Despite a few bugs, online booksellers are a growing and ever more significant market for small and medium-sized publishers.
Although many publishers and distributors can't fully quantify their sales to online booksellers-either because the booksellers buy many titles through wholesalers or mix orders with their bricks-and-mortar stores -- and although the base is small to begin with, small- and medium-sized publishers and their distributors agree that online business is increasing dramatically and will become ever more important in the next few years. As Barbara Grier, chief executive officer of Naiad Press, puts it: "In 10 years, it will absolutely be the thing."
At National Book Network, online bookselling may already be the thing. President Jed Lyons says, "That piece of the business is huge, came out of nowhere and is an enormous and growing part of our operation."
Certainly for many publishers, online sales are the single fastest-growing area of sales. Susan Conn, sales and marketing director of New York University Press, says that barnesandnoble.com's business with the press quadrupled in the past year, going from $23,000 a year ago, to $20,000 in the first quarter of the current fiscal year alone.
Consortium president Randall Beek estimates that the company's Net business for the first 11 months of 1998 rose to about $460,000, from about $135,000 in the same period in 1997.
Although some publishers complain about the way a few of the online booksellers do business, and a lack of sales data from them, others say that online booksellers have several crucial advantages over their traditional competitors.
The most important advantages: Online booksellers pay quickly. They return few, if any, books, and most buy nonreturnable. They buy frequently and in small amounts, allowing publishers to gauge demand better. They "democratize" the book market, particularly nonfiction titles, by making it easier for titles by small- and medium-sized publishers to compete against those from larger houses.
At the same time, some publishers caution that selling and marketing through online booksellers is not as simple or easy as one would initially assume. "We spend a lot of time and effort supporting them," Chuck Dresner, assistant director of sales, Harvard Business School Press, says.
Also, Amazon, which has an estimated 80% of the online bookselling market (barnesandnoble.com has another 10%), is relatively new to the book business, and although it wins points for paying quickly, returning few books and ordering frequently, its non-book culture irritates some of its suppliers. Barnesandnoble.com wins high praise for stocking many presses' full lines and seeking business ties with the publishers and distributors.
While Amazon and B&N.com are the biggest online bookselling accounts for most publishers and distributors, other significant accounts include Borders and books.com (the former BookStacks). Several anticipate making significant sales to Bertelsmann's BookOnline operation in Europe when it opens this year.
Unveiling Sales Data?
Some publishers and distributors say that one of their biggest gripes -- a lack of sales data -- is being cured in large part because of the purchase of Ingram Book Co. by Barnes &Noble. The purchase, announced in November, has spurred Amazon's already existing program to buy more titles directly from publishers and distributors. Sales through wholesalers like Ingram are often "untrackable."
Barnesandnoble.com, now half owned by Bertelsmann, already has been buying many books directly from publishers and distributors. (The bookseller devotes an entire 80,000-sq.-ft. warehouse to its online business, stocking two copies each of more than 500,000 titles, which accounts for its nickname, the Ark. More-popular titles come from its other warehouses.) In fact, B&N.com's direct purchases are so high that NBN sells six times as many books direct to barnesandnoble.com than it d s to Amazon. (In an amusing indicator of different approaches to new technology, one publisher observed that Amazon orders via e-mail while B&N.com orders via fax.)
Barnesandnoble.com, which has deeper roots in the book business than archrival Amazon.com, is credited with doing a good job of dealing with publishers and distributors. In particular, it seeks out publishers and tends to carry more of their titles than Amazon, which often buys books only when they're ordered by its customers. Barnesandnoble.com also has promised many publishers and distributors to provide the detailed sales reports they want.
Amazon is said to be working toward supplying the desired sales data, but as one person who calls on the company says, "The kids there don't understand the needs of publishers yet." For her part, Barbara Grier, CEO of Naiad Press, whose online sales "don't amount to more than 1% but are growing overwhelmingly," said she hoped Amazon "will accidentally hire some book people and learn how to do things more intelligently. None of these people are really book people."
While Robin Asbury at Summerhouse Press, Columbia, S.C., says that Amazon is "best when it links with specialized sites, like the Civil War," it has been difficult to try to market her press on Amazon "as a publisher."
Ellen Sullivan, head of Crane Hill Publishers, Birmingham, Ala., has found Amazon to be relatively passive, although representatives of the company did visit Crane Hill's booth at the BEA show last year, "wanting to make sure we knew who they were and were set up with them," as she puts it. "It was the first time they had spoken with us." Sullivan adds that Amazon seems "highly technology oriented, not content or marketing oriented. They could do so much on their site that they're not doing."
