The Point of No Returns

“The problem is that everything has to be very standardized, so it’s not as though you can deal with one store with your left hand and the other with your right hand,” she adds.

Rich Freese, president of Bookmasters Distribution Services in Ashland, Ohio, says publishers are beginning to try the markdown route—but echoes Shanley’s misgivings about its long-term viability as an alternative to returns.

“Shared in-store markdowns are a way publishers are working with retailers to increase sales and reduce returns on overstocked items,” he says. “The problem with markdowns is that too often the book is perceived to have failed to meet expectations, and as a result is considered a failure. [It is then] harder to establish a long life, and almost impossible in the same format.”

Freese says some publishers are beginning to provide additional discount terms to retailers who place larger orders and for greater control over returns, but he adds, he’s “not sure how effective this is [yet]. Few true incentives are under way.”

The reason for this lackluster response to the problem may be systemic, and the prescription may be tough to swallow, especially for larger publishers, believes Eric Kampmann, president of Midpoint Trade Books Inc. and Beaufort Books. A high returns rate is, he believes, the consequence of spending too much on the development end (including on author advances and royalties), necessitating pressure to produce “extravagant” sales numbers upon a book’s release.

“No one seemed to say ‘stop,’” he says of the traditional environment of escalating royalty costs, which assumes perpetual growth in a healthy economy, “and so the high cost of acquisitions has led to escalating costs right down the line, leading, of course, to higher returns. It is all very predictable. Wouldn’t the better operating philosophy be: ‘Buy cheap, sell dear’? It seems that the book business has reversed the order and is proud of buying for very dear and selling (ultimately) very cheap.”