Ingram

Shelf Awareness‘s dedicated issue of September 26th, 2016 gives a detailed picture of Ingram Content Group as it was in those innocent times. Their piece includes this little gif which is no doubt now out-of-date. But I leave it in ‘cos I can’t make a gif myself, so am a bit impressed by it.

Ingram Content Group is part of Ingram Industries, a Nashville-based conglomerate with interests in marine engineering as well as entertainment and the book business. Ingram Industries are big in barges. The Content Group was founded in 2009, though before that there was a large book wholesaling business which had already been engaged in ebook facilitation and on-demand book printing for about a decade. They really have come a long way from their start — the date of which is a bit opaque to me. This New York Times article from 1984 tells us that in 1970 this division of Ingram Industries moved from being a school and library supplier into the wholesale supply of bookstores. Frustratingly it doesn’t tell us when the school and library supply business began, but the Ingrams started making barges shortly after World War II so we can perhaps assume a date between these two limits. Ingram Content Group is still a book wholesaler of course, but it’s so much more.

In this new world of virus consciousness Ingram is possibly even more important to the book trade than ever before. They can ship books to bookstores and now importantly drop-ship to the end reader; they can print books in their Lightning Source operation; they can manage digital files and thus ebooks; they provide warehouse and distribution services for lots of publishers; and of course they are supplying books to myriad bookstores — including Amazon. They are possibly now the biggest force in the book business — empty claim since I’ve no idea how you’d measure, but they are a vital part of the system of book creation and distribution. They are stepping into the breach in these constricted times, doing shipping for many bookstores. This includes Amazon*, who are of course reserving much of their warehouse space for household and medical products. (This of course sounds like a noble task, but one can’t help reflecting that margins are likely to be a good deal better for them with those sorts of product than they are for books, no matter how much they’ve succeeded in nailing publishers to the floor over larger and larger discounts.)

Chris Meadows at TeleRead wonders if Ingram ought not to be closing too in order to protect staff. “Ought” gets us into areas of ethics and moral philosophy which I’m not willing to explore. I dare say employees are glad to have the pay, and let’s hope that safety can be maintained, as well as book supply.

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* Again I speculate on whether this might represent a sign that Amazon’s thinking about abandoning the book business. Getting Ingram to ship on your behalf gets the books out, but must cut into margin quite significantly.

Of course we are all reluctant ever to imagine a book trade different from the one we know and love, but is it possible we are moving towards a world where traditional publishing evolves into an editorial development system, with sales handled by Amazon, and everything else by Ingram? For several years Ingram have offered a print buying service to publishers who don’t want to do their own: I don’t mean just the POD stuff they do at Lightning Source — they will contract with outside book manufacturers for books which print longer runs.

The times we are living through encourage one to get outside the envelope even as we can’t get out of the home.

The way of all flesh?

Chris Meadows speculates at TeleRead on whether the current pandemic will doom face-to-face retail. Once you start thinking through the facts of the situation (would that facts were actually in readier supply) it does become tempting to believe the worst. Anything is possible, and extremes provide a siren call for analysis. (Mr Meadows is innocent of this implication: his piece admirably balanced, despite the arresting question in his headline.)

However I think it’s important to recognize that the outcome of any disaster is obviously not likely to be the best of all possible worlds, but even more importantly, it’s also likely never to end in the absolute worst possible situation. Even those dinosaurs didn’t all drop down dead from one week to the next. Like all things I suspect the outcome will be more nuanced, landing up somewhere in the middle.

There were quite a few bookstores in precarious condition before all this started. They might be compared to those over-70s with pre-existing health conditions. Some of them may make it, and we’ll rejoice when they do. Others start from a stronger place and will doubtless be able to withstand greater stresses. Mr Daunt appeared to be on the right track with Barnes & Noble, giving store managers more responsibility for inventory selection, but this must be putting the whole operation in danger. Layoffs continue apace — let’s hope that our government can get it together to vote support to laid-off workers and small businesses before too many members of Congress are forced into self-isolation!

