The online journal, notebook and playground of HFM

Editorial Ass has some good advice for those in the book publishing industry. Since I’m one of those people, and I’m married to one, and most of my friends have something to do with publishing, I’m going to quote quite a bit of this blog post:

Let’s talk a little bit about what happened in October.

You’ve heard about the massive layoffs at Doubleday; you’ve heard about Harper’s terrible state of profit, BNN’s worst quarter and projected year ever, and the closing of Impetus, an indie press (which, as I’ll explain below, I don’t think was Impetus’s fault even vaguely).

Yes, there’s a crisis.

However. Anyone who wants to talk about “the death of publishing” can leave the room. I’m at the beginning of my career and I plan on being an editor for a long time; a lot of you are yet-to-be-published authors and I’m sure you’re equally intent on not seeing book publishing fold (not that it’s going to; that’s ridiculous). So instead I want to talk about what’s actually causing the problem–it might help us come up with solutions for protecting what’s important to us.

I don’t think anyone’s being really straightforward about what exactly happened, and a lot of it is not very complicated.* The crux of the problem is that book publishing is a returnable industry. That means that say Big Chain Store (BCS) agrees to stock a book that my company publishes. They buy 100 copies at, say, $1 a piece (to be easy). They give me $100; I send them the books. Two months later, they didn’t sell any, so they send them back. I have to give them $100.

Keep in mind a couple of things about this system that don’t work in the publisher’s favor:

1) Shipping costs. Books are heavy.
2) Production fees incurred by the publisher (because, unfortunately, we can’t return the books to the printer).
3) Inflation. Haha.

Why do publishing companies put up with this? Yeah, it’s stupid. But it’s an industry standard, and if we don’t let BCS have the option to return books, they simply tell us they won’t stock them. They can carry CDs and calendars and greeting cards, instead.

All right, but this has been the case for awhile. So what went wrong in October?

As you MIGHT have heard by now, we’re having some kind of economic hardship (or something like that). So people spent less cash in September and October. So bookstores sold fewer copies in those two months, and were hit hard like all the other businesses in the country and in a lot of the world.

However, BCS and all its chain compatriots are counting on Christmas sales to save them. They need to stock up! They need to plump their stores with new enticing merchandise so they can convince customers to save them from foreclosure!

Where to get the cash for all the holiday books they needed to stock in October and November? Three. Guesses.
In October, bookstores returned so many books that most publishing companies had more coming into them than going out of them. For some companies, the incoming number was more than several months’ outgoing.

Although bookstores are suffering (and how), it was the publishing houses that had to absorb the cost of this cash flow creator. This is why Impetus, a relatively new indie company without the history to survive this shock, folded. Some houses lost so much money in returns in October that profits from the entire rest of 2008 have been negated. Can you imagine? Losing enough in a month to destroy your entire year? (Keep in mind that publishing is a very low profit margin enterprise in the first place; now see how if one month involves more outgoing than incoming money you can easily undo the good of an entire year or more.)

Now you can see the ripples that are happening, the layoffs, the dwindling advances, the precautions about acquiring anything in this climate. If publishing companies are shelling out money to publish books that bookstores only bother to stock for a minute and a half, we are all going to hemorrhage money until there is nothing left standing.

This would be a bad situation for more than the sake of my job or your future novel. It’s about a lot of things–education, hampered information dissemination, conglomerations swallowing mass media, censorship. Whatever. I could extenuate, but I’ll spare you. The point is, when you have a problem, the best thing to do is try to solve it.

For anyone who cares about the book publishing industry and wants to do their part, there’s one simple action step:

Buy a book this weekend.
Just buy one.