Monday, July 25, 2011

Vendors and publishing

The more you know about the economics of those you
buy from, the more effectively you can deal with them.

Daniel Melcher,
Melcher on Acquisition 

On the face of it, the librarian has only three choices when it comes to choosing vendors to supply books: Books can be purchased directly from their producer, the publisher; from the wholesalers whose function it is to buy books from publishers and resell them to libraries and retail booksellers; or from retail booksellers themselves, either from stores or from a number of retailers who sell their wares via the Internet. The decision as to which vendor or vendors to use is not a simple one, however.

There are literally thousands of publishers in the United States, dozens of wholesalers, and countless retail booksellers in nearly every city and town; most of these purveyors of books are anxious to sell them to libraries. Each entity has its own policies for dealing with the library market, and each has certain strengths and weaknesses. Knowledge of these elements is the best way to guarantee what every library book-buyer seeks: the best possible service at the best possible price.

But how does one gain this necessary knowledge? Trial and error is hardly the answer; it simply doesn’t work because of the large number of variables involved. As a result, the librarian who is not aware of these variables and how to use them to greatest advantage will find the process of choosing a vendor an exercise in frustration – not only for the librarian, but ultimately for the library’s patrons, who get peeved when the books they s eek either do not appear on the shelves at all, or eventually appear only months after interest in them has peaked. Lack of knowledge can also be very costly; some vendors may take advantage of the unprepared librarian’s naiveté and resort to less than ethical tactics once they have the library’s business, perhaps inflating prices arbitrarily, playing with discounts, or the like. Simply accepting vendors’ claims concerning discount and order fulfillment as the final and ultimate truth isn’t very smart either. Any vendor representative with minimal corporate intelligence will promise every one of his or her prospective customers the sun, the moon, and the stars – all at the highest discounts in the business. The problem is that this just isn’t going to happen, no matter how good the vendor is.

The only way to make wise decisions regarding book suppliers is to find out all you can about each type of vendor and then ask two basic questions of others who have had experience with a number of vendors: first, which ones they use and why; and second, which ones should be avoided and why. The first step mentioned above is the easy one; you can begin by asking specific questions of the publishers’ or wholesalers’ representatives, or by writing or calling someone at the company. Keep in mind, however, that when you do this, you’ll be highly unlikely to hear much about the negative side of the vendors’ services. An even better tactic is to make a few phone calls to large library systems, which will usually get you somewhat more objective information. Meetings and conferences are also fertile sources of information. Talk to your colleagues and find out who is really fair, honest, and efficient, and who isn’t. A small investment of time and effort can give the astute acquisitions librarian a re al edge in what is too often a cutthroat business.

Publishers as vendors 
With a few exceptions, it is possible to purchase just about any book in print from its publisher, and there are often good reasons for going directly to the source. In the first place, if the book is still in print, the publisher is more likely than anyone else to have copies available for sale. At the same time, if the book is unavailable for whatever reason, the publisher will report this, often more accurately than wholesalers do.
Some of the order-status information that is routinely given by reputable publishers in their status reports includes:
  • OP. This title is out of print. There is no point in trying to order it from this publisher or from a wholesaler.
  • OS. The title is out of stock at this time but will sooner or later be reprinted. If a reprint date is set, the publisher will report that date also.
  • OSI. The title is out of stock indefinitely. This simply means that the publisher isn’t willing to let the title go out of print yet, but hasn’t decided to reprint it either.
  • NYP. The title is not yet published but is scheduled for publication. If there is a firm publication date, this will be reported here.
  • NOP. Not our publication. For some reason the order was sent to the wrong publisher. Do a little verification and send it to the correct publisher.
With most publishers, you will get most of what you order; however, items not shipped will be those reported using one of the above codes. (There are a few other codes, but they are rarely used and need no consideration here.)

Items that are not shipped (except OP titles) are usually back ordered; that is, the order is held open by the publisher until the books become available or until the end of the period of time that the library has stipulated as its limited cancellation period. The stipulated back-order period can be any length the librarian wishes, but ninety days seems to be the most common and the most workable. It does not tie up the library’s funds invunninably, yet it gives the publisher a reasonable chance to reprint out to reach publication date within the specified period. If back-ordered titles are not available for shipment within the time frame, they are reported as cancelled to the ordering library, which then has the choice of reordering the same book or spending its money on another title.

