Distribution: So Many Books, So Many Choices

Distributors see opportunity despite challenges from larger rivals

by Judith Rosen & Jim Milliot -- Publishers Weekly, 5/15/2006

With several major publishers—led by Random House—reentering the distribution business and the launch of several new companies—including Ingram Publisher Services—publishers looking for a distributor have more choices than ever.

But despite the new competition from well-financed rivals, independent distributors say they still turn away many more clients than they accept, as the proliferation of small publishers increases demand for their services.

Mark Suchomel, president of Independent Publishers Group estimates that IPG takes on only about 2% of the publishers who approach the company, while Midpoint Trade Books president Eric Kampmann says that even though his firm is looking to expand, Midpoint still accepts only about 10% of the publishers it reviews. "We want publishers that can be successful at big accounts such as the bookstore chains," Kampmann says. Publishers Group West head Rich Freese also says his company accepts relatively few new publishers each year. "We are looking for publishers that we feel are underleveraged in the market," Freese says. National Book Network president Jed Lyons adds that while he's not looking to grow beyond his current roster of 90 clients, he will add publishers that have the potential to break out in the market.

While they say they can be choosy, distributors also know they have to work to attract and keep desirable clients. Niche-oriented distributors like D.A.P. (art) and Diamond Book (pop culture) distinguish themselves by specializing in certain markets. Distributors are also looking for ways to tap into new retail channels. "It's a tough marketplace. You've got to look every place you can to sell books," Steve Black, head of client services for CDS, says. "The trade market is solid, but pretty unexciting," agrees Freese. "The big growth in the business is coming from alternative markets."

Each independent distributor offers a different mix of strengths and services. And with many having decades of experience, they may even be able to teach something to the publisher-owned newcomers to the game.

10 Tips for Finding the Right Distributor

There is no one-size-fits-all when it comes to distribution by indie companies or by the client services departments of major houses. The key, says Trafalgar Square managing director Paul Feldstein, is to understand what you're getting into before you get into it. Below are some tips from Feldstein and others familiar with the distribution game.

Meet the principals of the distributor before you sign. Make sure that you can work together.
Talk to the distributor's clients as well as their customers to get a fuller picture of what they do.
Be clear about which markets a distributor sells to, and how they reach them.
Ask for details about what they do to publicize, promote and market their books, including how many review copies they send out.
Find out what kind of reporting the distributor offers.
Review the distributor's client lists to see if your company will fit.
Make sure the distributor understands your business and can help it grow.
Ask about economies that the distributor offers in all areas, from shipping to trade shows.
Compare agreements among distributors carefully, not just commission percentages. Agreements vary, and extra charges can add several percentage points.
Some presses are so happy to have a distributor interested in them that they forget to weigh the costs. Read the agreement thoroughly to make sure you understand all the charges.

And once you do sign, counsels Dark Horse's Michael Martens, "stay in close touch with your distributor and establish direct relationships with the buyers at the top retail and wholesale organizations." —J.R.

SCB

SCB president Aaron Silverman says the biggest change in the year has come from the expansion of its direct business with Amazon.com and the contraction of its business with Borders. "The other large change for us," says Silverman, "is the increase in sales of overseas publishers in North America. This is making it more important for us to go to book shows in London and Frankfurt." SCB publishes several specialized catalogues for niche audiences: Ascent for New Age stores, Revel for the adult industry and an as-yet-unnamed catalogue that will go out later this year to museums shops and galleries. Since hiring a national gift rep group last year, Silverman has seen only modest sales increases, but, he says, it is growing fast.

Client Comment: "SCB seemed like a strong fit for a few reasons. One was proximity. I'm based in Los Angeles, and there's something to be said for the fact that their warehouse is local and the the people are local."

—Bob Self, president, Baby Tattoo Books, who recently re-upped with SCB

Founded: 1989
Office and 30,000-sq.-ft. warehouse in Gardena, Calif.
120 distribution clients
Web site: www.scbdistributors.com

Bookworld Trade Inc.

After a second failed experiment several years ago using a commission rep group, Bookworld decided to reorganize and put more money into its sales organization, said president Ronald Ted Smith. Bookworld charges its publishers slightly higher fees than other distributors—about 1% more, because, says Smith, of its 16-person in-house sales force. The rep group represents all three Bookworld companies—Trade, Music and Christian. Bookworld's strongest categories are health, crafts, New Age and Spanish-language. Large publishers such as Simon & Schuster, HarperCollins, Houghton Mifflin and Wiley contract with Bookworld to reach special market segments.

Client Comment: "The people I deal with have been attentive to my needs. There's no way I could be able to employ my own sales force, and they have a good one. And they're prompt with the checks."

