Penguin's New Direct Unit
by Jim Milliot -- Publishers Weekly, 7/19/2004
The creation of a new direct-selling unit, Family Books at home, by Penguin Group USA is meant to attract new customers without infringing on trade sales, said Penguin CEO David Shanks. Family Books at home was launched officially last month with the appointments of Len Edwards as president of direct selling and Bill Wardell as v-p, sales. Both men moved to Penguin from executive spots at Avon Products. Edwards will report to Shanks.
Shanks said the genesis of Family Books was the old Dorling Kindersley Family Learning group, which was shut down in 2000, just before DK was acquired by Penguin. DKFL had thousands of consultants and generated much revenue but lost money "because of horrible support systems," Shanks said. With improved back-office operations, Shanks said, "It's time to see if this can be a real marketing channel."
Edwards's team has begun recruiting sales consultants, and some former DKFL home reps have joined the new venture, Shanks said. The new unit will begin by offering about 200 titles, most drawn from the DK catalogue and many of which had been originally developed for the DKFL program. Consultants will earn a 25% commission on sales and a 5%–7% bonus on sales over $1,500 per month. Books will be sold at list price; to discourage discounting, consultants' commissions will be based on the full price of a book, Shanks said.
"I really don't think this will infringe on trade sales," Shanks said, noting that by targeting Family Books' titles to preschoolers and younger readers, the company is, in effect, "seeding the market. We need to do something to develop new readers. We can't sit still."