So far, so good. The library orders; then the publisher ships materials available and reports accurately on unavailable materials. Those publishers (or their order fulfillment agencies) who are good at it fill orders fast and accurately report promptly, supply accurate invoices, ship in containers strong enough to protect their contents from damage, use reputable and most-efficient shipping companies, give the library a reasonable credit for them (usually few or none) as simple and efficient as possible. It then becomes obvious to the library book purchaser which publishers are not responsible, and obtaining those publishers’ products from a wholesaler instead is the best way of circumventing some publishers’ sloppy and inefficient distribution practices.

Ordering from the publisher can be especially valuable to librarians who want some or all of the books in a hurry, but again, this all depends on how good the publisher’s distribution system is. Most publishers can’t hold a carpel to certain of the big wholesalers, whose online ordering capacity almost guarantees delivery of materials in stock, in their warehouses within a day or two. The catch, of course, is the in stock part; if the book is not in the wholesaler’s warehouse at the time a library orders it, the wholesaler first has to order it and then fill the library’s order, thereby adding some delay to the fulfillment process. For this reason, many public librarians who like to have “hot” titles such as probable best-sellers or books on timely topics on the shelves as quickly as they are available in bookstores see ordering directly from the publisher as a real benefit, since it is a recognized fact that the bigger the book, in the case of best-sellers, the quicker the reading public wants it. Once interest peaks, however – usually within a month or two of its hardcover publication, but always once the paperback becomes available – demand diminishes. There is nothing quite so dead as a Danielle Steel or Tom Clancy novel in hardcover a year after its publication date.

Some librarians do not buy best-sellers but still require timely receipt of certain materials, such as reference books that are published on a regular, usually annual, basis. Suppose one orders a set of print encyclopedias at a cost of say, $1,200. Prorating that over a year, the library is paying $100 each month for the set. If the sets are shipped four months into the year, however, those same books cost the library $150 per month. Similarly, each month the library doesn’t have the 2000 edition that it has ordered of Metals Handbook finds the value of the book reduced as well as its cost increased. The only ways to ensure timely receipt are to send orders directly to the publisher or to place such orders on a standing-order basis. In fact, it is necessary to do so for some materials; most encyclopedia publishers, for example, do not sell their wares to wholesalers for resale, and many reference-book publishers follow the same practice.

Whether it’s a sure best-seller, a reference book, or a book that is likely to be in high demand for other reasons, it is wise to order the title six to eight weeks in advance of publication date. Many library systems, for example, order large quantities of a best-selling author’s forthcoming title within this time frame because few publishing houses pay any attention to their announced publication dates; instead they ship books as soon as they are available from the printer – possibly weeks before the announced dates. As a result, these libraries have the books in-house as fast as the bookstores do; by giving this kind of book priority in cataloguing and processing, it can be on the shelves and ready for patrons within a day or so of their receipt. This keeps both patrons and branch librarians happy, and it also gladdens the hearts of technical services staff when they no longer hear the eternal cry, “Where are our books?”

There is also a special reason for ordering reference books in advance of publication date. Most reference publishers print only a certain number of copies, based on the previous year’s sales. There is little point in their printing enough copies “in case” there is greater demand – since experience has shown that demand remains fairly constant – or for purpose of backlist, since no one wants a warehouse full of backlist titles once the next years’ editions have rendered them obsolete. In short, late ordering of this type of materials is likely to leave the library with no copies at all; the supply is used up and that’s that. Just a little forethought can avoid this unpleasant scenario and maintain valuable materials in the library’s collection.

There are some disadvantages to ordering directly from the publisher, however. Any librarian who orders a variety of books in substantial numbers recognizing that dealing direct means a multitude of shipments, an increase of shipping costs (almost nearly always paid by the library), and many invoices to be processed and checks for payment issued. This adds up to an increase in both the possibility of error and a large investment of staff time and effort – that is, money. Plus, there are just too many publishers for the library to deal with them all on a direct basis. Even thinking of sending orders directly to the publisher for all the books that even a small or medium-sized library may want boggles the mind; for larger libraries it amounts to sheer madness. In addition, each publisher has its own policy for distributing books to libraries and charging for them, so too many directs orders can make it nearly impossible to anticipate elements such as the actual price the library will pay for the book, how it will be shipped, how well or how poorly the shipper will pack the books, what the invoice will look like, or how easy or how difficult it will be to return a damaged or wrong book for credit. In other words, monitoring vendor performance is a difficult job to begin with; keeping track of hundreds of dealers and thousands of transactions is nearly impossible.

