar.

        This is such wonderful news.

        • May 16, 2013    

          Found this on the B&N main site (not Nook Press):

          “For Books
          If you have any corrections, you can email them to corrections@barnesandnoble.com. Remember to include the ISBN in all your correspondence and to be specific about the changes that need to be made. Please include your name and contact number for verification purposes.”

      • May 16, 2013    

        I’d be interested to find out how to correct it too, especially since I have to go to B&N through another channel and can’t go to PubIt direct. This could be a big challenge for us non-US indie writers. My paper copy is through Createspace and my B&N Nookbook is through D2D. How would those be hooked up? I hope someone is figuring that out!

        • May 17, 2013    

          Good news. My paperback and ebook are now linked. I’m not sure if that was done automatically by B&N, or if it was prompted by my email.

          I’m using D2D, too, and have found them very responsive. Why don’t you write to them and ask?

  31. May 16, 2013    

    Wow, Kris – that is a huge blog about a huge opportunity for all of us indie publishers. I take that to me that since my books are up on create space anyone can go to a bookstore and order them. I’ll have to give that a try.

    Thanks again for all the work you put into this blog.

    • May 16, 2013    

      Make sure you’re in extended distribution, Pete, and your book is priced correctly.

      • May 16, 2013    

        Priced correctly?

        • May 16, 2013    

          Yep. Dean’s done a number of posts on this. Price it so that you make money, instead of losing money.

  32. May 16, 2013    

    Holy Shit… oops. Just…wow.

  33. May 16, 2013    

    So sorry to hear about Ella, Kris. I thought it was a great idea; I was looking forward to submitting my books in July. I posited the same question to Dean over on his site, but I wonder if (with the exception of the big NY publishers, who seemingly prefer to keep their heads in the sand), the big companies (B&T, Amazon, etc.) are making it very difficult for smaller, independent companies to start up and fill needs in the marketplace. I think it’s still doable, but the landscape shifts so quickly, it takes a lot of foresight (bordering on visionary) and a very quick start to beat the big companies to market with innovations.

    • May 16, 2013    

      Well, if you’re talking about a distribution company, you’re right D.J. It’s harder now. But if you’re talking about a publishing company, it’s easier. Much easier than it ever was. So six of one, half dozen of another. 🙂

  34. ABE ABE
    May 16, 2013    

    “The playing field has just leveled.”

    This is so exciting – thank God I read your every word as soon as it comes out.

    Makes me feel connected – donation sent.

    Truly sorry your distribution company was a casualty, after all that thought and preparation. It is good to see how nimbly you are able to wrap it up by being connected and digital, but it’s too bad all that good work went for naught.

    I wonder why your tech people who noticed the pattern didn’t mention it sooner, but then I saw the timeline: Nov. 2012 to April 2013 – a very short time, business-wise. Ack!

    • May 16, 2013    

      And the website went live in February, so our tech folks were really on top of this. Not all the work went by the wayside. We learned a lot and we can salvage some of it. So we came out of this a bit poorer in money, but much richer in knowledge. And yes, the leveled playing field is soooooo cool.

  35. May 16, 2013    

    So does that mean I’m offering limited returns on my print books whether I want to or not, or does B&T just eat the return until the next order comes in?

    And what do you mean the roads can just fall away randomly??? How do you live out there??? (Says the born-and-raised Midwesterner.)

    Great post, thanks for sharing all this amazing info!

    • May 16, 2013    

      You’re offering full returns if you’re in extended distribution, Mercy. B&T eats the returns until the next order comes in and you’ll never see it. And yes, roads fall away out here. Houses too. And property vanishes into the sea. 🙂

  36. Jack Hovenier Jack Hovenier
    May 16, 2013    

    Kris,

    I read Dean’s post, and then read your post. Wow. Wow. Wow.

    First, I’m sorry you had to close Ella Distributing. While it looks like the right decision, it hurts to have great people doing a fine job and having to close down. One of the saddest images for me is a cute restaurant with fine staff, a first-class menu, tasty food but no customers. It happens. I remember an excellent Thai restaurant twenty years ago in Salt Lake City that had everything going for it, except nobody in Salt Lake at that time wanted ethnic Thai food in the early 90s.

