Despite the lip service paid by both booksellers and publishers in support of co-op advertising's original intent -- to enable them to work together to sell more books -- it sometimes seems as if co-op is only about money. From independents that charge as much as $500 for a window display to chain superstores that sell premier holiday catalogue space for mid-five or even low six figures to online retailers that bill anywhere from several hundred to several thousand dollars for virtual endcaps, co-op often seems more like a profit center than a promotional tool.

Conversely, publishers' co-op policies, which can range from a few paragraphs to inches-thick ring binders, often seem intentionally abstruse. It is also difficult for booksellers to find out from publishers how much co-op they have. Only a handful automatically notify accounts as to the size of their pool(s). For most small and midsize independents, despite how generous some publishers' policies have become, there is still never enough co-op to cover store basics -- printing and mailing newsletters or promoting author appearances.

No matter which category booksellers fall into -- those determined to spend every penny or those who say co-op's not worth the bother -- the mere mention of the term can make eyes glaze over. Not only are many publishers' policies complicated to fulfill but their verification requirements can be onerous, even for retailers as large as Still more frustrating, according to those interviewed for this article, is the waiting period between retailers' invoices and payments -- typically 90 days or more, with follow-up calls. Timely crediting is far from an industry standard.

Publishers as well as booksellers complain that co-op is time-consuming to administer. On the publishing side, there's also the sheer expense. Some publishers admitted privately that they would go broke if every bookseller demanded to use all their co-op money. Then, too, there is the adversarial aspect of co-op. After two decades of lawsuits, most publishers would prefer not to talk about co-op at all; publishers of varying sizes declined to be interviewed for this story or did not return calls. Their reticence, no doubt, was prompted in part by the Federal Trade Commission's 17-year antitrust discrimination case, which was dropped in September 1996. When that bogged down, the ABA stepped into the fray by suing publishers directly, beginning in May 1994.

Nor have Barnes & Noble or Borders been immune from litigation. In a suit filed in California last year (News, Mar. 23, 1998), the ABA and 25 independent bookstores charged the two major chains with harming their business by making special deals with publishers for better terms, including co-op payments in excess of actual advertising.

Where d s the litigious yet symbiotic relationship between booksellers and publishers leave co-op? How has publishers' receptivity to a broader range of co-op uses -- from a blood drive to promote Anne Rice's vampire books to providing tote bags for an academic conference-affected book sales? And how has the exponential growth of Internet retailing changed the co-op equation?

Use It or Lose It

Few booksellers share the determination and enthusiasm of Jean Huyler, manager/special events coordinator for the Book Stall at Chestnut Court in Winnetka, Ill. Explaining her moniker, "Jean, Jean, the Co-op Queen," Huyler said, "I decided if I was going to take this horrible job, I'd have to do something so people would remember me."

Huyler uses co-op for author events, displays and newsletters, occasionally determining which titles to promote according to its availability. "Sometimes in the newsletter," she acknowledged, "I am influenced by co-op, and, of course, I enter every display contest there is."

Huyler added, "Co-op takes a lot of work -- it's a lot of paper and a lot of calling and Xeroxing everything." Despite this, many relatively small stores and niche retailers have climbed on the co-op bandwagon. Barb Wieser, manager of the 29-year-old Amazon Bookstore in Minneapolis, Minn., the oldest women's bookstore in the country, continues to use co-op as much as possible. "Mostly," she explained, "we use it to advertise author events and to put books in the newsletter. We don't always use it, because we just don't get it together. We don't have a very big staff." She has found that without reps, it's even harder to put together a co-op program. "We're having fewer and fewer reps," said Wieser, "and we used to count on them. We haven't had a Random House rep for two or three years. Our BDD rep just got fired, and the Penguin rep left. So it's difficult."

Similarly, Dan Chartrand, co-owner of Water Street Bookstore in Exeter, N.H., added, "We'd love to be more sophisticated in using our co-op." Water Street's store manager/promotions coordinator, Susan Gilbert, noted, "Publishers do have the money and want to promote the books, so it behooves us to use it. We've used it in the past to help pay for newsletters, but the majority is for author events, usually newspaper ads, occasionally on National Public Radio, and to defray the cost of mailings."

Over the last few years, Water Street, which hosts 10-12 events a year, has come to rely on co-op so much that it seldom schedules an appearance unless co-op is available. "We only do an author who's local if we can't get co-op," remarked Chartrand.

