Monday, January 04, 2010

Guest Blog Post: Distributor vs. Wholesaler--Getting Your Book on the Shelf

Happy New Year, everyone!

To kick things off for 2010, we have a great guest blog post from multi-published author Cathy Clamp.

The distinction between a wholesaler and a distributor is an important one, especially for writers who want to get their books onto physical bookstore shelves. Too often, however, writers and startup publishers aren't aware of the difference, and don't realize that a wholesaler like Ingram is only half the distribution picture. Below, Cathy describes what distributors and wholesalers do, and the implications of each for writers (and publishers).

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On nearly every thread in all the rooms of nearly every writer site I visit, the issue of the difference between Distributors and Wholesalers comes up. It seems to me like it's time to discuss the distinction when it comes to getting your books on the shelf.

And I mean all books, because ultimately, it doesn't matter whether your book is self-published, or with a major New York publisher, a small indie press, or even PublishAmerica. It's all the same at this level of the game.

Let's start with major NY publishers. They have a sales force. The sales department is charged with doing nothing but selling books for the publisher. Sales reps meet regularly with the buyers for the major chains and secondary markets. You might have one salesperson who handles Borders and B&N, another who meets with Target and WalMart, a third who handles Booksamillion and Costco, etc. They take the books of the publisher directly to the buyers who handle them.

Every book needs a salesperson to get it into the store. Yes, book buyers are looking for new books--but there is only so much space in each bookstore. So they have to be selective.

But even if every book needs, and deserves, a salesperson--let's face it, a small press or self-publisher often can't afford to have a full time salesperson, much less a sales "force," to go out to meet with every book buyer for every chain. Too, it's unlikely (if not impossible) that the buyer would be willing to meet with every single small press out there. There are just too many of them.

So, a lot of small publishers hire "Distributors." A distributor takes the place of a sales force by doing the exact same thing a dedicated, salaried salesperson would do. And for the same reason. They're salaried.

Distributors cost money. A lot of money. Plan on about a third of your retail price to pay the distributor. It's a monthly/quarterly contract for the privilege of putting your books in front of the market, selling them to the buyers at the stores and increasing orders for the books. Is it worth the money? Hard to say. If you're an indie press with thirty niche books that might struggle to interest a bookstore without a marketing pitch, then sure. Absolutely. But for a single, stand-alone novel? Doubtful. In fact, it's doubtful a distributor would have a self-pubbed author or small press. It has to be worth the distributor's while, too. Generally speaking, if a press has fewer than ten titles, a distributor won't accept it as a client.

Now, if a publisher (again, whether small press or self-pub) chooses not to spend the money for a distributor, they go with the wholesalers. To make the difference simple, look at it like this:

- A distributor is the equivalent of a pack-n-ship store.
- A wholesaler is the equivalent of your local postal office.

What's the difference?

Well, if you walk in the door of a pack-n-ship store with a glass lamp to send somewhere, you hand them the lamp and they bubble wrap it, put it in a box, fill the box with those styrofoam peanuts or the equivalent, tape it up, calculate the shipping cost, print out the label, put the label on the box and place it with the other boxes for delivery. They will also accept the box back if anything goes wrong in shipping, and many of them will arrange to file your claim if the box is damaged.

The postal office? Will they wrap it? No. Put it in the box? No. Fill the box? No. Print out the label? No. Tape it? Maybe, depending on the office. Calculate the shipping cost? Sure. Put it with the other boxes? Sure.

In other words--a distributor is a "full-service" shipping company. You can pay them to sell the book, take the orders, fill the orders, handle the returns, manage any disputes with the bookstores, etc. They're proactive--taking on the role of the salesperson as though they were a paid employee.

A wholesaler is the post office. They'll keep the book on their list and send it out if it's ordered. They're reactive--taking on no role other than as a pass-through.

Now, one of the tricky things in this industry is that one of the major players, Ingram, is both a distributor and wholesaler. They have separate arms to handle each. But, per the descriptions above, there's a vast difference on what they do if you pay them to be your distributor, versus merely having a listing with them in their wholesale catalog.

