Distribution:Are We Getting Swept Up in ‘The Tail?’
If there’s ever a good time to talk about the state of book distribution, this would be it. Right now, everyone is abuzz about changes occurring within the system thanks in part to the July release of Chris Anderson’s “The Long Tail: Why the Future of Business is Selling Less of More.” Anderson, editor of Wired magazine, declares the demise of common culture and cites occurrences called “long-tailed distributions,” or distributions to a greater number of smaller markets, rather than one, big mass market. According to Anderson, this helps distributors since they are no longer cut off by bottlenecks of distribution, such as limited shelf space, since more niche markets are developing. In essence, he says everything is becoming available to everyone. Book distribution is just as much within range of that growing, swaying tail as is distribution of any product. But what is its impact on book distribution, and what will its impact be in the future?
The ‘Long Tail’ Trend
According to Mark Suchomel, president, Independent Publishers Group (IPG), a book distributor for independent book publishers throughout the United States, we are getting swept up in “the long tail.” He says book sales are growing not because of the few best-sellers, but because of greater availability of different types of books. Gone are the days when people wanted what everyone else wanted.
“These days, distributors are faced with having to service individuals,” he says. “The more niche markets you can serve and the more specific titles you get to market, the more sales you have.”
The proof is in the pudding. IPG reports more sales of backlist books than ever before, and Suchomel is seeing big-box stores buy up more titles at lower quantities.
Another sure sign this movement is in full swing is the upsurge of online orders. Davida Breier, sales and marketing director for Biblio, a distribution company in Lanham, Md., says online sales for niche titles are something small publishers are definitely tapping into. “I know we have publishers who would likely have no chance of getting their books to market via traditional retail environments because of the specific nature of their titles, but they are thriving online,” she says.
Jane Graf, director of International Publishers Marketing (IPM), in Dulles, Va., agrees, but adds that superstores aren’t buying up new imprints the way they used to.
“Turnover is so fast, and returns are sent back less than 90 days after books reach them,” she says. “It’s more like the movie industry. If a book isn’t making it within the first five weeks, it’s over.”
Graf reports a 50-percent return rate on books, which is causing publishers to target directly the exact niche for the books they publish. “We are now helping publishers find those markets, and I think that’s how distribution has changed. We don’t just send books to Ingram and the chains,” says Graf. “There is more collaboration with publishers to create new markets.”
According to Dave Schanke, market segment vice president of Banta’s general publishing, in Menasha Wis., all of these changes have caused greater demand for a supply chain approach—an approach that involves networks of entities to get books to market.
Schanke says publishers need distributors and fulfillment companies with efficient management systems that handle movement of books from point-of-origin to point-of-consumption. “Publishers are looking at total costs of things, not just how much it is to pack a box and give it to UPS. This is basically because freight costs and infrastructure are being considered, and publishers want to know how quickly and efficiently they can get books to market,” says Schanke.
The supply chain Schanke is referring to does have its kinks, however.
“It can cost $1 million or more just to acquire the appropriate modern supply management software to operate a supply chain,” he says. “This isn’t cheap. If a distributor has a large capital base, it can be pulled off, but this is a huge challenge for the small guys.”
What’s more, big-box retailers have implemented certain restrictions that smaller distributors just can’t accommodate. “To do business with Wal-Mart, a distributor needs to use services like advanced ship notice,” he explains. “Basically, Wal-Mart doesn’t want to spend time and money handling and sorting through the shipments, so a distributor has to plan out exactly what is being sent in each shipment [and when], and they must to adhere to Wal-Mart’s rules and schedules. It’s a lot of work.”
Touching on costs, Suchomel echoes the same concerns over the rise of freight and fuel costs. “When we package, we can’t send [more shipments] of just a few titles [as today’s demand often dictates], we need to send [fewer shipments] of more books,” he says.
While some kinks in the distribution chain are just beginning to appear, others have been around for a long time. Breier says small publishers have always had to struggle against being overshadowed by big houses and, even though “the long tail” is wagging, she says the sheer number of new books released every year is one of the biggest challenges all distributors and publishers face.
Despite greater competition and costs due to larger numbers of new books and publishers, Breier notes increased opportunities for some independent publishers. “In certain respects, the playing field, while not level, does offer some more to small publishers than ever before,” she says.
This may come in the form of gift markets. Suchomel, for instance, says IPG has moved heavily into this market, employing 100 sales reps to cover the gift trade.
“We’re taking existing books and expanding the market for them,” says Suchomel. “We’ve always done a very good job of sales outside of the traditional book trade, but we’ve never gone into the gift market so much.”
Schanke believes there is opportunity for publishers to outsource distribution and fulfillment services. “If I am a publisher, why should I invest in a warehouse and spend a million bucks on management systems when I can put that money in new titles?” he says. “Or if I am a distributor, why don’t I invest that money into sales and marketing?”
Banta does not classify itself as a distributor. Instead, the company offers warehouse and fulfillment services, which distributors and publishers can utilize. Schanke believes services like those offered by Banta will be in greater demand as more niche titles are put out.
What About E-Commerce?
When asked how book distribution has been impacted by services like PubEasy, an e-commerce business-to-business service that uses the Internet to facilitate and speed business between booksellers, publishers, distributors and wholesales, Breier says it has offered some relief to a crowded marketplace.
“Biblio certainly can’t accept all the applicants we receive, so more and more distribution solutions will be needed to accommodate the growing number of publishers and changes in the marketplace,” she says.
Breier adds that the company has adapted to its clients’ needs as far as Electronic Data Interchange (EDI) orders, “but we are traditional in the sense that we do not offer [print-on-demand] or e-book distribution services.”
PubEasy has made no impact on IPM, says Graf, but she says print-on-demand has. “Because books can be kept electronically, five books can be printed just as easily as 500,” says Graf. “This means books will never go out of print. It also means that if I need books from Australia, I don’t have to wait for a ship to come in out of Australia.”
Graf adds that with the rise in popularity of print-on-demand, self publishers are coming out of the woodwork in hopes of utilizing IPM’s services. “We will work only with publishers who produce a minimum of 10 titles a year. It’s just too expensive to put so much effort into fewer titles,” she says.
Graf says Amazon.com and other online stores have been a real godsend for publishers. “People have a greater capacity to sit down and hunt for exactly what they want,” she says. “More distributors will say Amazon.com is among their top five customers. What’s more, books go out, but don’t come back. We don’t have to deal with returns, which is how the industry should be today.”
For IPG, e-commerce solutions have aided in efficiency. Suchomel says IPG’s online orders go right through the system, offering tremendous turnaround time—something that has impacted sales greatly. “Another reason it makes sense for distributors to utilize e-commerce options is because it causes publishers who can’t afford such systems to look to distributors to provide electronic services,” he says.
The Future of Distribution
As for what the future holds for book distribution, Schanke predicts consolidation. “I think those in the business will need to work together to manage freight efficiently, which will result in distributors joining together.”
Graf says, “I don’t think you can ever say distribution will change entirely. There will always be someone wanting a whole pile of books, and there will always be distributors there to get them out. But there has to be a way to make sure all publishers are represented. That means finding specialty areas, whether known for just poetry or just cookbooks. In fact, she adds, “small distributors just may multiply since they will be so adept at handling niche markets.” BB
Sharon R. Cole is a Philadelphia-based freelance writer serving the print industry.