Recently Baker and Taylor, one of the largest book distributors in the US, announced that it was shutting down its retail branch. A lot of the authors I know reacted to the news with a "meh" or "okay, whatever" type of reaction while others who know more about the retail side of the business were uttering long strings of expletives. Both reactions are valid for different reasons but I wanted to go into more depth of what exactly this change means and how it affects authors as well as bookstores because I suspect that there are many who don't understand the situation.
Not only was Baker and Taylor one of the largest book distributors left it's also one of the last. There are still a few small regional distributors on the east coast but B&T and Ingram are the big boys. If a store didn't want to order directly from every publishing company whose books they sell (and few do because that's a huge headache) or if they're like some store who can't order directly because the big publishers are terrible at processing new account information in a timely manner then they have to order through a distributor. B&T gave a slightly better discount than Ingram and had some other great perks so out of the two they were the preferable company to deal with.
I do want to emphasize that B&T isn't going out of business. Their library sales and distribution division is still business as usual. It's only the book store side that they're shutting down slowly over the next two months. The reason why is a little hazy. Their public press release said one thing while their press release to their retail clients (the bookstores) said another. It could very well be both reasons but without further information it's impossible to know for sure. As far as I can tell it was a corporate/executive decision and most of the folks at B&T had no clue it was coming. Their staff are as sad about the announcement as the stores are and this definitely wasn't done on a whim. The execs put a lot of thought and study into other options before pulling the plug.
On the book store side the announcement has caused a lot of panic because now it limits options for ordering new stock and whether or not they can discount titles to stay competitive. It also may affect what stores choose to stock because the slightly less favorable terms mean that it's harder to financially justify taking a chance on a new author or a book on an esoteric subject matter. (More on that later.) Pretty much every bookselling association in the country has been emailing Ingram since the announcement to find out what their plans are to facilitate the extra demand they're going to recieve. The only information that's come out of Ingram so far is that they're committed to helping stores that don't already have accounts with them get set up and that they intend to increase their stock. The first point it great and a relief to hear. The second point has me worried. Why? Ingram hasn't revealed how they're going to increase stock and what they're increasing stock on.
There are three options that I can see for how they can increase stock.
Option 1: If they have unused warehouse space then they already have the ability to increase stock. Ingram has multiple warehouses across the country so it's possible they can put up more shelving to accommodate the extra stock. I don't believe it's probable but it is possible.
Option 2: They can decrease their stock of slower selling authors and/or subject matters and sidelines to create room for the more popular items. This is an option I think is far more likely since it's something that they're already practicing. They like to keep a pretty fast turn around so they have as little stock sitting around as possible. It's not unusual for them to have almost completely phased out of stock a title that's only been out two or three months -- and once they've phased it out that's it. They're not ever going to restock it.
Option 3: Purchase more warehouses and hire the necessary staff to run them. This would be the smartest move for them, especially since their business is going to increase, and the best option for the book business and publishing as a whole. Will they actually fork out the money to do this? I don't know. My fingers are crossed.
There is a pretty unlikely but not too far out of the realm of possibility option 4; which is to convince the big publishers to do more print on demand trade paperbacks. Some large publishers like Macmillan already do this and Ingram has a POD division that can facilitate it. The downside is that they're often outrageously priced which makes it highly unlikely that the public will like it if it does happen.
Whatever option Ingram chooses it's going to be rough the first few months as they figure out exactly how much their demand has changed and publishers figure out how much more of a print run they have to set aside for the Ingram order. Publishers are already kind of slow to fulfill Ingram orders (it's not unusual for it to take 2-4 weeks for stock to reach the Ingram warehouses) so part of the solution will depend on how publishers react and adapt as well. Hopefully they adapt quickly so stores don't lose too much in the transition. It's hard to ask customers to wait a few weeks for the warehouse to restock when they can go online and have it on their doorstep the next day. Those lost sales hurt and since brick and mortar stores are on the rebound it would be a shame to see any store have to close because they lost too much money waiting for backordered stock to arrive.
How does all of this affect authors? If you're traditionally published it's going to affect you the most. I'm willing to bet that most of Ingram's increased stock is going to be bestsellers and new releases that have received a lot of positive pre-release buzz. For new authors and mid-list authors it's going to be a lot harder to stay in the game. It won't be impossible but it's going to be harder to have the blockbuster first week sales to get another book deal because the necessary stock level for those kind of sales numbers isn't likely to be in the Ingram warehouse. I'd love to be proven wrong on that but honestly, I don't foresee it happening. For NYT bestsellers the worst I foresee happening to them is that they have to carry large stacks of book plates to sign when they're on tour so the people who couldn't get their hands on a copy because of warehouse shortages can still get a signature.
For indie authors this can be a great opportunity -- especially if you distribute through Ingram Sparks. If you don't distribute through Ingram Sparks now would be a good time to start. Ingram Sparks titles won't be effected by warehouse space shortages at all because those come from separate facilities. The big key is to make sure your books are available at the industry standard discount (that's 70-75% on the back end so it's the standard 40-45% on the store's end). These coming weeks as stores transition over would be a great time to visit local indie stores or mail them a one page sell sheet about your books and highlight the information about them being available POD at Ingram at the standard discount. I believe that information will become a bigger selling point then it was before since orders for POD titles can fulfilled without any additional hassle. In these early transition months your titles will be easier for a store to restock than a lot of traditionally published titles.
If I hear more concrete information in the coming months I'll add it to this post but this is all I know right now. I hope the situation and the ramifications are more clear to you than it was before. I'm still hoping that the transition will be more smooth than I expect it to be but I'm not holding my breath either. As they say, only time will tell.