Finally, libraries almost always pay substantially more for books ordered from a publisher than they do if books are ordered from a good wholesaler. Publishers, by and large, have a singular double standard in their dealings with libraries vis-à-vis wholesalers and retail booksellers. This is reflected nowhere more vividly than in an annual volume published by the American Booksellers Association, The ABA Bookbuyers Handbook. This fact volume lists the discount policies of nearly every major publisher in the United States. I use the plural intentionally, because just about every publisher listed in the Handbook presents two sets of discount policies: one for wholesalers/retailers and one for libraries/institutions. Almost without exception, the discounts for the latter group are substantially lower and in many cases nonexistent. In fact, book prices charged to libraries average 20 percent more than what booksellers pay for exactly the same items. Why?

In the first place, publishers have traditionally viewed the library market as a rather unimportant one. They tend to think of library dollars as relatively insignificant; of libraries as being notoriously slow payers of their bills; of library business practices as highly and needlessly complex and out of date; of libraries purchasing only single copies of most books; of every sale to a library as an absolute guarantee that a reader somewhere will not buy a copy of the book if he or she can get a copy at the library “for nothing.” Finally, there is the publisher’s argument that libraries really only want to buy from the wholesalers anyway, and, given a choice, will inevitably do so; why then, cater to the library market?

Just how valid are these assertions? Not very. The “insignificance” of library dollars was indicated more than a decade ago when the Association of American Publishers, at its annual meeting in Rye, New York, called one segment of its program “Libraries: The Two Billion Dollar Market” (that year’s total annual book volume was $6 billion!). In the year 2000, the ratio remains close: nearly $8 billion for libraries out of about $26 billion annual volume, according to the Bowker Annual. And a hefty segment of those library billions includes a lot of books purchased that pretty much only libraries buy: first novels, poetry, overpriced reference sets, backlist and midlist titles, genre fiction hardcovers, hardcover juvenile books – the list goes on and on.

What about libraries being slow to pay their bills because of their “complex and archaic” business practices? To the former I answer that libraries are no worse than retailers and wholesalers in paying up, and probably a lot better. Publishers Weekly provides a great deal of page space, especially in its “Letters” section, to tales of booksellers having their credit cut off because of nonpayment of their bills, or of bookstores that have gone out of business for the same reason. Half-a-dozen major wholesalers have also gone belly up over the last three decades because their bills got so high that publishers cut off their credit. And what makes this particularly ironic is that both retailers and wholesalers are allowed to return any book unsold, for full credit, for up to a year after the book has sat on the shelves of the store or warehouse, yet they can’t keep up with their book bills? Anyone with minimal common sense might ask the publishing community how a publisher can ever know the state of his or her business when at any time he or she may be inundated with returns for which the buyer will receive face value. A librarian might venture to say that the publishing industry’s returns policy does not lend itself to good business practice, but after all, that’s how publishers started selling books in the eighteenth century. And libraries are archaic?

Indeed, it is also hard to conceive of a more complex and wasteful business practice than trying to maintain a dual accounting system, as publishers routinely do for booksellers on the one hand and libraries on the other. Consider that libraries do order a lot of single copies of books, but so do retail booksellers. (In fact, many libraries frequently order in multiples much larger than their retail counterparts, but that’s easy to forget.) Publishers denigrate library single-copy orders but bend over backwards to support booksellers’ single-copy orders with a process called STOP (Single Title Order Plan), by which booksellers, if they meet a few simple criteria, can get at least a 40 percent discount on each and every single-copy order. Libraries pay full price, with no discount for the same items and have never even had a STOP system offered to them. And, as any good independent bookseller will tell you, the individualized special ordering they do - almost always for a single copy of a book – is what keeps them in business, especially in the face of increasing competition from the chain bookstores. And then there’s that hoary old linker that holds that moment. Somehow if a library buys a book to calculate “free,” it means lower sales for publishers, since no reader will buy a book that is available for nothing. This bogus reasoning gives the publishing world another rationale for deprecating library sales even though it has about as much validity as leaving your molar under your pillow at night for the Tooth Fairy. The truth is that most library users are book people – people who need or want books enough to pay cash for them from time to time, even though the same book may be available to them in their nearby library. In addition, bookstore looms ons and sales seem to have no relation to the number of libraries in their immediate vicinity. And, interestingly enough, each year bookstore sales rise at a rate of about 10 percent – almost exactly as much as library budgets rise each year. If libraries are buying more books, according to prevailing publishing wisdom, then bookstores and bookstore sales ought to be diminishing, which is patently not the case, nor has it ever been.