When we come out the other side of this, as inevitably we will — it’s in no virus’ interest to kill off all its potential hosts — we’ll probably go about our business in different ways than we did before. I’ve been saying that these are early days, and we haven’t yet figured out how to behave under these conditions. Already we are seeing lines painted on the sidewalk outside the supermarket, which is letting people in in small groups, and is showing the queue outside how it should be spacing itself out. Governor Cuomo, who seems to be having a “good war”, was inveighing against all those New Yorkers in the parks last weekend. I dodge and weave when running through the park, and have observed these groups too. A father kicking a football with his two children is a very different story than a group of unrelated youths playing basketball. The family members live in close quarters anyway: the youths come from all over. We need to take care we don’t forbid the first while trying to stamp out the second.

In the case of bookstores, it does seem to me that people rather like having them. Just as the supermarket has the beginnings of a system, so too in a little while will other retail businesses. People want something to read, and we’re clever enough to work out a way to get it to them. I wrote about kerb-side delivery the other day: better systems will develop.

Available from Books Are Magic; half the proceeds go to Binc (The Book Industry Charitable Foundation), the other half to support store employees during the shutdown.

Good news: Pennsylvania which had last week ordered a shutdown of a long list of businesses, has over the weekend decided that printers are providing an essential service and may now continue in operation. Paper mills are also allowed to operate. Once printing works and distribution services shut down distributing books will become almost impossible. Without bookshops, and with Amazon prioritizing household goods and medications, it’s hard to see how anyone’s going to get physical books in any way other than direct mail. Ingram, which is so much more than a book distributor now, has announced it’s staying open. As Shelf Awareness tells us on 23 March, “Noting that it has book distribution and printing facilities in five U.S. locations, in the U.K. and Australia, Ingram Content Group has affirmed that it is remaining opening despite a range of shelter in place, lockdown and other restrictions put into place because of the COVID-19 pandemic. Ingram’s wholesale, distribution, print on demand, and digital services are considered essential, allowing the exemptions, the company said.” Here’s the Publishers Weekly account.

Trees and forests

D. Eadward Tree’s talking about magazines in this 15 January Publishing Executive piece, but his warning of continuing supply difficulties applies to book publishing too. We are definitely in the middle of a large resizing effort in the printing and publishing paper industries.

Now obviously these sorts of problems are being exacerbated and dwarfed by the effects of self-quarantining, sheltering in place, lock down or whatever it is we are up to now. They may even be being rendered irrelevant, as demand withers. We look like we are moving from a supply-side to a demand-side hole. Although you’d think people might well want more books under these conditions, it is becoming harder to obtain them. As they did at Christmas Amazon is deprioritizing books, and focussing their efforts on stuff people really need, like medical supplies and household goods, including no doubt that favorite of hoarders, toilet paper. New York Public Library has closed, though you can still get ebooks from them. Many bookstores have had to shut: what after all is a bookshop without lots of people browsing?  Amazon is shutting its 21 bricks-and-mortar stores. Just yesterday morning Publishers Weekly told us of layoffs totaling 600: who’d have thought three booksellers could employ that many people?

Some bookshops are trying to survive by arranging kerb-side* pick up — you call ahead and when you get to the store someone will bring out the book and quickly give it to you. Books are the magic drug that’ll calm you down, and take your mind off your troubles! It is of course early in the process, and we haven’t yet worked out procedures which will enable us to work around the slowdown in retail, but it seems to me that publishers might seize the opportunity to develop their direct sales to readers. Yes, you need to keep people apart, but once things settle down a bit and testing becomes available (amazing that in the richest country in the world one has to say that!) then surely a “clean” crew could pack and ship from some secure location.

All in all, this ought to be the making of Bookshop.

There seems little doubt that publishers, most of whom are telling staff to work from home already, will be seeing a sales shrinkage. Probably the sharpest effect will be on trade books which are about to be published. Many titles are being delayed. It seems probable that booksellers will tend to favor books they know they can sell, rather than new books which have yet to establish their position in the marketplace. Backlist in other words, should perform less badly than front list. Beating that poor old horse yet again, let me say — set your books up for print on demand now. But this is all so new and unprecedented that we haven’t yet worked out how it is we should behave under these circumstances. I’d expect that in a couple of weeks we’ll have got a bit more used to new conditions and will begin to establish routines which may end up becoming a permanent part of our brave new world. Strange to reflect that all this is having a beneficial effect on our climate problems.

