Scratching the Surface of Distribution
In the book industry, most of the Big 5 own their own distribution service or use one of the other Big 5 as a distributor. They are able to do that and good for them. For independent small publishers, which distributor one uses can depend upon many factors. It can depend upon the size of the publisher (how many titles are published each year), or a publisher’s reputation (what kinds of titles you publish every year and how they are received) or the fact that most distributors of independent literature have a set of guidelines that a publisher must fit into to even apply to use their distribution service. Let’s take a look at a traditional distribution model for small press books.
Small Press Distribution (SPD) was founded in 1969 with the intent to distribute the books of 5 small publishers. Since then it has grown into a nonprofit book distributor that currently “serves over 400 small and independent presses, the majority of which have no other source of distribution” (SPD About fact sheet from website, retrieved 01/07/2015).
On the SPD About page is this:
When you buy a book from Small Press Distribution, you don’t just get something terrific to read: you help independent publishers and writers keep more money from their projects, which in turn helps nurture and sustain the literary arts as a whole.
That is pretty much what you want to hear from a distributor of small and independent books right? But let’s look at the terms that the publisher is agreeing to when they sign up to get their books distributed by SPD. Here it is from SPD’s online Publisher Handbook:
SPD books are sold at varying discounts depending on the circumstances and the number of books purchased. Publishers are paid 50% of the NET price received for each book sold regardless of discount. Starting with 2014 books, the 100th copy on will earn the publisher 55% of the NET. The average discount at which books are sold is currently 29%, so the average percent of list price publishers receive is 35% for the first 100 books, 38.5% for the 100th on, but this may vary.
So let’s break that down. If a book’s retail price is $15, then the publisher receives on average 35% of that $15, which is $5.25 for each copy sold (goes up slightly after 100 copies sell).
Now consider that since most of these publishers have limited first print runs within the 100-1000 copy range, the price that they have to pay to get the book printed for a somewhat nice quality perfect bound, paperback book (depends on your definition of quality here, the better the quality of paper, cover material, etc, the more expensive it will be) ranges anywhere from $1.70-$4.00 per book, and could be more.
Most of that depends on who the printer is and how many books are ordered (and yes, this includes Print on Demand services like Lulu, Amazon’s CreateSpace, Lightning Source, etc…). So if the cost for the publisher to print the books is more than $5.25 for each copy, then already there is no way to make any profit. That means that the publisher is not making anything and also presumably the writer is not either. But let’s say for the sake of argument that it costs an independent publisher $1.75 per copy to print their books. Then they are still left with $3.50 of profit according to the model above. Or are they?
Looking a little closer, SPD (like many other distributors) charges an annual $180 service fee for all publishers and a $25 new title fee for every time a new title is listed with them. Those service fees are what really make it not worth a publisher’s while to use most distribution services. There is also the fact that the publisher has to pay for the shipping costs of sending their books to the SPD warehouse (shipping fees are nothing to laugh at—why do you think Amazon has been exploring their own ways of bypassing the US Postal Service, UPS and FedEx these last few years by developing their Amazon locker program where you can order something and go and pick it up at a secure location in your city, as well as the whole shipping by drone thing that made headlines on 60 Minutes in late 2013). The last thing to consider is the return of books that were already purchased by bookstores: “Returns to SPD of books for which the publisher has already been paid will be deducted from the next payment.”
All of these things add up. None of this is unique to SPD. Some distributors may give a larger/smaller percentage of net sales to the publisher and some distributors may charge more/less in service fees to the publisher but they all use a similar structure when interacting with publishers. We also must remember that SPD is recognized as a leader in the distribution of small and independent press books within the United States.
I am not trying to pick on SPD with this column. Everyone that I have dealt with there has been very helpful and the customer service, speaking from the publisher side of things, has been very good. After 45 years in the business, they have a built-in customer base made up of libraries and bookstores and consumers that allows the books they distribute to be read by more people and have a wider circulation.Those are some of the reasons to use a distribution service like SPD.
Publicity for a book or writer, especially for a new writer’s first book, can be difficult for an independent small press publisher. When you use a service/distributor like SPD, “publicity” is part of what you’re paying for. Each independent publisher needs to decide if it is worth it for them to use such a service. I know personally, that the price of distribution has been wearing on me lately and I have been exploring other ways in which to try and get books noticed and out there. In the comments section, I would like to hear from anyone, but especially people that work for/at indie small presses about distribution, so we can discuss some more.