—Dale Carlson, founder, Bick Publishing House

Founded: 1962
Office: Sarasota, Fla.
Warehouse: La Vergne, Tenn., houses 1.5 million books
150 distribution clients
Web site: www.bookworld.com

National Book Network

NBN's ability to provide sales and marketing advice to its clients is the company's distinguishing characteristic, says president Jed Lyons. The company will work with clients on everything from cover design to promotional copy. NBN has an in-house sales force of 16, 12 of whom call on the book trade, while four sell to such nontraditional channels as national specialty retailers and big-box accounts, as well as independent distributors. Commissioned groups call on smaller outlets in alternative markets. "We had 40 reps at our last sales conference," Lyons notes. Through National Book Network international, NBN offers distribution to much of the English-speaking world.

Client Comment: "NBN delivers on the sales side on both the frontlist and backlist. We get great shelf space for our frontlist and they never give up on backlist. On the financial side, I've been with them for 15 years and have never got a late check. And they are just great folks to do business with."

—Ray Bard, president, Bard Books

Founded: 1986
Offices: Lanham, Md.; New York; Toronto; Chicago; Boulder, Colo.
Warehouses: 300,000-sq.-ft. in Blue Ridge Summit, Pa.; 55,000-sq.-ft. in the U.K.
90 distribution clients
Web site: www.nbnbooks.com

Distributed Art Publishers

One of the things that makes D.A.P. unusual is its focus on a specific niche: art and culture. "Because D.A.P. represents so many museums and art book publishers, we provide one-stop shopping for our customers," says executive director Sharon Gallagher, who stresses that while D.A.P. is part of the publishing community, it is also an integral part of the art world. Although D.A.P. does some publishing, many of its books are intended to fill a gap. In addition, D.A.P. will assume financial risk on some projects by copublishing with a museum or other client. After a difficult 2005, during which D.A.P. was forced to move its warehouse twice, executive director Sharon Gallagher anticipates growth of between 12% and 15% in 2006.

Client Comment: "The thing about D.A.P. for us is that they're in our business. It's like having another marketing capability. They do only art books, and they know absolutely what we're talking about. We switched to D.A.P. last July, and they're meeting their ambitious goals. We're up 40% over this quarter last year."

—Ellen Harris, executive director, Aperture

Founded: 1990
Offices: New York City and Los Angeles
Warehousing and fulfillment through CDS
200 distribution clients
Web site: www.artbook.com

Publishers Group West

PGW has 43 sales and support staff that form the heart of its operation, says president Rich Freese. The company has created two units—PG Kids and PG Travel—that specialize in selling books in those areas, and has recently added four people in its special markets group, which calls on national accounts for the big-box retailers and major mass merchandisers. A commissioned force calls on smaller stores outside the traditional bookstore market. Through Publishers Group Worldwide, PGW offers sales in the U.K., Australia and Singapore. It also sells into accounts in Canada and Mexico.

Client Comment:"PGW has a culture of being very interested in the success of its client publishers. They work closely with their client publishers to make sure their books and list are successful."

—Steve Piersanti, president, Berrett-Koehler Publishers

Founded: 1976
Offices: Berkeley, Calif.; New York
Warehouse in Indianapolis, 450,000 sq. ft.
100 distribution clients
Web site: www.pgw.com

Midpoint Trade Books

Midpoint's five-person in-house sales team calls on all major trade book accounts, and the company generates the majority of its sales from about 25 accounts. It biggest customer is Barnes & Noble, but sales through Amazon were the fastest growing in 2005. The company focuses its sales effort on the traditional book trade; sales to alternative outlets represent only a small portion of sales. Midpoint currently has about 300 clients, but president Eric Kampmann says his firm could handle as many as 500 publishers. He's not reticent about taking on one-book publishers. "We've had some great one book clients," he notes. But Midpoint will weed out publishers whose books have stopped selling.

Client comment: "Midpoint makes sure our books are in retailers in time for our current-event-focused titles to be able to take advantage of publicity. Our books need to be at stores from day one, and Midpoint has delivered."

—Eric Jackson, president, World Ahead Publications

Founded: 1996
Offices: New York City and four states
Warehouse 70,000-sq.-ft.
300 clients
Web site: www.midpointtrade.com

Trafalgar Square Books

While other distributors are taking on more clients from the other side of the pond, Trafalgar Square is the only one that specializes in U.K. publishers, including the U.K. division of major U.S. houses like Hachette Books UK, Simon & Schuster UK, Random House UK and HarperCollins US, as well as BBC Books and Hodder Headline. Managing director Paul Feldstein notes, "Being a nonconsignment distributor makes us relatively unique, and it's one of the reasons why U.K. publishers like us. They don't have to worry about returns."

Client Comment: "A route into the U.S. market for any of our titles without a U.S. pubisher is an important part of our export sales and it is key that these authors' titles are made available as widely as possible to the largest English speaking market in the world. The way in which Trafalgar Square offer these books to market is incredibly important—and they do a lot more than just make titles available. They actively market, promote and sell these titles to as many market channels as possible."