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* In America we seem to have decided that this is to be spelled curb-side. I love the signs that tell me to curb my dog: not that I have one any more. You curb a horse, but a dog wearing a bit I haven’t seen.

The Printing House

Photo: Jeremy Mynott

The Times and Star of Workington informs us that plans are afoot to revive the Printing House on Main Street, Cockermouth. Cockermouth is a small Cumbrian town located about halfway between Workington on the coast opposite the Isle of Man, and Bassenthwaite Lake at the northern end of the Lake District.

Until 2009 this quaint (and quite large) building was a bookshop, which also sold art materials, and contained a gallery and printing museum. There are a few murky photos of the museum collection at Metal Type. The new owners aren’t sure what the place can be turned into: much will depend upon planning permission, but they are committed to preserving the look of the place.

Next door is the somewhat more splendiferous Georgian house in which William Wordsworth was born in 1770. Wordsworth’s father, John Wordsworth, was, following in his father’s footsteps, legal agent for the Earl of Lonsdale, and was appointed Bailiff and Recorder of Cockermouth. He was also Coroner for the Seigniory of Millom — now there’s a job title! The house is now owned and run by The National Trust, so once we are allowed to travel again, you can visit, and while there give a glance to check up on progress at The Printing House just to the right of Wordsworth’s head in the photo. In November 2009 there were floods in the area and Wordsworth House was flooded. Luckily volunteers were able to move many of the historical artifacts to the upper floors. Sounds like the Printing House next door may have been less fortunate.

For aspiring lady or gentleman booksellers unable to get a turn in Wigtown, here’s your opportunity make a bid in an attempt to share the fun only 113 miles away — though much closer as the crow (or the seagull) flies.

See safe terms

We have long lived in a book world where there’s an apparent fiction at work over the ownership of the books as they sit about between publisher and ultimate customer. Bookstores send publishers orders, and the publishers (if the bookstore’s credit record is clear) will ship the books to them accompanied by an invoice, billing the cost of books, less discount, to the bookseller’s account. All seems pretty straight-forward: the bookstore has bought the books. Bookstores tend to get fairly generous credit terms from publishers, and may not face having to pay anything for two or three months. From an insurance perspective the books do now indeed belong to the bookstore: if the shop burns down, the bookseller’s insurance company is the one on the hook. But essentially the bookstore has those books there on a sale-or-return basis. If nobody comes into their shop to buy the books they will pack them up and return them to the publisher for full credit. The publisher will even pick up the freight cost. Thus in a way the bookstore doesn’t finally “own” the books till they sell them. This is formally termed a guaranteed sale arrangement.

Taking the logic of returns further, we now effectively live in a world of consignment buying, as reported in Shelf Awareness of February 18th 2014. Consignment is also called sale-or-return, although consignment selling might in its purest manifestation involve payment of a commission on the sale, rather than conversion to a discount sale as is done with books.

The reason the book trade came up with the idea of offering full returnability, is basically a marketing issue. You want to have books available in bookstores at publication date, preferably in profusion, so that anyone who reacts to the marketing hullabaloo by impulsively deciding to part with their money is able to do so without having to wait for a special order to arrive, by which time second thoughts may well have supervened, or the impulse to buy something else preempted the funds. To achieve this hyper-stocked position your sales representatives will seek to persuade bookstores to order more stock than they’d ever need under any circumstances other than the wildest bestsellerdom. It’s in the publishers’ interest for bookstores to over-order: it’s in booksellers’ interest to order cautiously. To overcome this dilemma the publisher moves the financial risk from the bookstore to their own accounting department by guaranteeing to take back unsold copies. “See safe” terms was what we often called such consignment deals in the days before they became the norm. This terminology was invented in Britain in the thirties when suddenly no-one could afford to buy anything. Better to have some books in front of the retail customer than to insist on the niceties of normal trade terms, so we’d see the bookseller safe so that we could make a sale.

