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Borders Should Just Go Bust
Contributor
Written by
Zetta Brown
January 2011
Contributor
Written by
Zetta Brown
January 2011

Borders Bookstores have been clinging to life like a Hollywood diva clings to Botox—with bony, scraggy fingers holding on to a dream.

Just die already!!

Borders announced that they are “delaying January payments to vendors and landlords in a move to conserve cash.”

Gee, I wish I could do that! “Sorry! I won’t be paying my bills on time because I need to save my cash.”

Frankly, Borders is a reflection of the traditional bookstore system. It’s hardly surprising that they are failing because the economics behind supplying bookstores is totally bogus. Think about it. Bookstores demand huge discounts from publishers to buy books to stock their shelves plus they expect to be able to return unsold books for full credit. And if the bookstore is allowed to strip the book before returning it (while getting full credit) to the publisher...

Don’t know what book stripping is? That’s when a bookstore rips the front cover off the books they don’t sell before returning them to the publisher. It’s like the store says, “We can’t sell this book so we’re making sure no one else can, either.” And, after returning these damage goods, the bookstore is still entitled to a full refund on the books that they purchased at a discount. Did I mention that in many cases bookstores can return books at any time, ad infinitum? Even years later after a book has gone out of print?

This is what publishers must accept if they want their titles in all those stores. Add in the cut that the distribution outlet gets, plus costs for shipping, handling, storage, etc., it’s very easy to see why authors end up getting a very small piece of that SRP pie. Figure in other things like inflation and that the dollar earned in 2010 is worth less than the dollar returned in 2011, and you can see how losses accumulate.

Bookstores use this to great effect because they can, in essence, get free stock, make a profit off what they sell, and then get money back for what they don’t sell or credit for future “purchases.” Time it right, and a retailer can get around paying any kind of real money. This, in turn, trickles down to effect royalties.

What kind of business strategy is that? It’s a canny one if you’re a bookstore, and it’s been the name of the game for decades, and yet, bookstores still manage to go into the red.

This is the dark, stupid side of publishing. And the sad thing is that many authors do not know about this. They will blithely blame the “greedy publisher” if their book doesn’t sell because it can’t be found in every bookstore not understanding that the bookstores have those books on credit—and if they don’t sell, those books go back to the publisher. And if the publisher doesn’t make money off your book, then neither will you, Sunshine.

One of my mentors is an author who has been writing and publishing for over 30 years, and I remember her talking about every royalty statement is laced with excitement and fear. How much money did she earn...and are there any returns?

The publisher will recoup the lost money via your royalties. If you don’t sell out to cover your advance (if you’re lucky to have one), don’t expect another book deal. Or, if your publisher gets returns on your book after paying you royalties, you may have to refund them or future payments will be less until those returns are paid.

Do they teach this in MFA programs? Seriously, I’d like to know. If they did, I think more authors would come into this without rose-tinted glasses.

Can you imagine if other businesses adopted the bookseller method? Take real estate. “Buy” that huge mansion at a deeply discounted price, live in it for six months, trash it, and then say, “No, thanks. I can’t make any resale profit on this. Give me my money back.” Wait a minute...considering the recent real estate and credit bust, in a way this did happen...And you see how many people got screwed.

Other businesses don’t operate this way because it’s a crazy way to do business.

Well I say, stuff it. This is the twenty-first century. Charles Dickens is dead and dust and so it should be for this Dickensian way of doing business.

Being a small, indie publisher, we used to worry about not having a presence in physical bookstores, but not anymore. We’re not going to expose ourselves to this kind of wasteful and idiotic system. Not only does it put our earnings at risk but that of our authors, and it’s hard enough to make money in publishing as it is. We are gaining more steam every month and paying royalties to authors whose books do well. Why should we jeopardize that just so a bookstore can get free books off us or an author can see their book in every bookstore? It’s one thing if they want to see it in their local store(s), but we’re not interested in nationwide scale.

Some people look down their nose at print-on-demand. It’s not “real” publishing. Printing thousands of books at once and storing them in a warehouse—that’s real publishing. Having thousands of books stripped and returned to the publisher—that’s real publishing. Print-on-demand is the equivalent of used toilet tissue in their estimation. These are usually the same people that don’t know that even the major big dawgs are starting to use print-on-demand in some areas to save cost and keep more books in print. Take Random House’s The Random Collection.  If print-on-demand technology is good enough for the biggest publisher in the world, surely it’s good enough for any other publisher? We’ll stick to the used toilet tissue method, thank you very much, because it’s paying off.

