At last Friday’s London Author fair, I chaired a panel intended to provide authors with information about book distribution. My four highly experienced panelists were Anna Lewis founder of self-publishing platform Completely Novel, Camille Mofidi from Kobo Writing Life, Ruth Jones from Ingram Content Group (talking about Ingram Spark) and Darren Hardy from Amazon. Information about all of their offerings to authors can be obtained by following the embedded links in this paragraph.
Meantime my role was to preface the panel by providing some context about how book distribution has traditionally been set-up, and for any author wanting to know more about that – here’s an expanded version of my opening remarks.
Any conversation about distribution is a conversation about the real economic nuts and bolts of publishing. You can write and create the most wonderful works of art in the world – but if those works of art can’t be brought to market profitably and cost-effectively there is a problem. For centuries the physical print book was the most economically viable way to solve this problem. With new technology that is all changing.
If I had to come up with a definition of “distribution” for the purposes of this discussion it would be “the ability to get a product or service to market cost-effectively and profitably”. (Ruth Jones later picked up on this definition and in her characteristic super-smart way offered a different, one-word, definition: Distribution = Availability).
There is a lot of discussion going on in both the author community and the publishing community about what value publishers add. In the old print-book world, distribution was a major component of the publishing value add (or as Holly Bennion from Wiley put it so succinctly earlier in the day: “We [publishers] add scale, we polish your work and we amplify your platform”.
Because publishers have been so opaque for so long about the nuts and bolts of the supply chain, it is highly unlikely that most authors know that over the past three decades the supply chain for print books has been the place publishers have gone to look for the cost savings they have needed in order to keep their businesses going through a succession of recessions. At the same time, the information technology costs of running an effective distribution operation have escalated. Effective logistics are underpinned by massive database systems, GPS tracking and excellent product data. None of these can be implemented without big up-front investments.
There’s an adage that in traditional economic terms Google is a marketing business, Amazon is a logistics business and Facebook is an advertising business. It is probably worth adding to this that for centuries publishing thought it was a content or IP-based industry, whereas the developments of the past couple of decades have shown us that publishing was also a distribution business. What publishing offered was a way to permit authors to focus on being authors whilst publishers focused on the business, print and distribution of the books. However the lack of publishing’s self-conceit as anything other than a content business led to a woeful under-investment in logistics and understanding consumer behaviour at exactly the moment in history that Amazon was investing significantly in both. Add into that the technological disruption of digital, and here we are… It is arguable that the supply chain for print and digital books is the practical economic crucible of the changes happening in publishing right now.
Going back to traditional publishing. For a publisher from one of the big publishing houses, their business will have “in house distribution”. In this instance distribution includes
- Warehousing books
- Pick pack and dispatch of books
- Customer Services
- Order processing
- Invoicing (for print book and eBook resellers)
- Credit control
So to a publisher, distribution does not just mean physically transporting books from A to B, it actually covers all of the transactions involved in monetising content. This is where the money is invoiced, collected and accounted for. To unpick this further, it is worth mentioning that “customer service” is not what you and I might think of as customer service – in that very few individual consumers ever ring into or order directly from book distributors. The “customers” served by these massive distribution warehouses are in fact other supply chain intermediaries: book wholesalers, book retailers (bricks & mortar and online), library suppliers and book shops. Traditional book distribution is a B2B not a B2C activity.
Most of the mainstream “trade” (or consumer) publishers do an eye-wateringly low proportion of direct-to-consumer business, and because their distribution centres are designed around serving the needs of “big” customers and “large orders” they find the economics of single copy direct-to-consumer authors tough to absorb. One important reason why a lot of publishers don’t have effective e-commerce web sites is because the people running their distribution centres and back-offices hate one-off orders. Publishing IT systems are not designed around building consumer databases. (Note: This is less so in academic publishing where higher price points make one-off dispatches cost-effective, and publishers are far more likely to have a detailed understanding of who and where their customers are).
Smaller publishers no longer have their own warehouses. It’s just not economically viable. Instead they sub-contract most or all of the activities involved in “distribution” to either one of the other big publishing companies – or to an independent distributor – of which there are a diminishing number in the UK. The potential drawbacks for a smaller publisher going to one of the big publishers include:
- having your entire outward facing customer relationship management in the hands of a much larger competitor
- you are a small and relatively powerless client of the Distribution Centre. Getting any attention for an out-of-the ordinary request is next to impossible
- This logistical strait-jacket stifles the publisher’s ability to experiment.
Overall demand for warehouse space is falling both because e-Books are taking over from print books in some mass-market genres and because changing print technology means much shorter print runs and smaller stock holdings. This adds another economic pressure in to the publishing industry. There is fierce competition for distribution business, driving prices down and making book distribution an increasingly marginal business (economically). Distribution prices going down whilst IT and other infrastructural investment costs are going up is a car crash in slow motion.
There are many variations and flavours of distribution – particularly used by the independent niche-publishing sector. Now is not the time or place to explore those, save to say the more specialist and narrowly niche your content is (particularly if it is non-fiction) the more likely your publisher is to have some kind of direct relationship with the end consumer.
There’s probably a (self-published) book to be made out of a logistics overview of our industry, so it’s time to draw this snapshot to a close. Here are the key points authors would do well to understand:
- Distribution is a volume business, in which excellent product data is paramount.
- This means that when it comes to distribution things get de-personalized. What is being sold may be a work of art it has taken you months or years to gestate and bring to fruition. In supply chain terms though, it is a stock keeping unit.
- Managing the supply chain is a time-intensive and a costly process. Any author self-publishing needs to evaluate the time-costs involved.
- In the book industry, distribution has often been under-invested in, and when it has been invested in – the money has not always been wisely spent. (For corroboration of that you need look no further than James Daunt’s recent comments to the IPG conference).
- For the traditional book industry “customer” does not mean “consumer” and mainstream publishers face real problems in reconfiguring legacy systems to cope with a new more directly interactive world.
I’ll be writing more on this and related themes in the coming days and weeks. Feedback always welcome.