Book publishing 101: the distribution myth

We recently lost some business to another fee-for-service publisher because they offered a distribution solution (at the time we didn’t) and the author found this appealing. But is distribution really that important?

Firstly, what is a distribution deal really about? Obviously it’s about getting books into the hands of consumers via an intermediary, but I want to focus here on the deal mechanics. Particularly I want to look at traditional distribution vis-à-vis consignment deals.

In most instances books are sold to retailers on a sale or return basis. This means that if a title is not purchased by a consumer the retailer can return the title to the publisher for a refund. But, and it is a big but, the retailer does buy the stock (usually on account) and so the publisher does generate cash flow from the ‘sale’ of books to retailers.

A problem with this deal structure however is that the publisher must credit the retailer account when books are returned (and it’s when and not if). So, cash flow is good but you’ve got to keep enough cash in the bank to refund the returns.

Under a consignment deal a publisher (or more likely an author) ships the books to retailers on a sale or return basis (as above), but the retailer does not pay for the books and the author therefore doesn’t generate cash until books are actually purchased by customers. Many retailers like this deal structure as they get to retain cash in exchange for offering the author shelf space.

There are obvious pros and cons in both deal structures, so which one is best? Actually, they’re both the same in the end! Either the book is purchased by a consumer or it’s not.

That said, anyone can distribute a book on consignment and I question whether securing distribution is as important as some obviously believe.

But having books in retail is great right, I mean, if they’re not in retail they can’t be sold? Aside from that supposition being patently false, distribution is nought but a channel to market and what matters most is marketing. So having distribution is great but it’s meaningless without marketing support.

We offer our authors a lot of marketing support and I’ll blog about marketing in the next few days.