If nothing else indicates that books will continue to sell no matter how many libraries expand or how many books they have in their collections, the contemporary phenomenon of the chain bookstore does. There is scarcely a community in the country big enough to have even a small shopping mall that does not have its own Borders or Barnes & Noble bookstore; the chains continue to proliferate at an incredible rate. The fact that all these “bookstored” communities have libraries certainly hasn’t stopped the growth of the chains and shows no indication in doing so, any more than libraries have ever had a harmful effect on bookstore sales. What the chains are facing in the new millennium, however, is a much more dangerous competitor than the local library, and it is the phenomenal growth of bookselling over the Internet by such companies as Recognizing this real threat has caused some of the nation’s largest chains, Barnes & Noble for one, to set up their own Websites and aggressively market over the internet; where this will all end up is moot at this point, but it is already beginning to change the face of retail bookselling.

Finally, we have the argument that libraries traditionally buy books from wholesalers, not direct from publishers: there is a great deal of truth to this, but there is also good reasons for it. The first is that publishers, intentional or otherwise, have done just about everything they can – such as the discriminatory discounting – to send library dollars into the coffers of the wholesalers. If anyone doubts that these discriminatory practices occurred, hark back to the U.S. Senate hearings in the 1960s, which ended with a number of publishers settling up with libraries to the tune of $11 million to avoid prosecution for price fixing; it’s all there, in the public record. Given discriminatory pricing and discounting as well as active discouraging by some publishers of direct library business, is it any wonder that libraries have traditionally bought the bulk of their books from wholesalers?

One can only conclude that many American publishers would like to see direct library sales just fade away, to be serviced totally by the wholesalers. This is unlikely, however, given the state of that industry at the dawn of the millennium and the controversies generated by some wholesalers when they do get all of some libraries’ business. (A discussion of these and other problems in dealing with wholesalers follow in Chapter 8.) For good reason, libraries will continue to mix their sources for books and will continue to press for fairness in the pricing and discounting of those books to libraries. Is this likely to happen? It should be noted that many years ago the ALA Council, the ruling body of the American Library Association, passed a resolution that asked trade-book pulishers to examine their individual discount policies in light of their fairness (or lack thereof) to library customers. Although there has been no action on the resolution taken by publishers since then, readers of this book are strongly urged to continue to press for fairer policies. It is in the interest of every library to do so.

Buying from retailers
A final word is in order on the use of retail booksellers as a source for library books. There may be occasions when this makes perfectly good sense for the library purchaser – for instance, sudden insistent patron demand after an author appears on a major television talk show, or needing more copies immediately when requests for a very hot title gets out of hand. In many cases, local bookstores may specialize in books that are hard to locate or not easily available from traditional sources; examples may be a store that specializes in African American books or gay books. It may be easier and not much more costly to get materials from such a local source – plus the local source may be a gold mine of ideas for titles that could be used in the collection but aren’t reviewed in the usual journals.

In terms of good public relations for the library, these strategies may pay off, and so the extra cost of such books may be worth it, but there definitely is a cost factor. A books that the library can get from a wholesaler or even some publishers at a 30 to 40 percent discount will rarely be discounted more than 10 or 20 percent by the retailer (except, of course, for titles that appear on the New York Times bestseller list, which are usually discounted by 30 percent or more), and it is unfair to ask for more than that. The retailer certainly cannot sell books for what he/she pays for them or the store will not be in business for long, so a smaller discount is not unreasonable. At the same time, titles that are in high-demand in the library are often in high demand at retail stores; many retailers resist selling their stock of high-demand titles to libraries at a discount when they can sell to their regular customers at full price, and rightfully so. Add to that the fact that if the store sells too much of this inventory to libraries and doesn’t have books left to sell to retail customers, those customers may be lost forever.

The retail bookseller is a good source only for very special purchases or when time is of the essence. Occasional and careful use of this source can be valuable for the library book buyer, and the benefits may sometimes far outweigh the additional dollars spent, but the caveats above should be considered before using this source routinely.
Eaglen, Audrey. Buying Books. 2nd ed. New York: Neal Schuman Publishers, 2000. Z689 .E33 2000. Chapter 7: Vendors: Retailers and publishers.

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