The wheeze of guaranteed sale/sale-or-return, which now governs trade publishing, originated in the USA. When I worked in book sales in Britain in the sixties, the idea of returns hadn’t been invented — in the UK at least. I might occasionally get a phone call (actually, in those days it would almost certainly not have been a phone call, but a letter) from a bookshop that had made an ordering error, and of course we’d agree to take the books back for credit. But this was a very rare happening. We did however occasionally make arrangements for a consignment or see safe sale. Perhaps there was a special event, and the publisher would arrange for books to be supplied to the local bookstore on a see safe basis — after all who could know how many attendees there’d be and what proportion of them would want to buy a copy. Publishers are by nature optimists, but in many instances the reason for offering books for sale was mainly to appease a demanding author. Not fair to impose the cost of such promotion of the bookstore. These see-safe books would go out with a pro-forma invoice, recorded on the bookstore’s account but not billed to them. After the event, the books sold would be billed and unsold copies would be returned, though if there weren’t too many, they would often just be put into stock by the bookshop and paid for too. These sorts of book promotion events occur regularly to this day.

Bookstore services

Peter Osnos has written a piece at Medium in which he discusses bookstore marketing techniques. We are all delighted that numbers of independent bookstores are experiencing slight growth. But the problems of running a small, specialist business remain immense, with rents probably number one. Staffing must be a bit of an issue too. Long ago booksellers figured out that selling other stuff made sense: cards, stationery, book lights, what have you, and recently we’ve seen lots of bookstores taking the risk of spillage by setting up in-store coffee bars.

But bookstores are of course primarily involved in selling books. They put them on the shelf and hope to pique interest. But isn’t it crazy that bookstores don’t offer to sell you an ebook? Sure it’s easy enough to get ebooks from Amazon, but why not at least offer? And when offering to order a print book, why not suggest mailing it to the customer as a standard option? Sure Amazon’s probably giving most of them free postage, but a person wouldn’t be in your shop if they weren’t at least a little bit motivated to support their local businesses. The other day I phoned one of my favorite independent bookstores to check the availability of a book I wanted. The bookstore clerk’s answer to my question “Do you have a copy Book X* in stock?” was simply “Let me look it up . . . No. We don’t have that one.” And goodbye. Needless to say that conversation didn’t lead to a sale. Which is really dumb. Now not all bookstore employees are equally efficient or motivated, and I may have called on a bad day, but if you’ve got a live one on the line, you need to do whatever you can to land the fish.

In this context, Bookshop has gone live. Here’s a link to the store. This is not so much a tool for use in the bookstore as a sort of alternative to Amazon. Shelf Awareness notices the start-up in their issue of 31 January, the same issue that drew our attention the the Osnos piece. (I can also recommend the trailer you’ll find there introducing a Lego lifestyle book.) A piece at Wired emphasizes Bookshop‘s affiliate program, whereby organizations like Wired themselves can set up links so that their readers can click through to books and buy them from Bookshop. When this happens the affiliate earns a 10% commission. This whole initiative feels good to me: it could work, though it’ll take promotion by booksellers, who stand to share in profits at the end of the quarter. I do think we need to keep reminding ourselves that competing with Amazon doesn’t have to mean knocking them out. Just securing a share of the market is surely better than having no share (as long as your costs are under control).

Part of the difficulty in getting online, or ebook selling going is that the book industry isn’t a monolith. There’s no Head of Books who can instruct us all to do what they decide we should do. However good an idea it might be to offer to sell ebooks, it remains true that you tend to choose a career in book retailing because you love books — books as physical objects. So although it might be good for business to offer customers an ebook if you don’t have a book in stock, I fear that many booksellers would rather make less money than be forced into “working for the enemy”! No doubt a similar reluctance to online selling might be detected. I dare say there were traditionalists back then who felt the same about books with paper covers, or going further back, books with any covers at all. Eventually the ebook will be seen just as an alternative format, just as the paperback is. Until then bookstores who want to encourage the widest sale will find themselves having to rally staff on a weekly basis.

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* The book in question, which I learned about from a review in The Economist, was Open Borders: The Science and Ethics of Immigration by Bryan Caplan and Zach Weinersmith. The Economist review begins “Economists do not normally write cartoon books. But Bryan Caplan of George Mason University wanted to make a radical argument to the widest possible audience. So he teamed up with Zach Weinersmith, an illustrator with a bold and cheerful brush. The result is a brilliant distillation of the moral, economic and practical arguments for open borders.” I knew I needed help with my vague belief that closed borders were “a bad thing” and this book looked like it would sort me out. (It did.) It’s fascinating: an academic book written in comic book format. Not a graphic novel: a graphic monograph! It’s published by First Second, a graphic books company as a local teenager immediately pointed out, but I’d like to imagine university presses following in their footsteps. First Second is an imprint of Roaring Brook Press, division of the Holzbrinck group.