—Richard Kitson, deputy COO, Little, Brown UK

Founded: 1973
Headquarters: North Pomfret, Vt., and an office in Boston
Two warehouses
50 distribution clients
Web site: www.trafalgarsquarebooks.com

Consortium Book Sales & Distribution

Consortium distributes exclusively in the U.S. and Canada and has a strong presence in trade, library and academic markets. It is in the midst of expanding into the gift and specialty markets, and chairman Donn Linn expects to complete hiring sales reps to service these markets by the end of the year. "We feel we've created a community of like-minded publishers and staff, dedicated to the proposition that independent presses are important and that what they publish deserves broad exposure," says Linn, who likens Consortium to "a boutique in a world of supermarkets." Its hallmarks are personal service and efficiency.

Client Comment: "They're really responsive. As one of their publishers, I have a direct line to all their department heads. When we have a complaint, they hear it and either address it or explain why it can't be addressed. Under Don Linn's leadership, as well as Julie Schaper's, they've really been able to strengthen the company. They've ramped up their systems in the past two years and they have a reality-based approach to distribution."

—Johnny Temple, publisher, Akashic Books

Founded: 1985
Offices: St. Paul, Minn.; London, England
Warehouse 75,000-sq.-ft. in St. Paul
102 distribution clients; one fulfillment client
Web site: www.cbsd.com

CDS

CDS head of client services Steve Black readily admits that the company is a bit of a hybrid. While the company serves as the distributor for its parent company, Perseus Books, it also will handle sales and/or fulfillment for small publishers. "We can handle big clients, small clients and all niches in between," Black says. With three warehouses, Black says CDS has virtually "unlimited capacity," enabling it to take on large clients. The company has an in-house sales force of 25 and a commission group of about 125 that calls on both the book trade and special markets, with a particular strength in the gift area. Black says CDS is eager to add more clients. "We're looking for any company that can grow," he says.

Client Comment: "CDS gives us the benefit of strong access to all key accounts without the need to maintain our own sales force. I feel like when I work with them, I'm working with our own sales force."

—Todd Berman, U.S. sales manager, Harvard Business School Press

Founded: 1999
Offices: New York City; Jackson, Tenn.
Warehouses: three
50 distribution clients, five fulfillment clients
Web site: www.cdsbooks.com

Diamond Book Distributors

Diamond Book Distributors is a relatively new division of 24-year-old powerhouse Diamond Comics, the only dedicated worldwide distributor of manga, graphic novels, SF and pop-culture merchandise. For v-p of sales and marketing Kuo-Yu Liang, who started Diamond Books, what differentiates it from the rest of Diamond is a separate sales force and ISBNs. All divisions sell the same inventory out of one big warehouse.

Diamond recently moved into the gift market in a big way, with a sales force of more than 144 commission reps. Next up in the U.S. is the CBA market, although Liang sees the biggest growth potential overseas, where Starbucks and Wal-Mart are also focusing their efforts. Currently Diamond ships to 52 countries and recently added a rep group in Canada. It is also looking to hire rep groups in Australia and Asia.

Client Comment: "We have had a long and productive relationship with their parent company, Diamond Comic Distributors (DCD), in the servicing of the direct market comic-specialty shops. In this market, product knowledge is of extreme importance due to the unique nature of both the products and retail outliets. When DCD established DBD they went out and hired staffers on all levels who had extensive book market experience as well as exposure to publications and products that appeal to our core customers. This willingness to bring in people with new skills, give them some latitude and blend them with a back-office experienced with our books gave us the confidence to sign the contract with DBD."

—Michael Martens, v-p of business development, Dark Horse Comics

Founded: 2002
Offices: Timonium, Md.; London, England
Warehouses: over one million sq. ft. combined for three U.S. warehouses (in Los Angeles; Memphis, Tenn.; and Plattsburg, N.Y.) and one in the U.K.
Nearly 50 distribution clients
Web site: www.diamondbookdistributors.com

Independent Publishers Group

IPG sells to as many different accounts as possible while keeping returns low, about 20%. "Our sales outside the trade are tremendous," says president Mark Suchomel. "And we happily pursue accounts that might sell only one title. We know that we have to do some things that are not profitable to us in the short term, but will help our publishers thrive and do more books in the long term." IPG already covers the teacher-supply market, museum stores and specialty retail and wholesale accounts, and it is about to enter the gift market with its first gift catalogue, due out later this spring.

Client Comment: "I think the world of IPG. They picked us up on the basis of a business plan and they've delivered for us. They can lay down quite a few copies of the right book. They just laid down 20,000 copies of the paperback of The China Study. One of the things I like about them is their long-term point of view. They get it that if we do well, they'll do well."

—Glenn Yeffeth, publisher, BenBella Books

Founded: 1971
Main office: Chicago; foreign rights and book club office in Massachusetts
A distribution center just outside Chicago with six-million-unit capacity
50 general trade distribution clients (400 counting computer, professional, academic and Small Press Selection clients)
Web site: www.ipgbook.com