Picking the Right Fights

In an excellent post yesterday, publisher Jonathan Harris used recent developments at Quercus and Waterstones to highlight the role stock management plays in the fortunes of retailers and publishers alike. It’s a post that struck me as relevant to the distribution discussion I’m chairing at the London Author Fair later this month, because stock and warehousing are first cousins of distribution and a major cost-component of the publishing back-office. I’m not sure how transparent these costs and inter-relations are to authors.

Jonathan is correct to highlight how poor publishing has traditionally been at inventory management, and how slow it has been to adapt to changing buying behaviour (speaking of first cousins, the way we need to change buying cycles is a subject Rebecca Smart makes an eloquent argument for – and that’s also a component of this problem).

…First, Waterstones’ improving health is in part due to its more rigorous stock management. Here’s the reality in the “conservative ordering policies” of the Quercus press release: no more print-run defining opening orders, with built-in returns percentages, but careful buying. “The buying team have got better and they continue to get better,” says Daunt.

Jonathan Harris’s IPG colleague Richard Balkwill focusses heavily on the issue of print run management in his regular finance for independent publishers sessions run in association with the IPG, and with good reason. I’d recommend it for anyone who feels they need to better understand the overall effects stock decisions have on the health of their business….

The conversation about what’s up with our industry focusses a great deal about content and marketing. Jonathan points out is that what matters in business more than ever is cash-management. Here’s how Jonathan ends his piece.

Customers and cash: we don’t have a business without them. The tales of woe in recent years for Waterstones, and in recent months for Quercus, serve to remind us of that simple, yet difficult, truth.

I could not agree more. To serve bookshops effectively, we still need to carry inventory, and that’s an up front cost. Lean stock holdings by retailers mean it is more important than ever that stock is ready to ship at the moment of order (and if books could not get held up on a retailer’s Hub on the way, it would help). We need to manage cash, but we need to move stock fast in response to demand. Unless publishers and bricks & mortar retailers can work better together to solve stock management issues, the only logical extrapolation is complete dominance for Amazon and their in-house print on demand. I am not in the anti-Amazon camp. My own “nuanced” approach is to be concerned about their impact, but to make use of their services. But there are countless reasons why want and need more than just that one option. Stock has got to stop being a fight between publishers and retailers. If not we’ll all be corpses on the battlefield.

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