For Anne Ginkle, co-owner/manager of Hobbit Hall, in the historic district of Roswell, Ga., a suburb of Atlanta, events are the name of the game when it comes to co-op -- and survival. "Atlanta has 15 Barnes & Noble stores, and we're also competing with the Internet," commented Ginkle. She prefers not to spend her co-op dollars on displays. For her, "to assign staff to make a display and take a picture is almost not worth it. Co-op can be very difficult to chase, and the time needed is expensive."

Instead, Ginkle revamped her newsletter, which is mailed monthly to 8000 customers, to promote her events. Like Wieser at Amazon, Ginkle depends on her reps for help. "I have a greater tendency to do programs around books where I have reps that say, 'I'll get co-op for you for this.' "

Most of Hobbit Hall's programs are tied to new books. "As I'm buying, I always keep my eye out for a program," said Ginkle. Well aware that Star Wars would be everywhere this summer, Ginkle devised a rocket ship laboratory to bring Star Wars fans to her store.

At Cabbages & Kings Bookstore in Chatham, Mass., on Cape Cod, co-owner Bess Moye acknowledged, "We let our pools go by. But I'm sure we're not alone." With a tiny staff, co-op was often one area that she relegated to the back burner -- until last fall when her former HarperCollins rep, Barbara Trainer, literally showed her how much money she had lost. Trainer, who has since retired from consulting, was one of a new breed of co-op advisers who are starting to spring up around the country to help stores manage their promotional advertising funds. "She was great," Moye enthused. "She got us going. What she did was write a letter to all the publishers and ask what our pool was." Trainer used that information to design a customized co-op spreadsheet and billing system for the store. Even so, Moye still found that she had to scramble to get invoices in on time and to pay for store promotions. Also, as she noted, "Co-op d sn't pay for everything."

The Co-op Advantage

In order to take advantage of an even greater percentage of their co-op advertising dollars, most large stores have at least one staff person dedicated solely to doing co-op -- getting the dollars available, planning the promotions and billing them. Then he or she turns over all the claims to the accounts payable staff to follow up on collections. Like their smaller-sized counterparts, large stores often find that they get the most bang for their co-op bucks by using them to promote author appearances. At the Tattered Cover in Denver, Colo., for example, which has a staff of 300 and a five-person marketing department, Heather Conn, director of marketing, commented, "A huge percentage of our co-op dollars are spent on author promotions." "We have a very heavy schedule that averages 45 per month. We run advertisements every Sunday in the Rocky Mountain News and Denver Post with a complete list of that week's events. We also put our entire calendar of events into our newsletter. The newsletter itself is very co-op oriented. We underwrite our local NPR affiliate and 90% of those spots are for authors."

In addition, the Tattered Cover d s a fair amount of general advertising, all paid for with co-op. While Conn finds that "the biggest publishers are usually the easiest to work with," she makes sure that she includes regional publishers in her co-op plans. "We have little Johnson Books up in Boulder, and they're great. We like to be able to promote our local publishers and local authors."

When Conn first started two years ago, she regarded co-op as "a much more traumatic experience." Now that she's instituted systems to make it more manageable -- and less stressful -- she devotes only three or four days a month to doing co-op. At the heart of Conn's system is paperwork. From rate sheets to co-op requests, she's found that it's best to get it in writing. "We keep copies of everything," explained Conn, who faxes her co-op requests directly to her sales reps each month. She also bills monthly. "I keep copies, and my accounts payable keeps copies. I have one file for each publisher plus one file for each month of the year just to make sure I'm claiming all the money I've spent."

Unlike most booksellers, Patricia Montoya, events coordinator/co-op administrator at the 28,000-sq.-ft. Page One in Albuquerque, N.Mex., always enjoyed co-op. "I like the challenge of it," said Montoya. "I like finding new sources for it. Sometimes small publishers might not even have a formal co-op policy." She also relishes the challenge of creating authorless events, such as a Y2K panel with city leaders to cross-promote the store's popular Y2K section-and finding co-op to support them.

Page One is unique in the percentage of its co-op that it devotes to radio advertising. "We've pretty consistently had radio advertising on three stations for the past six months," noted Montoya. She also uses co-op dollars for in-store displays and Web displays. Still, she has found that "the most effective tool we have is our newsletter, which g s out to 6000 customers."

To keep track of her co-op dollars, Montoya continues to rely on a notebook in which she records the invoices she's sent out and the checks and credits that have come in. She and Conn at Tattered Cover are both in the midst of computerizing this information.

