(866) 735-3782

How to Lose Money in Publishing

Returns got started during the Great Depression as an incentive for bookstores to keep stocking books even though people weren’t buying. How the internet is the new ‘Great Depression’ in the bookstore business is an article for another time. This is about how returns affect you.

There was a time when we did make books returnable, and even offered returns ‘insurance’. But after years of fighting an uphill battle, and watching the largest returns-processing company go out of business, we did an in-depth analysis of the economics of returnability and came to two conclusions:

Bookstores are not the best place – really not even a good place – to sell a self-published book.

It has nothing to do with the prejudice that bookstores have always shown toward self-published books. That attitude is slowly changing as more and more authors are going it alone. But the sad fact is that Barnes & Noble is not going to shelve your book. The average BN store has over 100,000 titles in the store, and up to 1/3 of those books will be returned to the distributor, remaindered or go on the fire-sale cart at the front of the store in the next few months. New releases are especially hard hit.

BN operates over 1000 stores in the US – that’s well over 100 million books on hand at any given time – so unless they see a significant sales record or a big-dollar marketing campaign behind a book, they aren’t interested. They understand the enormous waste of time, money, paper and effort on everyone’s part that a returned book represents. So they are careful, even draconian, about what they buy.

Similar situations exist at Borders, Books a Million, Powell’s and so on down the line. Independent bookstores are barely hanging on as it is. Other than the one where you shop and know the owner personally, they aren’t likely to take a flyer on you either.

Interesting, little-known fact: Barnes & Noble has two enormous warehouses, one for sending books out to stores, the other for processing returns coming back from stores. One is referred to by BN employees as the ‘happy warehouse’ and the other is the ‘sad warehouse.’ Take a guess which one handles returns.

The other key thing we learned: Even if they did shelve your book, it would still be a bad deal.

There are much better places for an author to put the money.

The few returns programs still available cost upwards of $700 a year. Do the math. If you’re earning say $3.50 per sale (that’s a very optimistic figure for bookstore sales, but just for the sake of argument…) then you have to net – net – 200 bookstore sales to break even. Considering that a store that wants your book will order 2, not 200, that means talking to a lot of independent store owners. With a 33% return rate, you have to put at least 600 books on store shelves and sell 400 of them before you earn a dime. And that does not count the cost of promotion in the first place.

Bottom line: There are much better ways to spend your money and your time.

Do we just enjoy being the wet blanket here? Not at all. But we’re dedicated to being straight with our authors, even if it means that occasionally one of them decides instead to give Autrohouse several thousand dollars with stars in their eyes.

So how can you make a profit self-publishing?

Read our article on Selling Books Without Bookstores.