    You are, in my opinion, spot on with your analysis and decision. This is great news for writers and is a game changer. I noticed in Publishers Weekly yesterday that according to Bowker, books sales by channel (dollars) are 44% e-commerce. I believe the chart (5/13/13 PW, page 4) represents eBooks and print books combined. What that means is 56% of books are sold elsewhere, and assuming the Bowker numbers are eBook and print combined, most of the 56% sold elsewhere are print books. Despite the eBook “revolution” most books are still sold in print and to think like a publisher, writers have to grab all the channels of distribution they can. Having the ability to use extended distribution on Createspace and have a competitive product through Baker & Taylor and Ingram’s is a game changer!

    As you know, I recently published Richard Bach’s new book, Travels with Puff. Because the book has more than 175 interior color photos, I couldn’t do print on demand and had to do a print run and use a traditional distributor so I could get distribution in book stores and an affordable cost of goods. My experience was great in that I got an excellent price on a 250 page all interior hardcover color book (under $2.50/copy), secured a well regarded, responsive distributor, and we have sold a lot of the first print run thanks to Richard’s fans and some good luck. The book is now in most Barnes and Nobles, and many independent books stores. However, if this book had been black and white interior, I could have provided the bookstores a great print on demand book with similar margins to what I have now, without spending $20,000 on the print run! That’s a HUGE difference. If I can make a similar profit without upfront costs, I can carry more titles, take more risks and make more money. Overhead and upfront costs are a killer and limit the choices I can make.

    Prior to this, print run books distributed through publishers and traditional distributors enjoyed a huge competitive advantage. Now, writers, or others who have copyright, can get current and backlist titles into book stores because the stores will have similar terms from print on demand titles as they get from print run books through traditional publishers and distributors. I may be overstating things, but it looks as if the last great barrier that print on demand and independent books had to go through to compete with print run books just collapsed. At the very least, the traditional print run publishing dike is leaking all over the place and a flood of independent books seamlessly flowing into traditional channels of distribution seems inevitable.

    I’m really sorry for the impact on the Ella Distributing family and really excited about the potential for writers and small publishers. I think I have a clue now about some of the business challenges going on while Dean was posting about writing his recent ghost novel. Thank you for trying this business and good luck to the Elle employees and I hope the costs you invested weren’t too high. As always, thanks for writing. I owe you another “tip” for sure!

    Jack Hovenier
    Nicetiger Publishing

    p.s. Will you please share this with Dean? I didn’t want to post on this site too. Thanks!

    p.p.s. I’ve lived near the Pacific almost my whole life. I loved your metaphor. The house I live in now is about 50 yards from the Puget Sound (depending on the tide) and I always tell my son that it’s not IF our house gets flooded, it’s when it happens will we be living there? The beach changes constantly and my entire home and most of my favorite belongings are subject to the whims of Mother Nature. That said, I choose to take my chances because I love living on the water.

    • May 16, 2013    

      Thank you for the kind words. It’s nice to have someone with your business experience concur with our analysis.

      I may be overstating things, but it looks as if the last great barrier that print on demand and independent books had to go through to compete with print run books just collapsed.

      You are not overstating anything. That’s exactly what happened and it’s fantastic news for all of us.

      (And I will forward to Dean.Thanks!)

    • May 19, 2013    

      Jack, just to let you know–if you can qualify for an account with Lightning Source, they can now do full-color interiors–and hardcovers, both case laminate and actual cloth binding with dust jacket. More expensive than b/w versions, of course, but the quality’s good and it’s POD so no inventory.

  37. Mike Southern Mike Southern
    May 16, 2013    

    This explains a lot to me, Kris. I have some nonfiction books that have been selling well as ebooks, I had also done CreateSpace paperbacks that were selling pretty well through Amazon, but I didn’t have the money to get the extended distribution when I first did them. Last month I was finally able to afford it and did so.

