With the explosion of print-on-demand, there are more authors than ever before dipping their feet into the self-publishing game. Many authors come from the traditional arena and have a degree of knowledge and understanding commensurate with their experience. Other authors may have independently published books in the past, consider themselves savvy, and are now seeking the advantages that come from joining forces with a full-service print-on-demand self publisher (Ingram distribution and automatic wholesale fulfillment, to name just two).
The great majority, however, are new authors, anxious to learn, but not possessing much history or background in the industry. They often rely upon the information they read on the internet, hear from friends/associates, or receive from their publisher. All too often that information is either incorrect or slanted.
Let’s examine one good example – the confusion that exists around retail returns as it relates to print-on-demand books. There is a commonly-held misconception that all POD books cannot be returned to the wholesaler by retail stores. This harkens back to the early days of POD. Those days are over. The great majority of POD books are all printed by the same printers and distributed in the same manner; and that process does allow for POD books to be returned by the retailer through Ingram Book Wholesalers.
Whether or not the individual POD publisher allows returns is at the discretion of each publisher. Some allow it and some do not. Usually the publishers who allow it do so for an additional fee. Why? Because not all POD authors want their books to be returnable, and because accepting a return on a print-on-demand book is expensive. POD publishers who offer “returnability” for “free” are able to do so by amortizing that additional cost across all their books and authors, even the authors who don’t want that additional, costly service in the first place.
Let’s consider that one of the defining characteristics of “print-on-demand” is that the book is printed only when it is demanded. There are some who believe offering a POD book on a returnable basis defeats the very advantage of POD in the first place. Naturally, the major issue is the printing cost. When an off-set book is printed in quantities of thousands, each book has a printing cost of perhaps a dollar or two. (Of course, that means each book order costs you $4000). By comparison, the very same book printed one-at-a-time via POD digital printing has a printing cost of perhaps $6. A publisher who is willing or able to accept a $1-$2 loss for a returned book might be unable or unwilling to accept a $6 loss. This is basic economics. POD works because books are only printed after there is a need, when there is a buyer. Then everyone wins. But if a POD book is printed “on consignment” when it might not be purchased, that is an expensive risk. Since it is the author’s decision to take on that risk, it is most often the author who is asked to front the cost.
THE LIFE INSURANCE ANALOGY
When a POD publisher offers to sell a book on a returnable basis, there is often a period of time associated with the option, either one year or two in most cases. Why? The best analogy is life insurance. You pay into a life insurance policy every 6 months or every year. You don’t just make one payment. Same philosophy here. In fact, the analogy works on several levels. Life insurance is protecting your family in the event of an unfortunate circumstance, such as a death. Purchasing a retail returns program is similar– you are protecting yourself in the event your book is returned in massive quantities. Similarly, just as the life insurance company is accepting those premiums to have enough money to cover any claim, so too are the POD publishers.
Let’s pretend Barnes & Noble orders 1000 copies of your book. They sell 100 and have 900 copies to return. If each copy costs $5 to print-on-demand, that is $4500 being refunded back to Barnes & Noble’s pocket. This is an over-simplification, because there are additional complexities like wholesale margin and printer profit to account for, but this works for the sake of an example.
It might not be pretty to realize, but from a business perspective, 4500 returned POD books have a value of exactly zero, so the fact that 4500 books are coming back to be dealt with is actually an increased cost to the wholesaler and publisher, not a savings. Reprinting that same book new costs $5 while administratively handling its storage, reassignment, and reshipment might cost $7.
So, who is giving that $4500 back to Barnes & Noble? Not Ingram! The only players left are the publisher and the author. Since the publisher has offered “life insurance” on the book, they pay the $4500 bill rather than asking the author to pay. The author’s “premiums” have covered the publisher against the potential risk. Does this mean that some authors receive a far greater financial benefit than the cost of a returns program? Yes. Does this mean that some authors receive a far lower financial benefit? Yes. Just like insurance. The family with the “death” is subsidized by all the premiums being paid by the living. Of course, between dying and living, I know which I’d prefer. So if my book is not being returned in massive quantities, I’m okay with the fact that I might be subsidizing other authors in this way.
WHEN TO OFFER RETURNS
95% of online e-retailers like Amazon or BarnesAndNoble.com will list your book whether or not your book is returnable. The question of returns only truly arises when the topic turns to off-line, brick-and-mortar stores. So if your marketing plan is to ignore the off-line stores entirely, there is no need to have your book returnable.
On the other hand, if your plan involves contacting brick-and-mortar stores, pitching your book to their buyers, engaging in physical book signings, and having your book either stocked or available for off-line retail ordering, you may want to strongly consider a returns program for your book. Why? Because off-line, brick-and-mortar booksellers are accustomed to being able to return books. This harkens back to the days of the depression when publishers offered this “perk” to bookstores in an effort to encourage them to continue buying books even when bookstores didn’t have any customers. Once acquired, the bookstores refused to relinquish this perk, even when business boomed. Again, this is an oversimplification; but it will suffice as a snapshot of history.
They say you can’t teach an old dog new tricks. This pretty much sums up the situation with off-line, brick-and-mortar bookstores and POD books. Bookstores are the old dog. POD is the new trick. Each started out this millennium not fond of the other. Slowly, the old dog is coming around, out of necessity more than anything else. But most stores are not willing to relinquish their requirement for returnability (unless they really like you and are willing to make an exception – and this happens quite frequently, mostly at the local level). That means, if you want to be in their ballgame, you need to play by their rules. And that means allowing your book to be returned, with the understanding that you are basically paying for insurance when you order a returns program, protecting yourself against the risk of your book being returned in such high quantities that the refund would exceed your ability to pay.
Granted, this is a topic with some complexity, but hopefully this article has helped somewhat.