At Powell's Books, in Portland, Ore., marketing manager Michal Drannen also uses ye olde notebook system. Although he allocates the lion's share of his co-op for signings, he would like to expand his promotional repertoire. "We have done some title advertising and some incentives such as T-shirts and tote bags," he remarked. "It's one area we're exploring." He said it's "generally not worth it" to bill out listings in Powell's newsletter, which is devoted to author events as well as to noteworthy announcements, such as literary award winners. Drannen is also opposed to charging for in-store displays. "Our buyers are really conscious of what they can do with a book on the floor," he explained. "We've never had publishers purchase premium placement. We do some special displays, such as Star Wars, but we don't charge for that either, because in the end they're going to be profitable for us."

At Liberties Books & Music in Fort Lauderdale and Boca Raton, Fla., publicity director Vicki Feola's mandate is to come up with creative ways to spend co-op on events. "Our buyer handles getting the co-op dollars with our reps and then lets me know how much we have to spend," said Feola. For celebrity appearances, she gets as creative as her budget allows; she rented costumes for the staff to wear when Charlton Heston stopped by for a signing. Usually, however, Feola prefers to spend her co-op dollars on incentives geared to increasing book sales. For instance, she designed mousepads and T-shirts to give away to customers who purchased a book at an event. "If it's a book on how to write," said Feola, "I might buy composition pads and dress them up with a pen as a giveaway."

At Joseph-Beth and Davis-Kidd Booksellers, which together have half a dozen stores in Kentucky, Ohio and Tennessee, creativity has become a leading factor in planning promotions. About a year ago, according to co-op advertising director Angie Coleman Kennedy, the company decided that "we have to make ourselves unique and creative in order to make ourselves different from the chains. Once a customer walks in the door, we want to wow them." Joseph-Beth went on to develop a program for in-store promotions that would be administered by a four-person marketing team, of which Kennedy is a member. Because the company d s all its buying through Ingram, the wholesaler takes care of part of the co-op paperwork. Ingram submits sales reports to publishers and gets pool amounts then Kennedy follows up with publishers on specific promotions.

While the basic elements of the promotions are the same -- including tabletop displays, a panel in the newsletter, bookmarks for all six stores and special T-shirts for booksellers-each promotion couldn't be more different. Last summer Joseph-Beth went all out to promote the entire Harper Flamingo imprint, including special iced Flamingo coffee drinks served in special Flamingo cups. This past Mother's Day, the company chose to repromote a Random House fall title called Cut Flowers. "We used our co-op to purchase gift certificates to local florists," said Kennedy. "You could buy the book and get a $10 gift certificate. The florists gave us beautiful flowers for our display tables, and we got an incredible boost of sales."

For Kennedy, Joseph-Beth's new promotional plans are significant because "not only do we spend the money that we earn but we do it in a way that promotes the books." She cited increases in sales of as much as 70% for a full-imprint travel promotion as an indication that the program is working. Of course, Joseph-Beth continues to use its co-op dollars on more traditional projects as well, such as events, the store newsletter and two seasonal gift guides, which are printed in four colors and are inserted in the local newspapers.

Working on the Web

While publishers are generally enthusiastic about booksellers' attempts to reach out to new audiences, the Internet has proved to be an exception. Some booksellers view their Web presence as sacrosanct, somewhat akin to how they once regarded their store newsletters a decade ago. Far more would like to charge back at least a portion of their net promotions. David Weich, Web producer for, which has been on the Web since 1993, is one of the few booksellers who is outspoken about not accepting Webvertising dollars. "Every recommendation [on our site] is specifically selected by an employee, and our staff picks pages are completely personal. It's what makes us special," he remarked. In addition, the Powell's Web site, like its bricks-and-mortar counterparts, specializes in used books; as Weich explained, "We're not selling what the publishers are pushing."

Montoya of Page One, who holds the opposite view, complained that she's been stymied by publishers whose policies don't keep pace with retailing changes. "There are only one or two publishers that say they will reimburse you for your Web site," she noted, adding, "We're getting more and more bites."

With the advent of ABA's Book Sense, even more booksellers are expected to create new Web sites or rebuild their old ones. At this point, however, those publishers that do have Web policies disagree on how to treat Webvertising. At Holtzbrinck, for example, Internet advertising is regarded as a form of display and is reimbursed on the same per book basis as are in-store displays. At Harcourt, sales associate Jill Pesqueira deducts Internet advertising from the bookseller's regular pool and honors bookseller rate sheets. "For the Internet, as long as it's reasonable, we'll go with that as well," said Pesqueira. Marta Gasoi, advertising director, the University of California Press, commented, "I've had so few requests. I'm looking at it as another form of cataloguing books."

