The Distribution Problem: Monopoly, Control, and Hidden Profits

The Distribution Problem: Monopoly, Control, and Hidden Profits

The news is full of the idea that we should break up big tech. They have a monopoly, after all. They control advertising (Google), shopping (Amazon), information (Facebook), apps, and software (Apple and Microsoft). While there is some debate over whether a breakup is even possible, there is another monopoly that is largely ignored except ty those in the publishing industry: book distribution.

First, let me be clear in saying we are not providing breaking news or amazing information that has come to light, man. We are just stating facts that have already been reported, but hopefully, in a fresh way that lets you, the reader, understand the publishing industry in a new, and hopefully transparent light.

Here’s the thing, and one of the reasons we started Unbound Publishing in the first place: publishers are rarely transparent about how narrow margins are and the obstacles we fact to being profitable. But we think the more that authors, bookstores, and others see these truths and issues, the better we can all work together to solve them. As a result, we want to make a better future for publishing in general.

When it comes to book pricing and distribution, there is a lot that is shrouded in mystery. Here is the low down:

Ingram, Amazon, and Getting a Book in Bookstores

So we have talked before on this blog about print on demand, and how it is the way of the future, but we need to talk about the system currently in place. Because if you think it is easy to navigate and at all fair to authors, publishers, and bookstores, you’ll want to read further.

So let’s look at the options at our disposal. You can print directly through Ingram and offer print on demand. There are some clear advantages, distribution, and promotion being just two of those. There are also a lot of options you can’t get from other print on demand services: interior options for color, hardcover printing, and more.

You can also print through Amazon through a service once called Create Space that has now been migrated to their KDP Print program, although it remains essentially the same. The cost of printing was often lower, but the quality was inferior. There are also fewer options: if you want a cover interior, a premium option is the only one available, and it increased the cost of printing your book significantly.

The kicker of the Amazon printing method is that most indie bookstores understandably won’t order from Amazon. The two are, if you are not aware, pretty much enemies. In fact, it can be argued that Amazon is no author or bookstore’s friend, but when you don’t like the largest bookseller in the world right now, you work with them anyway if that’s where revenue comes from.

Amazon No

But if you want to get in bookstores and libraries, publishing through Amazon, especially using one of their “free” ISBN numbers won’t get you there.

The solution is that many publishers create two paperback editions when possible: one for Amazon and one for Ingram. On Ingram, they just make sure that distribution to Amazon is not checked, and on Amazon, they make sure they don’t opt for the expanded distribution options. That way, you have print books available in both places.

It’s impractical, it’s cumbersome, but it’s the easiest way to make both of the distribution monopolies happy.

The Retail Discount

In order for bookstores to carry your book, you have to offer them a discount from retail. Ingram recommends anywhere from 30-55%. The ideal for any bookstore is a 55% discount and books must be returnable. So many authors and publishers select that option. Because you want bookstores to carry your books, and you want to make it easy for them.

And you think that is what you are doing until you go to your local indie bookstore and ask a few questions. Truth? They don’t get that entire discount. It’s been written about before here and here, but Ingram uses a US-based company called Ingram Content Group to distribute books to bookstores.

They determine the discount a bookstore gets, and guess what happens to that other revenue you offered with the discount? It rarely comes back to the author. Ingram Books keeps it. That’s how they make money. So your local indie bookstore could be getting a 5% discount on your book when they order rather than the 55% you opted for.

How do they get away with it? Simple. Authors don’t really have a choice. Most bookstores order through Ingram and Bowker because books are returnable and they get a discount, and it’s just less cumbersome than ordering direct from each author and publisher (unless the publisher has a huge catalog).

What Do We Do About It?

First, we offer books directly to bookstores and others at wholesale rates, so if you are a bookstore or someone in the industry, and you want to carry our books and get a more significant discount (if you feel you are getting a poor deal from Ingram) please contact us. We really do want to help any way we can.

Second, there are some new players emerging in the print-on-demand space. Draft2Digital and other eBook distributors are experimenting with print and audiobook distribution. This means there could be viable options to both Ingram and Amazon in the near future, ones that would work well with Indie booksellers, libraries, and others.

Third, publicity and a certain amount of backlash on Ingram and others have created pressure to work better with Indie bookstores and others to make policies more transparent, and discounts more viable.

The Pandemic Effect

Lastly, an effect that cannot be ignored is the pandemic effect post-COIVID. Bookstores are slowly reopening, but some have closed for good, unable to weather closures and restrictions, and also either unable or unwilling to look at online operations and digital sales as a solution.

This means that in some areas especially, there are libraries and bookstores that remain closed and may never reopen. Does that mean authors and publishers should be discouraged? Not at all. It means there must be a shift in mentality and creativity to other ways to get books in the hands of bookstores and retailers. Online stores, direct to consumer (DTC) sales from the author and publisher site and more must be considered.

And events will happen again. Bookstores and libraries will open. Readers hungry for content will return in large numbers.

How do we make print profitable and viable for everyone? The move to print on demand and the embracing of modern technology is one answer. So is working with authors, bookstores, and publishers to solve the distribution monopoly problem. We can’t count on government regulation, so we in the market must be the ones to drive change.

