The Book Industry Study Group devoted a large portion of its annual meeting held Monday to supply chain issues. Panelists representing different parts of the chain—publishing, distribution, rights/metadata/marketing, and retailing—generally agreed that the industry was working fairly efficiently, but that work needs to be done to keep pace with publishing’s ongoing changes.
One issue addressed at the event, held at the Harvard Club In New York City, was "channel conflict." Simon & Schuster’s executive v-p of sales and market, Michael Selleck explained the phenomenon by saying that it occurs when outside influences disrupt the sale channel. Examples of channel conflict include things like the illegally imported (and cheaper) textbooks in the international market, and used books in the domestic market.
The example of channel conflict that drew the most attention, though, was the new phenomenon of third party resellers being able to win buy buttons at Amazon, thereby being the first option consumers see. Because new books are supposed to be the first option for consumers on Amazon, publishers suspect the third party sellers winning buy buttons have somehow gotten their hands on new titles.
Brooke Warrner, publisher of SheWrites Press, sees this as a big problem for indie authors and publishers that is likely to get worse. Peter Berkery, executive director of the AAUP, said the issue is also a big concern for his members as it can cut into sales.
Selleck noted that S&S is monitoring the situation and trying to determine the source of supply for third party sellers winning buy buttons. He noted that Amazon "is not the culprit" in the situation; the problem is with companies (or individuals) abusing the system.
The shift to online retailing has been the biggest change in distribution over the last 10 years, Sabrina McCarthy, senior v-p at Perseus Distribution, said in kicking off the distribution panel. David Barker, senior v-p of distributor Readerlink, said that the move to online retailing, including the sale of e-books, has created the perception among some non-book retailers that print is dying. This perception, he noted, makes it harder to sell print titles to these outlets.
The move to online retailing has also given rise to problems with getting books to consumers quickly. The problem is particularly pronounced during the holiday season, panelists said, when there are long lines of trucks trying to get into Amazon warehouses.
One success story involving the supply chain has been a reduction in returns. Panelists agreed, though, that there is still room to cut returns even further. The sweet spot for returns is thought to be between 20-30%, a range that suggests a publisher has enough copies in the market, but has not flooded stores.
Cutting down on returns also came up on the retailing panel. Both Cy Fenton, CIO of Books-A-Million, and Jonah Zimiles, owner of indie Words Bookstore, said they would like to see returns continue to come down. Zimilies said he would like publishers to provide more data to booksellers so their ordering can be more informed. To that end, Zimiles explained, he would like benchmarks that could show “you are [selling] X, while others are [selling] Y" on a specific title.
Greater use of the Espresso Book Machine was also viewed by Fenton as a way to cut returns. He said the main stumbling block with BAM using the Espresso more is that there are not enough titles available on it from the major of trade houses. Fenton noted that BAM would increase the use of the Espresso if it could print more titles. He then pointedly asked publishers in attendance: “What’s the problem?”
During the business part of the meeting, executive director Brian O'Leary noted that the organization had a $65,000 surplus in the fiscal year endded June 30, up from a deficit of $29,000 last year. (In fiscal 2015, the organization had a loss of $239,000.) O'Leary said while the improved bottom line was largely due to cost cutting, he hopes to grow revenue in fiscal 2018 by 10.5% through events and, hopefully, an increase in sponsors.
The members approved a number of bylaw changes, including one that reduces the number of board members to 14. BISG also announced that it is moving its annual meeting next year from September to April.