Unfortunately, a lot of small presses and POD self-publishing companies try to make you believe they have the distributor relationship when, in fact, they have the wholesale relationship. Since Ingram won't reveal its client list, it's hard to know which is which. However, I believe that right now, Ingram requires that a publisher that's a distribution client must have about $20K+ of income from Ingram in order to qualify. If you think logically, would even PublishAmerica, the powerhouse of POD presses, qualify? Probably not. PA has the titles, but not the sales. PA, and hundreds of other POD-based presses with far fewer titles than PA, would never be accepted as a distribution client. Simply wouldn't happen. They are with the wholesale arm--i.e., they're listed in the Ingram catalog.

But what does that actually mean? Have you ever seen a Columbia House catalog in the mail? It's pages and pages long with titles of movies, and they rotate the titles by season or when a major star has a new movie out. Now, imagine the Columbia House list if they only listed the titles of the movies--with no description of the movie. You might have heard of some, but what about the others? How would you know which to order? Word of mouth? Sure. That always works. Or someone in your family specifically requesting it by name.

That's what the Ingram catalog is. Hundreds and hundreds of pages of titles with ISBN/ISBN-13, author and that's about it. Is it impossible for your book to get onto a shelf that way? No. It's not like winning the mega-lottery--it's closer to winning a small prize in the Pick-Three lottery game, or a prize on a scratch ticket. It happens. But it's not the same as if you had someone going from door to door, talking your book up and pressuring stores to stock and sell it.

Here's a couple of good links to help you understand the process. Read them. Learn them. If you plan to go with a small press or a POD self-publishing company, you'll need to know both the terminology and your path forward.

Understanding the Book Distribution Channels, by Jacqueline C. Simonds

An Analysis and Comparison of Book Distribution Agreements, by Ivan Hoffman

Should You Deal With a Book Distributor or Wholesaler? by Hal Licino

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Cathy Clamp is half of the USA Today bestselling author team of C.T. Adams and Cathy Clamp. They are winners of the 2008 Career Achievement Award in paranormal romance by RT BOOKreviews Magazine and are moving to the urban fantasy shelves as Cat Adams in June with Blood Song, the first in The Blood Singer series. Cathy has long supported SFWA's goals of protecting aspiring and published writers, and is a member of the Grievance Committee's Special Hasbro Task Force.

Cathy's/C.T.'s current releases and sample chapters of all of their books and anthologies are available at www.catadams.net

21 comments:

Tamara Hart Heiner said...

this is great information. What I want to know is, how does the author get involved? For example, I'm getting published with a small press, and I'm fairly certain they have no distributor. What can I do to either change that or act as my own distributor?

CatAdams said...

That's the tricky part, of course! Authors really hold no sway over the distribution process. But with our small press book what we did was become active with independent bookstore owners and managers of chains around us. It's actually possible that your small press has access to one of the smaller distributors such as Publishers Group West or Book Clearinghouse. There's a pretty good list of the small distributors here: http://www.bookmarket.com/distributors.htm

It's worthwhile to you to find out from your editor whether or not your publisher has access to any of these. Then you can confidently tell bookstores which it's available through. Especially independent stores have multiple options if they know where to go. :)

Congrats and Good luck with the book!

CatAdams said...

You should also check to see whether your local stores are reverse-tied to a distributor! Distributors often double-dip, working both ways: They sign a "placement" contract with publishers and a "order-from" contract with bookstores. Sometimes a bookstore can ONLY buy books through a particular distributor, so if your publisher isn't affiliated, the store won't stock you.

Even if you can't convince your publisher to work with the distributor, at least then you can direct your readers to particular chains or stores that can order your books. A reader who searches for a book locally and can't get it isn't likely to travel far to find it (and might not ever return to your site!)

Tamara Hart Heiner said...

thanks for that link! I'll take a look at it!

This makes me nervous...to have a book published but people not be able to order it? Yikes.

Linda Wisdom said...

Great post, Cat!

Now being with an indie press I'm learning a great deal about this side of the business. My publisher and editor gave a great talk about it at RWA in SF.