Why Print on Demand is the Publishing Platform of Tomorrow

Why Print on Demand is the Publishing Platform of Tomorrow

Over a decade ago now, a revolution started. We all thought it would be the eBook revolution, and a ton of fiction authors bet their living and livelihood on it. But we were wrong. The eBook revolution never came, not the way we expected. Instead, it became a hybrid of multi-media, print on demand, and digital marketing.

But it did open up options for authors, including me. No longer were we tied to the “get lucky” or “get noticed” system of traditional publishing. Gone were the days of huge advances, and authors slinging books from their ivory towers to the masses unless you already had a big name. But you could build a pretty solid following for your books and your author brand, and actually make a living writing.

Beyond just author opportunities, the “self-publishing revolution” opened the door for other opportunities as well. Editors, cover designers, formatters, marketing, and PR professionals, and more of these professionals began freelance careers. Instead of sitting in an office in New York reading through the slush pile, an editor could be sitting on the beach editing a story they really loved.

With that came Print on Demand. As readers still wanted physical books, Indie authors and small presses needed to provide them for them. But doing print runs of thousands of books was not only not economically feasible, but it was also wasteful. So some companies jumped into the industry, including Amazon and Lightning Source (now Ingram Spark).

Soon small and medium-sized presses latched on to this model too. Why? Well, the answers are simple, and they matter to authors and publishers everywhere.

Print on Demand is More Profitable

One of our goals here at Unbound Publishing is to be absolutely transparent about our process and our profits, and here are the simple facts: we can’t operate as a company for long unless we are profitable. That means that printing books must come with enough of a margin that we can cover our salaries and operating expenses.

This is a part of why print on demand is essential to both paths to publication that we offer: we don’t want to pay for a warehouse to store hundreds or thousands of books that may or may not sell. We don’t want authors to have to order literally hundreds of books to get a discount so they can sell them to friends or family, give them away, or just have some copies for events of their own.

All those things cost money that diminishes the profitability of the company overall, and in today’s world is completely unnecessary. Here’s how it breaks down:

  • We can do print runs for bookstores, events, pre-orders, and conferences of any size. We can drop ship orders direct from the printers, and never even touch the books.
  • We can larger print runs as needed, or smaller ones. We can avoid doing print runs at all. Either way, we eliminate the structure necessary for distribution, making our company leaner and able to offer authors more royalties and vendors larger discounts.
  • We’re not storing returns or bulk numbers of books. We don’t need a large storage area, just a small one to meet immediate demand. Our supply can be replenished quickly and as needed.

That’s how Print on Demand benefits us as a company, but what does that mean to those we do business with?

Print on Demand Gives Indie Bookstores Better Options

Yes, our books are available through standard channels like Ingram, Bowker, and in most cases the gorilla in the room, Amazon. But we, and bookstores, are not tied to them. Bookstores and others can order directly from us, get better discounts in some cases, and have the same benefits of ordering directly from Ingram.

However, we also understand how bookstores, libraries, and others might rather order through standard channels. It makes their accounting and invoicing simpler, and we respect that. Bookstores and publishers alike operate on slim margins, and we want to help our partners. We want the industry to be successful.

Print on Demand lets us offer bookstores and other partners more options when it comes to ordering and stocking books.

Print on Demand is Better for the Environment

So for some of you not in the publishing business, let me share something sad with you: do you know what happens to returned books? Well, if they are returned to the publisher, most of them are simply pulped and recycled. Good news? Sure, at least they are recycled, but all the shipping back and forth and even the pulping process take energy, fuel, and result in greenhouse emissions.

The solution? Don’t print books unless you need them. Fewer returns, less pulping, less waste, all things that are better for our planet. And if we do get books returned from bookstores?

Well, you could call those slightly used books. Then you can sell them for a small discount on Amazon, eBay, or other places, and someone still gets to read them. Other people will sell your books used too, so why wouldn’t you or your publisher?

Print on demand gives publishers and authors the ability to do what is best for the planet, offering products with less environmental impact. That’s good for everyone.

Print on Demand is Better for Authors

What about the authors of the books? Well, first of all, they have more ordering options, and can therefore save money when they order copies for themselves and events they might hold on their own.

Second, when publishers are more profitable, they can pass along those profits to authors in the form of royalties. This is what enables us to offer a graduated royalty system to authors: the more books they sell, the greater percentage of royalties they earn. Everyone can still make a profit, because we’ve eliminated the bloat of infrastructure related to legacy publishing and large print runs.

True, not all publishers pass along profits to the authors who are the backbone of their business, but that’s what sets us apart. We’re transparent about what it costs us to produce a book, the pay now or pay later nature of publishing, and the fact that for any kind of publishing to have a viable future, we need to lean into modern technology like print on demand to make sure it’s profitable for everyone.

Have questions? Have a story you are ready to publish or need help with ghostwriting services? Contact us using the form below. We’d love to chat about what’s next for you and your story, and how print on demand can be a part of your plan.

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