Buy a pbook; also get an ebook?

About a decade ago one of my bosses proposed the idea of giving buyers of any of our books a free ebook along with the hard copy, but it was suggested more as a joke than anything else. But is it a joke? Why not include the ebook edition with any book purchase? After all someone who has just bought a hardback or paperback edition of one of your books is not likely to be a customer for another copy in whatever format, so you’d not really be losing a sale; you’d be providing a service to your customers. You could probably justify a small price increase on that basis too! Lots of people (myself being the one I mainly have in mind here) will happily read a book partially in print and partially as an ebook if they have access to both formats. So having both as one purchase could be an attractive benefit: it’s hard to read a hefty hardback in a swaying subway car; the iPhone becomes much handier vehicle.

I suppose some people could buy a hardback for their mother’s birthday and keep the ebook for themselves. But this isn’t really anything new: one of the commonest situations with books is that you read your copy and then pass it on to someone else urging them to read it too. (You buy the right to give it away when you buy a p-book — but not when you “buy” an ebook.) Are we really so hung up on the possibility that our customers might indulge in low-level birthday gifting fraud, or that having lost their copy of one our books they might not be forced into buying another because we had given them an extra (digital) copy already? No doubt both things will happen but probably not a lot. Better sharing, in any case, will eventually lead to extra sales: the more there are who like a book, the more there are to tell others about the discovery. Publishers have been doing this sort of thing with textbooks for years: a code printed in the book gives the purchaser access to supplementary material, which can only be accessed by one person. (Of course college textbooks now show every sign of disappearing down that electronic rabbit hole — maybe textbook publishers will have to issue a code which will allow their ebook customers to get a hardback copy too!) Focussing on the downside, means not focussing on sales expansion.

Ebook sales appear to have stabilized (at least for the moment) at about 20%. The days when we all worried about readers abandoning print altogether have passed, and perhaps we should spend a few moments looking at the overall picture. I’m not suggesting publishers should just kiss goodbye to the ebook sale. If a customer wants to buy an ebook, they should of course still be able to buy an ebook. If they want a physical book only, maybe we should allow that too. Lots of periodical subscriptions nowadays offer you three options; digital access for $X; print-only for $X + $Y; and both print and digital for $X + $2Y or something like that. What would be so crazy about pricing books along similar lines? You might envisage the ebook costing $15, the physical book costing $20, and both together costing $21.

One problem: royalties. If the ebook were to be given away for free the author would obviously not be getting any royalty. Contracts will specify a discount level below which royalties will not be payable, and in my pricing example about the ebook “given away” for $1 with the print book the author would get no royalty for the ebook, though a royalty could be paid on $21 rather than $20 to give some compensation. But if the ebook sale would never have taken place anyway — because a person who has bought a p-book is not really a potential customer for an ebook — to what extent is the author suffering? And of course if this sales model were to be accepted, contracts for new books would rapidly be negotiated to take account of the change. If a publisher gives away books at an event, or even if they put a table on the corner of 42nd Street and Broadway and gave people books, no royalties would be payable. The hope and idea is that promotion will increase sales not replace them. Similarly here.

Hay-on-Wye

Here’s an Atlas Obscura video about Book Town Hay-on-Wye.

If you don’t see a video here, please click on the title of this post in order to view it in your browser.

I did a couple of posts about book towns a while back. Anyone interested can find them via the index.

New bookshops

We’ll take good news wherever we find it! Whether or not there used to be more bookshops in Britain (there were actually about twice as many 25 years ago) the fact that there are now seven more UK independent bookstores than last year, and that this is the third successive year of increase, has to count as good news. Publishing Perspectives brings us a story, as also does The Guardian.

So what’s the situation in the USA? Last week brought us news of the marshal’s locking up Book Culture‘s Columbus Avenue store (they have four, this one, one in Long Island City, plus the original two near Columbia University) basically because of non-payment of rent. This is a complicated story involving accusations of fund raising for disguised purposes. Gothamist has a full and frank account. Although some of Book Culture’s troubles appear to be down to mismanagement, it remains true that things do remain tight for bookstores in general. However as this Statista graph shows, numbers continue to increase.