    In the first half of this month, I have already sold more than double what I normally sell in a month and I couldn’t figure out why. While I doubt that I’ve suddenly turned up on a lot of store shelves, the listings haven’t shown up on B&N’s website yet either. This article sure helped shed some light on where my increased sales came from and has given me hope for increased sales in the future. Thanks!

    • May 16, 2013    

      Yeah, we’ve been noticing that too, and wondering what was going on. Then we figured it out. 🙂

  38. DeAnna DeAnna
    May 16, 2013    

    Boggle.

  39. May 16, 2013    

    Wow. I’ve been following the Ella Distribution story since y’all first announced details–I was not expecting to hear you’d had to shut it down because it’s already obsolete! I’m sorry all of that hard work won’t pay off the way you wanted, but thank you so much for informing the rest of us of the latest rapid shift in the publishing world. That is amazing.

    Love the road analogy! Makes me think of the Scouts’ motto: Be Prepared.

    I’m really excited about this! It is very cool (and encouraging!) to see POD books finally being integrated into bookstores alongside everything else instead of being treated like the redheaded stepchild.

    Thanks, Kris!

  40. May 16, 2013    

    The news about Ella seriously blows my mind. For a company to be obsolete before it even gets started shows just how FAST things are changing.

    I wasn’t going to ask about word-of-mouth. LOL I’m more curious about what you think caused B&T’s change of heart. Are they hoping to cash in on the next Fifty Shades of Gray or Wool before the BHPs get their hands on it? Or are they seeing enough of your “sunken grade” signs that they are trying to keep their own businesses relevant?

    • May 16, 2013    

      We don’t know what caused B&T’s change of heart. I suspect it was many things, including Ella. B&T followed us from the start on Twitter and it was not an autofollow. Also and more importantly, they saw books like Barry Eisler’s latest get marginalized by their system, when they know that the book would sell if they treated it like traditionally published book. Dollars win every time. And they were losing money by placing a stigma on books that sell. That’s just good business, and they pulled it off. I’m sure too that booksellers helped by continually asking for discounts on this indie title or that indie title. So it was steam engine time, and they already had a locomotive.

  41. May 16, 2013    

    Hey, Kris. I have read your Business Rusch every week for a couple of years. I really appreciate your sharing your knowledge with us.

    This week, though, I think you’re overlooking something important. Maybe it doesn’t impact an author at your level, although I find that hard to believe. If you put a book in extended distribution on Create Space, resellers take that lovely discount you’ve given them, and they use it to undercut you everywhere you try to sell your book online. The Passive Voice mentioned this problem last year. It hasn’t gone away – http://www.thepassivevoice.com/02/2012/reasons-for-a-trade-paper-edition/

    I notice that resellers are doing the same with your books on Amazon. Your books all have “new” listings from other sellers that are a few dollars less than yours, and I know that you got a much lower royalty on the books that those resellers purchased from you, which are now undercutting your Amazon listings.

    I list the first Cowry Catchers book for $12.50. When someone buys it from Create Space, I get 49.44% (6.18 per book). When someone buys it from Amazon, I get 29.4% (3.68 per book). If someone bought it in extended distribution (if I still listed it there), I would get 9.4% ($1.18 per book). That’s a huge difference. Back when I was listing the book in extended distribution, 9.4% was all I ever got for most books, because the resellers immediately grabbed them and undercut my listings. That percent is all most authors will ever see per book if they use extended distribution.

    If the author can command huge sales from other bookstores, then maybe it’s worth it. It’s like selling books for 99 cents. If you can move hundreds of thousands of them at that price, but not at $3, then 99 cents is worth it. But for the average indie author, no. No, it isn’t!

    • May 16, 2013    

      Sigh, Abigail. Dean’s dealt with this. I haven’t. (I saw PG’s article, and shrugged then. I shrug again here. [shrug])

      Look, discounters exist. They always have. If you have a traditionally published title, and you signed a relatively good contract, you get zero royalties on deep discount books. None. Sometimes you get 1% of the discounted price. Considering that at Christmas, I saw bestselling titles in Staples for $2.99 in hardcover, I know those authors got almost no money at all.