Most publishers with whom PW spoke reported that they offer the same terms to online booksellers as they do to other accounts. A few, who presumably have slower-moving titles, expressed distaste for a policy at Amazon of stocking some books only if the publisher offers a 55% discount, pays for the shipping and expects payment only after Amazon sells the book. If they don't agree to such terms, some of these small presses said, their titles are tagged on the Amazon site as being "available in six to eight weeks," which is, as one says, "the kiss of death to any sales." Another small feminist publisher says: "We've had trouble getting space in superstores. Now we're having the same trouble with online places."
Some distributors have found that major online accounts require as much attention as the major wholesalers. "We have to convey accurate and timely information about such things as forthcoming titles, changes in publication status, price changes, and more," NBN's Lyons says. "We're spending huge amounts of time." He says he would not be surprised if NBN will soon have full-time reps devoted solely to Amazon and to B&N.com.
Similarly, an Independent Publishers Group rep spends two or three days a week at Amazon. "You don't sell them books," IPG chief executive officer Curt Matthews says. "But they have to be serviced like crazy."
Several publishers called database accuracy a key concern. "There's a lot of inaccurate information on Web sites," NYU's Susan Conn says.
E-Marketing Efforts and Effects
Already online sales are beginning to affect how some publishers conduct business.
Many publishers provide material for websites. Harvard Business School Press has one of the more elaborate programs, providing "electronic promotion kits" for almost every book it publishes. Besides marketing copy, the kits, which are Web ready, usually contain the table of contents, a shot of the book's cover, interviews as well as questions and answers with the author. These kits are created for each book and sent to some 130 accounts, either on disks or via e-mail.
Another publisher simply sends the house's catalogue and covers, which Amazon and B&N.com scan at no cost -- yet. B&N.com is offering some ads and programs to link publishers' titles to other parts of the site with costs in the $250 range, though one publisher said the company was "soft-selling" them.There is no hard and fast indicator for which books sell best online, but generally nonfiction fares better than fiction, if only because key searches make it possible to focus on subjects.
Online bookselling is "fabulous for independent publishers with niche books," IPG's Matthews says. Moreover, he continues, Web bookselling "should be wonderful for publishers with an emphasis on backlist. They will stay alive a lot longer."
NYU's Susan Conn says that online bookselling "has given a boost to a lot of scholarly titles that don't often make it into bookstores."
Many small- and medium-sized publishers praise online bookselling for putting them "on a more equal footing with the big guys," as Virginia Messer of Eakin Press, Austin, Tex., says. "People don't really care about who publishes a book. They care only about what the book's about and whether it's good or not."
The Harvard Business School Press has found an eager market in the world of online bookselling because it publishes so many titles on digital culture, digital commerce, digital strategy and leading-edge management, according to Chuck Dresner.
Likewise, National Book Network has found that the people who "actively buy books on the Internet tend to be interested in the kinds of books we publish: specialized, scholarly reference books," says president Jed Lyons. He characterized the average Web book buyer as "highly educated, affluent and professional."
Book Revival
The effect of online bookselling on publishing can be profound. Several publishers and distributors reported the phenomenon of a book or series with minimal or no sales being revived by online interest. At NBN, for example, a series of "dictionaries" of countries around the world has begun selling because of key word searches.
Because so many people search for books online via keywords, National Book Network has changed how it devises titles. "Our titles are not necessarily getting longer, but they're getting more descriptive and maybe less p tic," Jed Lyons said. "Every word counts, so we don't want a bunch of meaningless words. People and places matter more."
Indies on the Horizon?
Independent booksellers account for a tiny portion of online book sales. Still, some publishers and distributors said that independents are beginning to find their way. Although setting up a Web site for commerce has proved more expensive and time-consuming than some booksellers anticipated, the costs for maintenance are shrinking and, as Dresner says, "some are becoming quite innovative."
Most publishers and distributors say it is still difficult to gauge independents' online sales because the books destined for online sales are combined with books that go to the bricks-and-mortar stores.
Wave of the Future
Many publishers and distributors are convinced that online bookselling will only grow in importance. Or as Barbara Grier of Naiad observes with a sardonic touch, "We're a society that has been working hard to stop having direct contact with other living beings, so it looks like this will continue us in that direction."
IPG's Matthews says that online bookselling "is excellent for books in the abstract. It will keep the good books around longer and kill the bad ones quicker." Online bookselling has a different dynamic from stores, he observes. Bookstores focus on what's new, while on the Internet there's more of an emphasis on what's good. Stores still have a place, mainly because those customers who don't know exactly what they want need to browse.
Despite all its appeals, advantages and its tremendous growth potential, online bookselling will not take over the world of bookselling, Matthews predicts. "We can be certain of two things," he says. "The Internet is grossly oversold at the moment, and it will take a lot longer to happen than anyone thinks."
Maybe six months instead of three...