Borders has been borderline for a long time. Now is the time for it and the “standard” practice of supplying physical bookstores to flatline.

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Comments
  • Zetta Brown

    Thanks, Lovenia. This is just an example of waste in the industry. I think if authors and publishers demanded bookstores to change their practices--and encouraged consumers to do the same, everyone will benefit.

    We all know we can't live on credit alone, and if anyone doubts that, just take a look at the world's economy.

  • Lovenia Leapart

    Great article...but sad and maddening too! I'm a newbie, still unpublished and yet keeping track as much as I can of the changes going on in publishing and sometimes it's overwhelming. Never knew about stripping books!  Horrible! I can't imagine publishers letting them get away with such a thing! I'm so much a bibliophile and not personally into e-books, so in the beginning did not really welcome them. But it seems this new trend is very helpful to authors, especially those in my position, and readers, so I'm definitely more on board with it now!

  • Zetta Brown

    @N. Angail - yes, stripping books is a very disturbing idea, and the fact that it's been happening for decades, you can understand how completely wasteful the entire practice is. However, I've heard a rumor that this can also be the practice in (some) print-on-demand distributors when books are returned. Like I said, it's only a rumor I've heard so I have no idea if it's true or not. But publishers have the option on whether or not bookstores/booksellers can return unsold stock and it's these returns that get stripped.

     

    We do not accept returns for our books. We don't want sellers buying say, 100 books an returning 97. Stores should buy more responsibly, in our opinion. If we do accept returns, we stipulate that they must be in saleable condition (NO STRIPPING) and we'll even pay s&h. You're not going to ruin our stock without paying for it LOL

  • N. Angail

    Wow, this is very upsetting, esp. the whole "stripping" thing. I had no idea. I have a lot to learn. I've self published and just been pushing my books myself.

  • Dera R Williams Writing

    Great article and very educational. I didn't know all the intracacies that go into getting books into the stores. I agree, time to go.

  • Zetta Brown

    Hi Nicky,

    It's interesting what you say about audiobooks. It would be nice to know more about that side of the industry. 

    I have nothing against indie bookstores, but from what I hear from colleagues, they can be just as bad as the chain stores when it comes to excessive returns and/or not paying. IMO, if more stores were responsible in this area, EVERYONE would benefit: stores, publishers, authors, readers.

  • Nicky Wheeler-Nicholson

    Zetta, Thank you for the straight talk about the realities of the business. Your points about the realities of publishing are too true for any small publisher and that includes an audio publisher. The difference is that we don't get our beautifully crafted, expensively made boxed sets returned with covers off, we just don't get them back at all!

     

    Amazon has the most bizarre accounting system I've ever encountered. I've had a running total since the mid-90's and it has never, ever added up to what has been ordered and payments received. Let's not mention all the various ways that the distributors have of extracting money from small publishers--all the extra fees, etc. because you're too small for them to deal with meanwhile they need product to add to their list. There is also the very strange attitude of some readers who feel that they shouldn't have to pay for audio or that they should pay as little as possible coupled with the percentage that the audio distributors take (most over 75%--no joke!) and once again the deck is stacked in favor of the mega corporation who can churn out cookie cutter products in large formats cheaply.

     

    Providing books "on demand" in whatever format is the only way for a small publisher to stay in the game. I think the more authors and readers understand the real economics of the industry, the better chance there is for a healthier business model. 

     

    Along those lines, I will say that without the love of literature of supportive and savvy authors and the good energy and effort of many wonderful small independent bookstores we never would have made it. As far as I'm concerned people who truly love books whether they are publishers, editors, writers or bookstore owners are the heart and soul of publishing and we need to keep nourishing one another in order to thrive. We have our share of dysfunctional store owners but 99% of the time they love books so much and provide such a welcoming space for our products that we just figure out a strategy to deal with it. That's what you can do when you're small and flexible and nimble. Good luck all you Megamediaegosaurus Rexes out there. You do know what happened don't you?

  • Judith Marshall

    I totally agree with you, Zetta. I'm proud to be independently published.  And the producer who optioned my novel for film wasn't the least bit concerned -- in fact, she was happy to know I owned the rights.

    Judith Marshall

    Author of "Husbands May Come and Go but Friends are Forever"

    www.judithmarshall.net

     

  • TK Turner

    Good post.