plan on signing with a book distributor? look before you leap

8/6/2019 Plan on Signing with a Book Distributor? Look Before You Leap

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Do You Need a

Distributor/Wholesaler?

Look Before You Leap

Stephen Blake Mettee

TheWriteThought.com



Distributors:

� Warehouse some of a publisher¶s print run.

� Present titles to retailers and libraries via live calls, catalogs, and

other means.

� Often require you use them for e-book sales as well as print

books.

� Pull, package, and ship orders.

� Invoice the retailers and libraries.

� Collect the accounts.

� Usually pay 120 days after a sale is made.



Wholesalers:

� Often warehouse some of a publisher¶s print run, other

times, only order when they get an order.

� Present titles to retailers and libraries via catalogs, often at

an additional charge to be in the catalog.

� Usually don¶t get involved in e-book sales.

� Pull, package, and ship orders.

� Invoice the retailers and libraries.

� Collect the accounts.� Usually pay 90 days from date of shipment from publisher



Read your contract and make sure you

understand what you are agreeing to.



This clause appears to broadly limit a distributor¶srequirement to perform.

___________________

³Publisher accepts that its publicity and PR efforts in support of its title(s)

are crucial to its (their) success, and understands that [distributor¶s] efforts to market

any title must be proportional to that publicity and PR effort, the adequacy of which

will be determined by [distributor¶s] sole judgment; and further Publisher holds

[distributor] harmless from any allegation or claim that [distributor] did not use its best

efforts, or did not perform any duty arising from any provision of this agreement, or

meet any supposed standard or custom of the book trade, to marketP

ublisher¶stitle(s).´



This clause appears to limit a publisher¶s right tosell a hot title to a larger publisher.

___________________

³Publisher will inform [distributor] of any contemplated sale of rights of Publisher¶s

books that could substantially affect [distributor¶s] distribution efforts, and will not conclude any

rights sales that would in [distributor¶s] sole judgment substantially adversely affect sales of the

books during the term of this agreement. R ights sales include the sale of the rights of the book to be

published by another publisher in any format.´



This clause in a wholesaler¶s contract spells outa reality of the book trade.

___________________

³Returns Policy: BOOKS ARE FULLY RETUR NABLE FOR FULL CREDIT

(including stickered, damaged, and unsalable books).´



Profit Analysis with

All Trade Sales Going Though a Distributor

R etail Price of book $14.95

Price at which distributor sells a book @average discount of 53% $ 7.18

Less the publisher's estimated costs:

Print cost $ 1.50

Author R oyalty @ 8% $ 1.20

Freight to distributor ( at $10 per 40 copies) $ 0.25

Distributor's fee at 30% $ 2.15

Distributor's fee on returned copies (20% returns, 10% fee) $ 0.18

Total costs $ 5.28

Gross to publisher $ 1.90

Gross to publisher on 2,500 print run $4,745



Profit Analysis with

All Trade Sales Going Through a Wholesaler *

R etail Price of book $14.95

The discount to a wholesaler is usually 55%, publisher keeps 45% $ 6.73

Less the publisher's estimated costs:

Print cost $ 1.50

Author R

oyalty @ 8% $ 1.20Freight to wholesaler ( at $10 per 40 copies) $ 0.25

Wholesalers often have nickel and dime fees, let¶s say 0.5%$ 0.03

Wholesaler¶s fee on returned copies $ 0.00

Total costs $ 2.98

Gross to publisher $ 3.75

Gross to publisher on 2,500 print run $ 9,375

* Actually, this is a bit skewed, if you don¶t use a distributor some trade sales are bound to be made directly,

usually at a lesser discount than the 55% that wholesalers require, allowing for a greater gross to the publisher.



In Case You Missed It«

That¶s $4,745 versus $9,375.

How much more marketing can you do with

an extra $1.85 per book?



� E- book retailers, like Amazon or Apple, wish to have the

largest selection possible, so there is little to no sales effort involved

to getting them to offer a publisher¶s books.

� Publishers can choose to take on the burden of placing their

books into the e- book stores themselves or paying someone a flat fee

to do it for them.

Let¶s Add E-Books to the Mix



With a Distributor

E- books 750 $2,873

Print books 1,750 $3,325

Totals 2,500 $6,198

Without a Distributor

E- books 750 $5,224

Print books 608 $1,541

Totals 1,358 $6,198

____________________

Assumptions on the e- book transactions: retail price $9.95; e-retailer retains 30%; distributor fee of 20% on the remaining 70% if distributor is used; royalties 25% of net from e-retailer; no costs for

printing or freight, no return fees.

With Constant E-Book Sales, even Fewer Print Book Sales Sans Distributor

Are R equired to R eturn the same R evenue



Thanks!

plan on signing with a book distributor? look before you leap

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