Maybe Caleb Mason didn’t chose this headline for his piece in Book Business Magazine, but it sort of misrepresents the story which is really about publishing books as e-books and as print-on-demand physical books. I’ve referenced Mr Mason before (see This is not why I believe in POD). It’s great that his company Publerati is doing well. One imagines his authors must be happy — 80% royalty on e-books and 50% on print is certainly generous by general industry standards.

I don’t think his technique of supplying books in e-book or POD format has anything to do with scale except insofar as it’s mostly smaller companies that are acting in this way today. But if Publerati were to publish 1,000 titles a year rather than the modest number they do, they’d still find doing things in the way they are doing them now to be advantageous. To my mind just about the only reason today to have a warehouse and fill it with books is that you already have one and it would be a nightmare (in terms of employee relations, organizational turmoil, and costs) to close it down. So you just muddle on.

As Mr Mason points out, the success of a big trade publishing company depends on a tiny fraction of the books it publishes. If 90% of your profits come from 5% of your books it’s the costs associated with the other 95% of titles which are holding you back. Of course, however much we might like to think it possible, we can never preselect that 5% of titles which will become bestsellers*. One or two you might expect to get right, but too many intangibles go into making a bestseller for anyone to be able to pick only books which will fly high. Publishers tend to throw lots of stuff at the wall and see what small proportion of it sticks. Most trade books either do modestly or fail. If you never invested a penny in inventory of these books you’d have saved a huge mountain of cash. Sure, your unit cost of production would be higher, but what does it matter if the unit cost of a book you never sell is $2.00 or $20.00 — you never sold it, so $2.00 (which you did spend, along with lots of other $2 for other copies which never sold) is a lot more expensive than the $20.00 which you never spent. Unfortunately you can’t go into it saying “Although we all hope this book is going to sell 100,000 we are going to behave as if it will only sell 1,000, which means we’ll only print 500, and in that way we’ll be real clever”. If you print 500 you won’t have enough scale it out like a real prospect, the book won’t support the publicity budget a potential bestseller would have got, and although you may price the book as if you’d printed more, your conservatism will infect your other behaviors. So your hedge turns into a self-fulfilling prophecy.

The argument against printing for inventory, though involving smaller numbers, is just as compelling in other areas of publishing. I once dealt with a series of annual bibliographical catalogs where we knew exactly how many we’d sell: all the potential customers had signed up for standing orders. Thus we could print exactly the right number of copies: that these numbers ranged from 65 to 250 made the books perfect for short-run digital printing. We didn’t need to make them POD as once we’d filled the standing orders we’d exhausted demand. Not many books are as clear-cut as that, but an academic monograph approaches that sort of demand pattern. Make them truly print-on-demand and you can fill orders for ever without any warehouse involvement. Warehouses are expensive: fulfilling ones and twos out of a warehouse is punishingly inefficient. Print-on-demand, where the book is only printed after it has been ordered provides a survival mechanism.


* I make no claim that these numbers are anything other than simple mathematical examples. I’ve no idea of the profit picture in a trade publishing house. I believe the detail is less important than the general principle here.