      The fact that we as indie publishers are complaining about a standard industry practice that knocks a few dollars off on many titles (not all) is rather silly in comparison.

      Is it a problem? No. And in some cases, not all, you’re still getting paid on your cover price, not on the sales price. It depends how the book got to the discounter. Most of ours got there after the discounter purchased the books through extended distribution. (yes, we tracked it.) You can’t tell, and if you waste your time chasing it, you’re…well…not writing. Write more, worry less, imho.

      • May 16, 2013    

        Kris, you’re one of the people who taught me to think about business. Respectfully, this response sounds like you’re telling me not to worry my little head about business and not to think about all those silly numbers.

        To be clear – I’m not worried. My day job involves taking people’s lives in my hands. I worry when I lose an airway in the operating room. I do not worry about books!

        My opinion of extended distribution does not shave anything off my writing time. I just don’t use extended distribution because the cost-benefit analysis (for me) yields “no.” I’m sure that, for some people, that analysis yields “yes.” My foray into paper is still in its infancy with only 5 paper books in print. My opinion may change is I get more titles out there, but I doubt it.

        I’m sorry to hear about Ella because I think it might have avoided the problem where you only get 9.4% on all your paper sales. The cost of using extended distribution is more than I currently want to pay to get into bookstores. I have no doubt that something else will come along, though. As you’ve demonstrated, these things change in a heartbeat.

        Thanks for your posts and your wisdom over the last few years. I do appreciate it! I don’t mean to antagonize you on your blog. I’ve been doing travel anesthesia in Tillamook this year, and I think about you and Dean now and then being not far away along the coast. 🙂

        • May 16, 2013    

          You didn’t antagonize me, Abigail. I’m not patting you on the head. I’m telling you that some things are industry standard. Discounters are. Heck, there are bookstores that are discount only, and traditional writers get almost no money from them. You’ll get more through extended distribution with the right pricing if your books go into those discount stores (and they will) than if you are traditionally published.

          Folks, listen. You want people to buy your books. If you aren’t in print, you’re missing 75-80% of the market. Must you raise your prices to standard pricing so that bookstores can carry the books and you can make a profit? Yes. Why wouldn’t you charge a good price for your hard work? Will your books get discounted? Of course they will. But if you sold the books outright to a bookstore with no returns your book would be discounted too. In fact, you would (and did) sell fewer books without returns and at a lower price than you will sell with extended distribution and these discounters.

          Am I telling you to ignore them? No. I’m telling you they’re part of the industry. If you price your books to make a profit–a real profit, not five cents per copy, you’ll still make money on each title even if a discounter grabs the book and doesn’t pay full price for it. Worry about the right little things, not the things that you can’t change.

          What can you change? How you publish your books. Good stories, good covers, good cover blurbs, traditional prices, and distributed to as many places as possible.

          I gotta tell you–and this isn’t just Abigail and Randy, but everyone who tells me they limit their distribution for some reason or another–the only person you hurt is yourself. Your readers will either never find you or they’ll move on to other writers. Why don’t you want to make your books available to all readers??????????????? I truly, truly do not understand this thinking.

      • Chris Chris
        May 16, 2013    

        “Write more, worry less”

        Dang, Rusch. I think this needs to go over my writing computer!

    • walter daniels walter daniels
      May 16, 2013    

      I’m going to add a perspective that KKR can’t. My background is partly advertising, marketing, selling, because I know _less_ than zero about those subjects, in 1996. (I started a business that year, and knew I needed to learn about them.) I may pick up a book at $2.99, because: The title sounds interesting; the cover looks interesting; or, the back blurb sounds interesting. Subsequently, if I like the book, I look for more from that author. IOW, I spend money on books that might not have sold otherwise. How many people _directly_ make money from advertising? D— few, that’s how many.

  42. Vera Soroka Vera Soroka
    May 16, 2013    

    Wow! That was a very interesting post. Thanks for explaining how those catalogues work. I didn’t know that self published books were in a different category than the rest of the books. I’m very happy that has changed. It’s a whole new ball game now.
    I can’t wait to see all the interesting questions and answers.
    Look very much forward to the next post.

