With consolidation in the book industry, large publishers aggressively seeking clients for their distribution services, fewer independent bookstores and increased overhead, these are challenging times for commission rep groups.
Although many reps call on wholesalers and chains, the fate of a number of groups is linked with that of independent booksellers. "If the independent bookstore disappeared tomorrow, so would commission reps," predicted 40-year veteran Ted Heinecken of Heinecken & Associates, adding, "some house reps and telephone sales departments would also disappear. I would say it's a very tough climate right now for commission reps."
Heinecken, whose group handles secondary coverage in the Midwest for Houghton Mifflin, Harcourt and Meredith, calls on small and out-of-the way independents. One of the long-simmering problems he and other reps face is getting paid for sales fulfilled by wholesalers. Independent reps earn commissions on sales through Ingram (at a reduced rate of their normal commission on a direct sale), and rep groups are trying to work a similar deal on sales through Baker & Taylor as more indie stores look to B&T to source books. Some publishers are balking, however, at offering any commission, while others said they can't get detailed reporting to make a commission possible.
At the same time, reps have been losing accounts either through the decline in the number of smaller stores or because most college stores are now operated by Follett or by Barnes & Noble college division. New Hampshire—based independent rep Nanci McCrackin, one of a handful of reps who works solo, has a fuller bag than ever, 10 publishers. But with the loss of regional chains like Lauriats as well as the Yale Co-op and Harvard Coop, one of her biggest challenges, she said, "is making as much money as I used to. I don't think I ever will."
In addition, according to one commission rep who preferred to speak off the record, "in the last few years publishers are looking at all their customers more closely and they'll occasionally pluck a big bookstore or museum away from a commission rep. Publishers will reduce the commission and say the rep is lucky to have that line or [they] will manage the line in-house."
Nor are commission reps immune from changes in publishing. When Watson-Guptill moved its sales and fulfillment to Holtzbrinck, Frank Moster of Melman-Moster Associates, which covers the Mid-Atlantic and New England states, lost his biggest client. After more than 40 years in the business, he decided to join forces with the Rovers Group. "It's a way I can keep going and reduce my overhead," said Moster. "I do think there is a good future for commission reps. But there may be fewer rep organizations."
Currently there are 300 members of the National Association of Independent Publishers Representatives, about the same number as when the group began in the late 1980s, according to executive director Paul Williams. Despite some problems, "Rep groups are not imperiled in the least," insisted Williams. He noted that commission reps provide publishers with an important service—relatively inexpensive coverage of accounts. While it may cost $100,000 to keep a house rep on the road, commissioned reps are only reimbursed for sales. "You get what you pay for," observed Williams. Expenses are their own problem, which is why Chris Kerr of Parson Weems, who puts 1,000 miles a week on his car, stays at a $54-a-night "hot sheet" hotel in Natick when he's in Boston. That's also why larger rep groups represent as many as 25 to 40 publishers.
For smaller presses like University Press of New England, commission reps are essential. "They're extensions of us," said sales manager Sherri Strickland. In addition to calling on a variety of retailers, from toy stores to "adult" superstores, commission reps visit accounts who have been moved to telephone sales by large publishers. For Michael Sullivan, v-p of sales at NBN, where commission reps account for 8% of the sales, that's reason enough for hiring commission reps. "They wave the flag at accounts a publisher or distributor can't afford to get to," he said.
While Parson Weems had its best year in 2006 and is on track for another good year in 2007, Tom Murphy (PWRep of the Year in 1997), of George Scheer Associates, which covers Texas to Virginia, had a great 2005 but found last year tough. The business, said Murphy, is cyclical in nature, and his firm has countered the loss of independent stores by calling on national accounts in his territory. What keeps Murphy and his colleagues on the road is simple: "They pay me to go into bookstores."
Now what could be wrong with that?