Writers do need to learn the difference.

Linda

Victoria Strauss said...

Be aware also that many small presses (whether through inexperience or an active desire to mislead authors) will confidently tell you they have distribution, or that they work with a distributor, when in fact all they have is a wholesale relationship with Ingram and/or Baker & Taylor. Many people simply don't know the difference between a wholesaler and a distributor, and will in fact sometimes insist, even in the face of evidence to the contrary, that there is no difference.

Rather than asking a publisher "Do you work with a distributor?" or "Do you have distribution?" it might be better to ask "Which companies distribute your books?" You can then Google the names of the companies, and find out more about them.

Jane Smith said...

Cathy and Victoria--what a brilliantly useful article! I've retweeted it, and I'm going to link to it to make sure that as many writers as possible get to read it, and understand the importance of proper distribution.

Thank you!

CatAdams said...

Thanks, Jane! The more people who learn about this, the better. :)

Kaz Augustin said...

Fantastic post, Cathy! Thanks so much for the intel. And for all the informative comments. I didn't realise how much I didn't know until I started reading this post. Happy New Year and many successes to all!

jongibbs said...

An interesting (and enlightening) post. I've added this to my 'picks of the week'.

Thanks for sharing :)

Frances Grimble said...

Book distributors are often criticized by micropublishers for minimal sales efforts. The publisher has to do most of the marketing anyway, and usually enlists the authors as much as possible too. Meanwhile, the distributor gets a much heftier percentage of the book sales than a wholesaler does.

We only use Ingram (a wholesaler). We have never used a distributor, or found it necessary to have a physical sales rep. We postally mail a marketing package to retailers instead. It works. To save costs, some micropublishers group together with a few other micropublishers for bookstore and library mailings.

The work of filling orders is not inordinate. Every Saturday, we just process the orders, pack up the books, and drive them three blocks to the local UPS "store."

The free Yahoo Self-Publishing group often discusses issues of distribution, marketing, and publicity, and provides information of use to authors as well as publishers. The URL is:

http://finance.groups.yahoo.com/group/Self-Publishing/?yguid=83348539

Frances Grimble said...

I will add, that yes, distributors will accept books from one-book publishers. Serving micropublishers is mostly what distributors are for. The other thing they are largely for is indirect access to Ingram. Some kind of access to Ingram is almost essential for every publisher. Some micropublishers use Ingram's POD printer Lightning Source, which gives automatic access to Ingram.

Any publisher who does not use Lightning Source and has 10 or more titles, even if some are titles distributed for other micropublishers, can get into Ingram. Some publishers with fewer titles have done it. Most micropublishers are happy to abandon their distributors as soon as they get direct access to Ingram.

Distributors require as much as an 80% discount off cover price plus extra fees for warehousing and the like, while Ingram requires only a 55% discount and a one-time $50/title fee for listing each new book. Distributors sometimes pressure publishers to lower cover prices after publication, when it is too late to lower production costs. Many micropublishers feel the marketing services distributors provide simply do not justify the discounts they require, especially since they usually tell publishers the publishers have to go out and market anyway. Finally, even before the current recession, distributors have tended to be fragile businesses. A number have gone belly-up during the last few years, leaving publishers with lots of unpaid invoices and sometimes, with all the publishers' warehoused books sold for the general benefit of other creditors.

CatAdams said...

You raise a good point, Frances. Independent publisher groups are a godsend to many small publishers. Membership can provide training, mentoring and promotional opportunities to a small publisher that would be difficult for someone trying to go it alone.

While I agree that distributors were invented to help small publishers, I think it might be going too far to say they really welcome self-published authors with only one or two books looking to place them on bookstore shelves. That's more what I was speaking to than a start-up publisher. The problem is that when authors think of themselves as "self-published" that's not exactly true unless the author really IS the one identified by the ISBN as the publisher.

Distributors are looking for actual publishers, not authors, so someone putting out a book with Lulu.com, PublishAmerica or CreateSpace aren't in the same category of a person doing a start-up publisher like Running Press or Poisoned Pen when they started. Of course, if there are ARE some distributors beginning to specialize in those types of authors, I'd love to know about it to provide the best information.