Number of independent bookstores in the U.S. 2009-2019    Image: Statista

One hesitates to suggest that these developments might have more to do with economic recovery than with a growing love of reading. But of course it is true that 2008/2009 wrecked a widespread devastation, and the book business wasn’t exempt. Now the problems seem to be more focussed on rising rents. (Rent on the impounded Book Culture store is reportedly almost $38,000 a month — a lot of books need to be sold to cover that nut.) Like other small businesses independent bookstores are being squeezed out of city centers. Legislators of the world unite — rent control for small “essential” businesses too please.

However a small increase in the number of bookstores is better news for book people than a decrease. Steady as she goes; fingers crossed.

But does this really matter? As Mike Shatzkin tells us in his 2020 think-piece in 1990 there were probably something like 500,000 books in print, and we had a few bookstores that could stock 125,000 of them, almost a quarter of the total. People would, not unreasonably, be able to assume that there was a high probability of their locating the book they wanted at one of these large stores. (Naturally of course, they didn’t have that online alternative.) Now, he estimates we may have upwards of 15,000,000 titles available. Unsurprisingly the bookstore is probably no longer the likeliest place to find what you’re looking for! Accordingly bookshops now emphasize curation, service, local support, rather than the ability to fill all needs. The business is fundamentally changed from thirty years ago — it’s now more boutique than emporium. Prosperous times can keep boutiques afloat; let’s hope that the inevitable business downturn will not act like a hard frost on these tender shoots.

 

Amazon market share

Amazon is notoriously cagey about numbers. All we know for sure are some top level figures. Reasonable assumptions can perhaps be made, notably by the Data Guy at Author Earnings whose focus is self-published books. Here, now Benedict Evans takes a stab at the math aiming at a broader target than just books. He seeks to determine just what Amazon’s market share might be. (Link via Kathy Sandler’s Technology·Innovation·Publishing.)

Publishing people tend to look at Amazon through book-tinted glasses, but although they started out with books (a straightforward, non-perishable product with a pretty inefficient pre-existing distribution system) of course they now sell a lot more things than books; in fact almost everything else. They are still huge in the book trade: Mr Evans figures Amazon disposes of about ½ of printed books, and ¾ of publishers’ ebook sales (not including their own publishing efforts) and I doubt if there exists a book publisher today whose biggest customer isn’t Amazon. But the book business is a tiny business: “If Amazon was still ONLY doing books, and it had even 90% of the US consumer print book market, that is still only 0.2% of US retail.”

If we get past our book fixation we can discern the power of AWS (Amazon Web Services) the cloud computing service. But the real profit is coming from somewhere more surprising: “58% of global Amazon ecommerce is actually made by third parties using its platform, not by Amazon itself.” Mr Evans’ guesstimate of these sales is $42.745 billion* — and for Amazon, a sale here is not the value of the product sold, it’s only the commission they make of the third party sale: in other words mostly profit. We might speculate that Amazon may be doing better from the sale of a used book by a third party merchant than by selling the latest (discounted) bestseller direct to you.

Chart from Benedict Evans

Now that Amazon has planted a flag in bricks-and-mortar retail — their own stores, and more significantly Whole Foods — one speculates where they might go next. Delivery must be a huge cost for them, and unsurprisingly Amazon Logistics is immense. CNBC informs us that Amazon is already delivering almost half of Morgan Stanley’s packages. Amazon also appear to be using the same third-party ploy here. Are FedEx and UPS biting their nails in the same way as publishers? Healthcare is another area they are already colonizing. CB Insights provides an analysis of their strategy. The way Amazon does things is working, but Mr Evans does suggest that the fact that they can only do things in one way, that one excellent way, may end up being a problem in a changing world that may favor flexibility.

In the meantime, as Mr Evans shows us, Amazon’s market share is somewhere between 6% and 60%.

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* And just recall that, as noted in the immediately previous post to this one, the Association of American Publishers reported total book sales for 2018 at $25.8 billion. So just as commission on third party sales of all sorts of things Amazon is clearing almost twice what the traditional book publishing business generates in sales. No wonder their share price is up there.