  43. Alex Hajicek Alex Hajicek
    May 16, 2013    

    Holy $hit! It just got hot in here. Hahahaha

  44. May 16, 2013    

    How do I get word-of-mouth going on my book so that a bookstore wants to… Oh, right. Okay, waiting with anticipation! 😉

  45. Nancy Beck Nancy Beck
    May 16, 2013    

    OMG, Kris, I am SO excited! This is why I peruse Dean and your blogs. I never would have found out about Kobo’s program with indie bookstores and I certainly wouldn’t have heard about this B&T and Ingrams anywhere else.

    I just finished the draft of the 2nd book in my 2nd series yesterday. Now I’m going to split my time between finishing the editing on the 1st book and finishing the omnibus edition of my first series. I stopped for various reasons, but now with this news, my enthusiasm to get the print edition done now is at full throttle. This will also help me to get print editions of the 2nd series out within a couple of weeks or whatever of the electronic edition instead of waiting longer than that.

    Did I mention how excited I am? Unbelievable what can happen in just a few months. 🙂 Looking forward to that word of mouth post of yours!

  46. Jon Garrett Jon Garrett
    May 16, 2013    

    I was sorry to hear about Ella. It looked like a lot of high quality work went into setting it up if the website was anything to go by.
    I’ve been lurking, waiting for Ella to launch before springing a few newb questions, so hope you don’t mind if I chuck them out now as you’re tackling this topic:
    If I’m an indie writer with a book on Creatspace for say $16 – how does the discounting work when ordered through a distributor offering 45% (or whatever) discount?
    And who picks up the costs for returns?
    Is there a cut-off point where, if you manage to write the next Wool, you should abandon POD and bulk print (assuming you don’t want to sign with one of the big 5 … 4 … 3)?
    BTW – thanks for the blog, there’s a lot of pure gold on here for the business side and you’re now on my favourites list for SF writers too!

    • May 16, 2013    

      Don’t bulk print, Jon. That’s just silly. Why spend money out of pocket when there’s an easier and cheaper way to do it all now?

      Createspace is handling the discount through extended distribution. So you need to price your book properly so that you make money in their distribution system. They have a calculator for that in the extended distribution section. If you price your book too low, you will lose money on every copy and owe Creatspace money. So make sure you use that calculator, and make sure you make a profit. Also, if you price your book too low, bookstores will wonder why and not order it.

      The returns are factored into the extended distribution cost. Createspace holds them and then ships out the books for the next order. You never see a return and you don’t lose money on them.

      I’ll try to answer more questions like this through the series. Thanks for them and the kind words about my work!

      • Michelle Michelle
        May 21, 2013    

        “If you price your book too low, you will lose money on every copy and owe Creatspace money.”

        CreateSpace’s pricing system doesn’t actually allow this. Your price must include a break-even or profit or it will be outright rejected and you cannot proceed with publishing until you adjust your price to be in the black.

        • May 21, 2013    

          Michelle, thanks. We always check on the chart to make sure the book earns at least $2 profit in extended distribution, so we’ve never clicked through when it shows that the book is losing $1. We bump the price until we earn money. So good to know that it won’t let you go all the way through with the loss. (If I were running Createspace, I’d allow people to lose money on each book sold and privately call it a tax on the stupid. This is why they don’t let me run certain parts of our businesses. [VBG])

  47. Ferran Ferran
    May 16, 2013    

    “Think of it like this: writers are like cats. They’re more interested in sniffing the butt of the cat standing in front of them on the freeway of life than they are in the truck barreling down on them at sixty miles per hour.”

    But, I bet, without the survival rate.

    “And bookstores generally do not share information with each other […]”

    In the gym business there’s a specific “scam” (kinda, sorta: sometimes less so, and legal, but rarely good for the gym) where external accountants will do “all that numbers work and promotion, and… for a fee.” In part, like music firms and, now, publishing, but geared towards the small business. Do bookstores have the same problem?