When it comes to the Internet, some independents are surprised to find themselves allied with their biggest competitor,, which has been pushing publishers to liberalize their Webvertising policies. After the brouhaha last winter over Amazon accepting co-op payments for its listings, the retailer now notes which books have payments behind them and updates that list daily.

Co-op, however, wasn't even a glint in the Internet retailer's eye until it began purchasing directly from publishers two years ago. Mary Morouse, Amazon's v-p, merchandising, who was hired around that time, told PW, "We realized that co-op dollars are a significant part of the purchasing equation." She chided the specificity in many publishers' co-op policy, taking to task such items as events pools and display allowances. "I had co-op policies, for example, that you had to put books in a front window and take a picture," remarked Morouse, adding that's home page gets more traffic than 200 regular stores. "Did publishers really want our window? It d sn't get much traffic, and it faces a wig shop."

Like independents, Morouse has crusaded against co-op approval based on initial buys. "We order every two weeks and get 20-30 turns. There should be a co-op policy that actually rewards performances. My returns are 3%." She also concurred with her bricks-and-mortar counterparts that verifying co-op expenses can be overly time-consuming. "Publishers," she contended, "should make things easier so that you're not wasting time tracking if a book is on the Internet for three days. You could do automated reporting by e-mail instead of printing out a picture of a screen."

On the Publishers' Side

Publishers were reluctant to comment on how, one of their largest accounts, has changed the way they do co-op. Roger Williams, a former bookseller and v-p, director of sales at Simon & Schuster, which d s have a Webvertising policy, went farther than most, commenting, "As good an account as Amazon is, they are a retailer and we're not going to change our policies for one account."

Williams has also been outspoken on behalf of independents getting and using their co-op dollars. Acknowledging just how confusing even the simplest seeming co-op policy can be, he told independents to make their reps be their co-op account managers. "If they're not managing your co-op," said Williams, "then you should call their supervisor. When a rep says to me, `I can't get an account to spend their co-op,' I say that's their job. When I look at these giant reports that show how booksellers spend their money, a lot of times what I'm finding is that they're getting the exempt money but they're still not spending all their co-op. Even if it's just placement allowance, the chains are using it -- you should use it."

For smaller publishers, placement at chains and independents could wreck havoc on their limited budgets. "I've seen a disturbing and growing trend among independents," commented Chris Palma, sales director of Harvard University Press, "to ask for placement only. It sends a message that everything's for sale, that the books on the table aren't always the best books. It ensures that only the publishers with the deepest pockets get on the table." Other publishers agreed in private, but since they have paid hefty fees of as much as the upper five figures to some chain retailers for front-of-store placement in conjunction with a special promotion, or the mid-four figures for smaller presses displaying a title in a section, they acknowledged that they must do the same for independents.

Understandably, some publishers have placed caps on placement so that they don't spend all their money on the chains. Still, when those same caps are applied either officially or off the record by reps for other types of advertising, many booksellers chafe. Usually this is done under the rubric of what constitutes "reasonable charges." How those charges are weighed varies from publisher to publisher, with some being much more liberal than others on co-op terms as well as on terms of sale in general.

Despite the mistrust on both sides, most publishers try to support independent booksellers with policies designed to help them sell books in ways that work in their community. Candlewick marketing director Deborah Sloan remarked, "We want booksellers to promote our books. We want them to sell them through. We prefer to allow the store to do what they know they're really good at, not what Candlewick dictates."

However, there are things that could make co-op work more smoothly. Booksellers of all sizes agree with Drannen at Powell's that "reducing the amount of paperwork and the amount of calling would be my biggest wish." His second wish for faster payments is also high on a lot of lists. "Once you've sent off your claim," said Drannen, "the payment should be automatic. What went out should come in."

From the publisher's perspective, the biggest difficulty is booksellers not getting preapproval. "It's our policy to demand prior approval," noted Gasoi at UC Press. "Things can go wrong, books can be delayed. There have been some fiscal years where we've had very popular books, and we've just run out of money. It's as much to protect the stores' interest, too."

So where d s that leave co-op? Pretty much where it's always been: an uneasy alliance between publishers and booksellers. Even so, it's still the best way to enable booksellers to do what they do best -- sell books -- as long as it is applied fairly.