Tight margins and fierce competition have not prevented new distribution companies from starting up or some established companies from looking to expand. While several specialize in distribution for micropublishers—filling the void left by the closing of Access, BookWorld, and Blu Sky Media—others are looking to add larger clients. Still others are doing both.

That's the case at BookMasters Inc., in Ashland, Ohio, which offers an array of services, from printing to e-conversion and fulfillment, under one roof. Through its AtlasBooks Distribution Services division, BookMasters began handling distribution for micro publishers a decade ago; by offering clients access to book trade accounts and selling direct-to-consumers via a dedicated AtlasBooks.com Web site, Atlas has turned self-publishing into a profit center. BookMasters has augmented Atlas's internal growth with strategic deal making, taking on most of BookWorld's clients in fall 2007 and purchasing Biblio the following January. “It's no secret that the self-publishing market is growing like gangbusters, and frankly, it's a cornerstone,” says BookMasters CEO Dave Wurster, adding that sales for Atlas were up 17% last year.

BookMasters moved into trade distribution in a bigger way in 2008 with the launch of its BookMasters Distribution Services division with former PGW president Rich Freese at the helm for the first year. After Freese's departure to NBN, the company hired Tony Proe as v-p of business development to increase the client base for both BDS and Atlas. While Atlas has served more than a thousand clients, BDS has 15. It just began representing CRW, publishers of the Collector's Library series; Australia-based Exisle Publishing; and British specialty transportation publisher Ian Allan Publishing.

Formerly associate publisher for Papier-Mache Press, Dan Haldeman didn't plan to go into distribution. But in 2008, when urban fiction house Melodrama Publishing in East Patchogue, N.Y., asked him to help set up operations, he contacted the company's printer, Malloy, and learned that it wanted to expand by fulfilling publisher titles to customers. “I figured if Malloy was willing to do so for Melodrama, then I could simply upgrade from being a national accounts rep to starting my own distribution company,” says Haldeman. Within six months he had founded Book Hub using Malloy in Ann Arbor as its fulfillment warehouse. “The difference,” he says, “is not having a warehouse and not having control over purchase order processing and accounting when you're a rep.”

At the beginning of March, Book Hub, which has five full-time employees, hired its first commission rep groups. In addition to distribution, Haldeman offers clients book production services, co-op marketing and book tour programs, and sub rights representation. Book Hub, which is located in Santa Cruz, Calif., has signed 30 small presses with 250 titles. The company's bestselling book to date, says Haldeman, is a cookbook by Jennifer Cinquepalmi, Gluten-Free Deliciously, which averages 75 to 100 copies a week. It is also readying its first fiction title through its publishing subsidiary, Blue Star Books, Susan Wingate's Easy as Pie at Bobby's Diner (May).

When Watson-Guptill moved its distribution to Holtzbrinck in January 2007, three members of its management team—Robert Hughes, JoAnn Nolan, and John Pascarelli—formed Innovative Logistics and took over W-G's 240,000-sq.-ft. warehouse in Lakewood, N.J. Initially, Innovative concentrated on fulfillment clients, but last year it hired Continental Sales and Jacqueline Gross to handle sales in the U.S. and Canada, respectively. That's one factor that Innovative president Hughes attributes to the company's improving financial picture. “We're forecasting we'll be in the black this year,” says Hughes. “We're already ahead of last year.” Although many of Innovative's clients were previously with Watson-Guptill, it has reached out to other small and mid-sized presses looking for more personal attention than larger distributors can offer. According to Hughes, that was a key reason behind German art and photography publisher Steidl recently shifting from D.A.P. to Innovative.

In 2006, Amy Collins MacGregor and Bethany Brown formed the Cadence Group, with offices in Chicago and Cohoes, N.Y., to help mid-sized publishers and small presses create market-ready books. Last fall they formed a new division, New Shelves Distribution, in partnership with several fulfillment houses. By combining sales programs with warehousing, ordering, and shipping, New Shelves gives small presses and a few self-published authors access to national and regional accounts with a different business model: instead of taking a percentage, New Shelves charges its publishers on an hourly basis for à la carte services. “The publishers aren't being nickel and dimed by fees. We do a P&L at the beginning of every project,” says MacGregor, who has 61 clients in the program. Among New Shelves's top-sellers are David Brody's Cabal of the Westford Knight (Martin & Lawrence Press), which was originally with Blu Sky and has sold almost 10,000 copies.