    “Over the last two weeks, I’ve begun to think we’re the only two people in the country who actually see the change on all levels”

    Maybe others have but don’t want to be the shot messenger. Or they’ve burned out. Or…

    “Publishers couldn’t talk to other publishers about changing the returns policy because that would be collusion to impact the market in a favorable way toward publishers. Collusion like that is illegal in the United States.”

    Would it still be illegal if it had been done publicly? Starting at book fair debates, for example. “Distribution system: Are we past the Depression, already?”, room V at 9 am.

    “They order one, and put it face-out on the shelf. When that book sells, they order another which arrives from the distributor within one or two days.”

    Hm… I see a pitfall, there. Unless there’s some kind of “Out of copies. Expected next Tuesday” sign, that books that actually sell [well] will be _less_ visible than the ones that don’t [as much].

    Also, the rhythm on Ella’s life cycle is out of this world. How bad was the red tape?

    “It is now not only possible, but likely that an indie book with good word-of-mouth will sell as well or better than a book with the same word of mouth published by traditional publishers.”

    Suggestion: word of mouth about an indie has an immediacy that NY books lack. But that might be the bookworm in me.

    “I don’t distribute this blog through traditional channels. It’s published here and nowhere else.”

    Nowhere else? Are you _sure_? I think that’s another distribution paradigm that’s, at least, misguiding, right now. I could copy that on a blog in seconds and while your webcounter wouldn’t show it, your words would be travelling further. Or I might paste parts of it to a comment thread somewhere else. Or…

    It’s not as when you had to xerox a news article. Not any longer. And I bet it affects word of mouth, also.

    Take care.

    • walter daniels walter daniels
      May 16, 2013    

      Ferran, I’ve was involved in a business from 1996 to 2001 (I had to close due to an accident that is slowly paralyzing me). The “net has created just a big a “sea change” in advertising and marketing. Now, with a little help, anybody can become known. KKR is right about how things are changing for everybody.
      Think of it as the “Industrial Revolution (and assembly lines) coming to nearly every business, but writing/publishing in particular. Sadly, some are going to get hurt. It’s sad, but it can’t be helped. Some cannot survive in the new world of writing and publishing. Others will prosper, and become famous (or at least make a living).
      KKR, thank you for being a chronicler (scout and historian), and helping others to see what’s happening. I like your books, and now have another reason to buy them.

  48. May 15, 2013    

    Wow. I’m floored by the Ella news, and sorry that I won’t be able to work with your amazing team there on print distribution of my books. Bummer!

    But, this other news has me reeling as well. And my first thought on reading this was – what about the SECOND thing Ella Distribution would have given indie books? Which was, of course, increased visibility.

    There’s still a need for *some* kind of loose curation for indie titles, in my opinion – some kind of catalog or centralized, trusted source that says, “Here – check out these indie titles.”

    I don’t mean a ‘quality’ police, beyond the basics of professional-looking product. All kinds of things sell, and bookstore owners should be able to flip through the catalog and figure out what would appeal to their clientele. But, in addition to the distribution part of Ella, I now realize I was really jazzed about the visibility part.

    How does Ella Catalogation sound to you guys? 😉

    • May 16, 2013    

      It sounds silly, Anthea. First, I just told you that the stigma is gone in the last place it existed, and you’re asking us to do a catalog that puts the stigma back in. And there’s no way to earn off that catalog without charging writers fees. It would be better to have them put advertising dollars into some place that actually keeps the playing field level. Visibility is up to the writer/publisher, just like it has always been. More in the visibility post down the road.

    • May 16, 2013    

      It may just be because I have a very strong background in sales, with family in sales going back generations, but I can actually see an opportunity for a local sales company. Someone who puts together a catalog and then goes around to local indie stores to bring their attention to local authors they may not know about. I used to do just that for one of the largest candy companies in the US with local convenience stores. I mostly sold displays but I was also supposed to convince them to try and carry some of the new items.

      It could work. I’m not sure how I would start it but it could definitely work.

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