The publishing business is on the brink of making a catastrophic mistake. No, this isn't about e-books or returns or high advances. It's about data.

I'll explain: until recently, publishers and distributors imagined that their sales were the books they shipped to their customers. This was never accurate, but it was the best we could do. We had little idea what was selling through at the stores until reorders—or returns—showed up. The advent of BookScan was a major step forward, but what has really changed is that the major booksellers and wholesalers now share extremely detailed sales information with publishers and distributors.

For instance, at IPG, we now have sell-through and stock information from the seven biggest customers for every one of our 45,000 titles. We now know what percentage of the books we shipped to each customer actually sold at each store or distribution center each week, and we have constructed formulas that anticipate reorders and returns with amazing accuracy. It's a huge improvement in efficiency. IPG can now help its publishers plan the timing and quantities of their reprints far more accurately. And for booksellers, it means fast-moving titles stay in stock. For the book business in general, this information can mean lower costs and better availability. Another important data-sharing advance is that we can easily provide booksellers with comparative analysis: “Here is a list of titles that you don't stock, but that your competitors are selling like crazy. Wouldn't you like to stock a few copies?”

So the current situation is something like this: essential information is going both ways. Booksellers send publishers and distributors their sell-through data; publishers and distributors send booksellers comprehensive title information and comparative analysis. But here's the bad news: the major booksellers and wholesalers insist on selling their information to publishers and distributors—and expect to get information from us for free.

To add insult to injury, booksellers and wholesalers are not only charging us for information, they're also sneakily adding other charges onto our bill.

Many major booksellers have begun charging for violations of their elaborate and idiosyncratic shipping and data requirements—such as a label going on the side of the carton instead of, say, the top or the bottom. The excuse for these charges is that publishers and wholesalers won't fix their bad habits without being beaten with a financial stick.

If we are going to play the chargeback game, why shouldn't publishers and distributors charge booksellers for incompetently packed returns and the sloppy paperwork that generally accompanies them? We provide Advance Shipping Notice (ASN) to the big players. Do they provide Advance Returns Notice to us? No. (Sometimes we get a useless spreadsheet.) Often the data they send to us is dirty. Should we charge them back when we have to clean it up, the way they are starting to charge us for sending us the data?

Data goes bad at about the same speed as mayonnaise in the sunshine. However, data that is freely shared can be kept accurate quite efficiently: I periodically run my data up against yours and the problems jump out so they can be fixed. You do likewise. It doesn't matter who made the mistake. Everyone makes mistakes. All that matters is that the mistakes get fixed before they can do much damage.

Most of the IT professionals in the book business understand that information must be a two-way street, and they're eager to share data when they are allowed to. The problem lies with top management—they need to discard some highly dysfunctional ideas. We need to get out of the way of this revolution.

Author Information
Curt Matthews is CEO of Independent Publishers Group, an Amazon Books Distributor of the Year.