The Business of Publishing: The Distribution Question (with Infographic!)

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This is the second post in a series on the business side of publishing by Joe Biel, the founder and owner of Microcosm Publishing and author of A People’s Guide to Publishing.

Visualization of the amount of sales needed to justify each type of book distribution. (Image created by Joe Biel) (Click image to enlarge or download PDF)

In the previous post in this series, I discussed the economies of various publishing formats—eBooks, print-on-demand, and traditional format offset printing—and the reasons that new technologies and author services make less economic sense than their marketing materials might suggest.
This time I’m going to take these same concepts a step further and look at various kinds of distribution models as well as how the economies of each pencil out in real numbers.

Once you’ve printed your book, in whatever format you’ve chosen, you need to sell it. And to sell it, readers need to be able to find it. One way that readers find books is in bookstores and at major book retailers on the Internet. Because of the way new technologies have flooded the number of books in print to the highest levels we’ve ever seen, it can be difficult to get your book into many places without going through a trade distributor.

A trade distributor is a partner company who takes over the tasks and responsibilities of selling your books to trade accounts like bookstores and wholesalers. Because of their size and scope, trade distributors often have better leveraging power to sell books, get good placement for the books they represent, and last but not least, get paid for books that have been sold.

The myth of distribution

I cannot tell you how many new publishers have expressed to me that gaining access to trade distribution would be the holy grail of their publishing quest. But like all things that we think we want, it is not exactly what many have built it to be.

Because of competition from new distribution models like those pioneered by LightningSource and Amazon, it is becoming easier than ever to fulfill this quest and sign a traditional trade distribution deal. The perception of many new and would-be publishers is that this is great, that having a trade distributor allows you to cease focusing your efforts on selling and marketing so that you can settle in to work on the artistic aspects of publishing: editorial, design, and even writing.

But having a trade distributor isn’t quite that simple. It’s more like having a new partner that you work with to reach new places, rather than a new person to do part of your work for you. The things that are profitable for your distributor are not necessarily in your best interest. Signing with a trade distributor means you are changing your distribution model, and it’s not necessarily a better one than staying small.

Readers want books. You make books. It’s tempting to assume that once your books are widely available, readers will organically discover them. It makes sense in your mind and it harkens back to those emotional moments of our own childhood when we discovered our favorite books by simply browsing our favorite subject or section at our favorite bookstore. For many, this is the dream that trade distribution (or its cousins at Amazon and LightningSource) represents: That the existence and intrinsic value of your work will attract readers.

Distribution is not a substitute for building an audience

We’ve exceeded the saturation point. Again, there are more books being published now than at any point in history, at the same time as people are finding less time to read. This makes it far more complicated and competitive to get people’s attention. Except in a very few rare cases, your readers will not find you unless you actively reach out to engage them.

As a publisher, you need to build an audience. Before you do anything else, you need to find this audience. Who is your book for? How do you reach them? Where do they hang out? What else are they reading? What conventions do they go to? What other titles are competing for their attention? It’s ideal to answer these questions before writing a book.

To reach an audience, you need to be clever—more clever than the other people who are doing what you do. You need to have a really clear title and subtitle and packaging (such as your cover) that spell out exactly what the book is—people miss that one the most. (I do too, and have spent a lot of time revisiting such basics.) You need to have an online presence that appeals to your reader base, you need to work hard to promote your book through traditional media as well as more creative channels, and you need to find ways to interact with your readers and keep them invested in your output and success.

You don’t need a trade distributor to do any of these things—good ones that are a good match for your work will do them, but not as well as you can and not in a way that replaces your own efforts. A trade distributor can expand your reach, but if you haven’t yet built up a way to connect with your audience, that expanded reach may not stick or be sustainable.

In fact, working with a trade distributor is a risk. There are many other publishers competing for the same shelf space; meanwhile that space is shrinking. A trade distributor takes a much bigger cut than retailers or wholesalers—you normally only get paid 40% of your book’s cover price or less on the books that do sell through—and there are many little costs and fees that can add up quickly. What’s more, your distributor may sell 500 copies of your new book in advance—which is a great number—only to see 475 of them returned eleven months later and charge your account with extra processing fees that might add up to more than the revenue on the 25 books that sold through. It’s easy to quickly get in over your head and even end up owing them money. The best way to make this relationship successful for you is to already have built a growing audience that is eager to get its hands on your books at all kinds of outlets.

Did I hear someone suggest virtual shelf space or publishing through CreateSpace? That market is even more crowded and less curated. How do people find those books? The same way as they find any books: Because the publisher connects audiences to them.

When to consider working with a trade distributor

If you are going to go through all of the trouble to make a great book and find an audience for it, you owe it to yourself to understand the mathematics of what you are doing. Take a look at the chart above (or download it as a PDF). It outlines how many copies of your book you’d need to sell each month using different publishing and distribution models to pay yourself minimum wage. Some of the results surprised me a little, but overall I think it makes the best case for starting out by setting up a website and doing your own mail order of your book.

There are dozens of reasons for this. Once you’ve built up an audience, they want to interact with you. They want signed books and little bonuses and lovingly handwritten letters and postcards and a relationship. And then you can meet them at events and learn about their lives and what attracts them to your work and probably relate to them as human beings. Maybe they’ll become your next author; they’ll almost certainly share their feelings about your work with their friends. Along the way you’ll also find some stores that like the cut of your jib and want to put your books outfacing on their prime real estate, and your friends will tell you how excited they were to see your book at such and such place and how proud of you they are. And that’s great.

But as you do this work, you’ll slowly start to see the limitations of only doing direct sales on your website or at events. It’s hard to sell even 100 copies of a book in a month, let alone every month. Eventually, you’ll have enough titles that carting them around to stores and events is a hassle. Stores will give you the runaround of why they can’t stock your book because of such and such ordering policy.

Once you’ve reached this point, and not before, is a great time to begin shopping trade distributors. If you need a metric to aim for, then you should have at least five books in print, and at least one of them should have sold more than 5,000 copies. You have an audience who will buy your work and is hungry for more.

The two greatest functions of a distributor are helping you with title development—they are experts in making it easy to understand what a book offers—and getting you into all of the places that would love to have your books but just “can’t” purchase directly from you. You’ll still be able to sell your books directly to readers and to some sorts of stores (depending on what is in your contract), but your distributor will take over sales to bookstores and large accounts.

Shopping for a distributor is like seeking any other kind of relationship, business or personal. You want to shop around and go with the one that seems to really get you and your books the most. You also will want to negotiate your terms, and continue to work on improving the relationship so that you can both succeed. It is vital to stress that it works best when it’s symbiotic and you working together.

Keep in mind that any terms you are offered will seem harsh at first, especially if you are used to doing all your sales directly, and even more so if you are no longer able to sell to many of the stores you have built relationships with and are now paid less for the same books. But this is part of the math of this relationship. It’s also important to remember that the staff at your distributor are doing work that you either can’t or don’t want to do yourself. The work is often not nearly as glamorous as the artistic side and involves a lot of paperwork and rejection.

So please, appreciate trade distributors for what they do and don’t approach them until you are ready and can’t move forward on your own.

Someday maybe you’ll outgrow your first trade distributor and collaborate with someone else. Or maybe you’ll find that you preferred (or have a better bottom line) being smaller and getting more personal mail and doing fulfillment for some stores selectively.

No matter what, the bottom line is that your job as a publisher is first and foremost connecting readers to reading—not books to a marketplace.

This has been a guest post by Joe Biel of Microcosm Publishing. This article is one in a series about the Business of Publishing.