More news about the new HarperCollins plan to market 'non-returnable' books. (Article below.....)

First of all, it looks like it will be an 'imprint' of HarperCollins, so they won't be risking their core business.

Secondly, that 30 to 40% return rate is interesting. I know that in 2005, it was around 33%, so the 40% rate wouldn't surprise me in the slightest. I have a habit, when given a range, of picking the lowest of the positive estimates, and the highest of the lowest estimates. Seems to work.

Most mass market stores, like Walmart and Costgo, are probably returning 100% of the unsold books. But independent bookstores -- I believe -- are allowed about 10% return privileges. B & N and Borders probably also get close to 100% returns; which is one of the unfair things that makes it hard to compete with them.

Obviously, this isn't working so well for the publishers. They chose to give favored treatment to the big stores, driving the indy's from 7500 stores a few years ago, to a little over 3000 today.

In my own case, perhaps because I've been trained in the 'non-returnable' world of comics, I simply don't order books that I don't intend to keep or sell. The numbers just aren't big enough for the effort and hassle and expense of returning only 10% of the books.

So, who's this going to help, if it becomes the new paradigm?

For independent bookstores who truly get the shift, it probably will be an overall plus. Publishers, if they aren't printing insane overruns to fill the big stores and paying them to fill the endcaps, will be able to come closer to real numbers. Independent bookstores probably got very little of that promotional money. Without the huge advances, publishers will be able to also print closer to real numbers, thus not needing to fill the big stores with stacks and stacks of books. They won't be so dependent on the big chainstores to make their profits.

Since Indy's have never been able to return the majority of their product, this change will affect them less.

I still think that many of the old mainline indy's don't get the brave new world. They think if they have a website, they're modern. They think that having signings and readings and all the rest is the answer; and they probably help, but ultimately, if their base business of selling books to people hasn't changed, they are going extinct.

This will be interesting; in the past, the mass market has punished any publisher that even broached the idea of non-returnable. In effect, HarperCollins is throwing in their lot with the Internet, and telling Borders to take a hike.

I've written my prescription for independents elsewhere. But, if I had to guess, I think the new changes are going to help/hurt in this order: 1.) The internet. 2.) Independent bookstores. 3.) Big chain bookstores. 4.) The mass market.



ICV2.com

Harper Wants to Change the Paradigm
With New Non-Returnable Imprint
April 03, 2008

The Wall Street Journal is reporting that HarperCollins is launching a new imprint that will attempt to change long established practices in the publishing industry. Hyperion Books President Robert Miller is leaving his post on April 15th to take over the as-yet-unnamed HarperCollins imprint, which will no longer sell books on a returnable basis, reversing a policy that has held sway in the bookstore market since the depression in the 1930s. According to the WSJ between 30% and 40% of all consumer books sent to bookstores are returned to publishers, a practice that is extremely wasteful in both production and transportation costs for publishers.



Attempts to end the returnable system have been made in the past, most notably by Harcourt, Brace Jovanovich in 1980, but HBJ quickly abandoned the policy when bookstores retaliated by cutting their orders. Why does HarperCollins think it can get away with selling non-returnable now -- the new imprint plans to "focus much of its sales efforts on the Internet" where logistics make its non-returnable policies easier to implement.



In addition to selling non-returnable the new imprint won't be paying for prime display space in the front of bookstores either, instead it will focus its marketing efforts on the Net.



HarperCollins plans to revolutionize the way in which books are acquired as well as the ways in which they are sold. The new imprint will eschew advances to authors in favor of a beefed-up profit sharing plan for authors. Advances to authors can have a catastrophic effect on a publisher's bottom line if, as all too often happens, a high profile book bombs.



Why attempt such radical surgery on traditional business practices? Just about all phases of the publishing industry are under financial pressure and there is a real need to make the entire system more efficient. It is not just publishers who are stressed -- booksellers are also under pressure -- witness Borders' decision to put itself up for sale (see "Credit Crunch Hits Borders" and "Tough Retail Environment for Booksellers"). The problem is that, although it is obvious that what HarperCollins' new imprint wants to do could help publishers, it is difficult to see how these changes will help booksellers, at least those of the brick-and-mortar variety.