Publishing- accepting returns

Whether to accept returns is a huge decision each publisher must make. This single choice can and will affect the direction of a business by influencing sales and thus net profits. A run of returns can be the difference between bankruptcy and taking the family vacationing in Hawaii.

For those of you unfamiliar with the publishing process, let me explain. Publishing companies solicit manuscripts from the author, process them into book format and handle sales and marketing. Wholesale companies and distributors purchase books from the publishing companies and distribute these books out into libraries, bookstores, etc. This is a rather simplistic explanation for a complicated process, but you get the idea.

Publishing companies are given the choice whether to accept returns from the wholesalers, distributors and bookstores. Returns are the unsold books purchased by the wholesaler, distributed out to the bookstores and which did not sale. This means that if the wholesaler or distributor orders xxx amount of books and the publisher has xxx amount of books printed up and shipped to the wholesaler who distributes them out to the stores, but only x amount actually sales, than the remaining xx amount is going to, you guessed it, come back to the publisher.

If the returned books total is relatively small, the publishing company can absorb the loss of the cost of the print run, but a large number of returns on one book, or a smaller number of returns on several books, can quickly put a company in the red. This would be a controllable situation if books were printed up in small amounts based on sales. However, traditionally book printing has relied on use of the offset printer, a method that involves an expensive, time-consuming set-up, but a low cost-per-book print run. Using this approach, the publisher prints the maximum possible, saturates the market and waits with fingers crossed for the onslaught of returns.

In today's world of rising cost, where a company is judged by its stock merit and stocks seem to rise and fall with the blow of the wind, even the big boys shudder at the thoughts of large returns, decreased profits and irate stockholders. This leads to a new business model, the "play it safe, go with the tried and true, don't rock the boat, and definitely don't gamble on anything new, radical, or different." In a field based on creativity and diversity, this is a sure approach to shrivel and die.

For small or self-publishers, the decision of accepting returns is a ludicrous choice. As a method of doing business, it just doesn't make good common sense, yet stores and wholesalers often refuse to carry a book from a publisher who will not accept returns. This places the publisher in the position of accepting returns and potentially increasing sales and hoping the returns don't bankrupt the company, or refusing returns and be blacklisted. It is a dilemma.

The logical solution to this problem is to refuse or limit returns (if enough publishers employ this practice, it will become standard); utilize the offset printing method for large, guaranteed orders; and for all other situations choose the print-on-demand demand printing system (I recommend Lightening Source www.lightningsource.com/index.htm) where books are printed per order. This is a cost-effective method ensuring control of the flow of orders, distribution and returns. Only by controlling and reducing returns will a company be able to grow and be competitive in a global market.