It's most definitely worthwhile for small publishers to seek out the independent publisher association in their city or state. The value of that resource is well worth the yearly dues.

Thanks for the reminder about this!

Victoria Strauss said...

There's also a major difference in quality and service between the bigger distributors--such as Consortium or IPG, which are very selective about the publishers they accept, and are unlikely to take on a micropress or a publisher that doesn't have a varied backlist--and the several distributors that specialize in micropresses, such as AtlasBooks. The latter have a much lower bar to acceptance, but also provide much less in the way of sales support.

behlerblog said...

In fact, it's doubtful a distributor would have a self-pubbed author or small press. It has to be worth the distributor's while, too. Generally speaking, if a press has fewer than ten titles, a distributor won't accept it as a client.

Great article, and very informative to how distribution works for the big guys and us small fries. However, I know that IPG, Consortium, Midpoint, Ingram Publisher Services, and Partners Publishers Group all have signed small presses and even the odd- self pubbed author. These are folks who have money and excellent platforms.

Frances Grimble said...

IPG carries many micropress and self-published titles. The micropress/self-publishers' organization Independent Book Publishers Association:

http://www.pma-online.org/

has various programs for submitting books to various large distributors, wholesalers, bookstore chains, etc. The programs are not all active at once, but usually one or two are active at any given time. IPG was one of those distributors for some years, and maybe still is.

I have never participated in any of these programs (I'm not an IBPA member). But I think the advantage over direct submission is supposed to be, if the distributor reviews a book submitted through the IBPA program but they do not accept it, they give good feedback on why it was not accepted. If it's something that can be changed, they accept it after the change.

Some of the micropress distributors who have gone under, such as Bookpeople, were quite reputable. It's just that both publishers and bookstores often see distributors as unnecessary.

Quality Books is a good library-only (and nonfiction-only) distributor who specializes in micropress titles and does make real sales efforts. They've carried all but one of our books. They do honest business and pay on time. (By contrast, Baker & Taylor, the second largest wholesaler in the industry after Ingram, pays like a glacier and is incredibly inefficient.)

Distributors and wholesalers are getting some stiff competition for library sales from Amazon. Amazon offers libraries their normal large selection, deep discounts, and free, usually fast shipping; plus libraries can open credit accounts. Amazon's terms are often more attractive to libraries than those of wholesalers, distributors, and jobbers, at least for some orders.

The micropress "revolution" is over-hyped, there's plenty of dreck published, and there are certainly disreputable vanity presses. However, the days when all self-published and micropress books were stuff that was rejected by every publisher on the planet are gone. It's certainly possible to get into major wholesalers. We've been in Ingram since the first book, and were in B & T for years, but they became too much of a hassle to deal with. Barnes & Noble carried our first book, though none since.

Star said...

Wish I would've found this site before I went the POD path. My self published book is finally about to be published. What I have learned more than anything is that I am responsible for marketing and promoting my book. The POD didn't tell me the relevance of getting pre-publication reviews and a ton of other stuff. This article only re-confirmed what I suspected...you must do your research.

Megan said...

Bookmasters (Atlas books) takes individual titles, and from indie authors. Pay the set-up fee ($400+), $65 for the title, and then the cost of printing and/or storing. They distribute to chains and online stores.

So, you know, if you win the lottery and want to spend the cash...

Buy Books said...

I am not in the book writing business and I am fascinated by the book publishing world as covered in this article. If authors are responsible for marketing and promotion of their book anyway, isn't it better to bypass the middleman altogether and sell online through own website as well as online POD/self-publishing companies? In general terms, capitalize on the disintermediation offered by the Internet and rely on aggregation sites.

Anonymous said...

I used a great book distributor check them out http://www.writersoutpublishing.com/book-distribution/ I know there are others that are good too like lulu.

Aurana Books said...

Thanks for taking the time to discuss this, I really feel strongly about it and love learning more on this topic. If possible, as you achieve experience, would you thoughts updating your blog with additional information? This can be very helpful for me.