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We spend a lot of time talking to other publishers, in person or over
the Internet. One point of confusion that often comes up is the
difference between a wholesaler and a distributor. It's important
for publishers, including self-publishers and POD publishers to
understand these terms and use them correctly, or they could make some
big mistakes.
Here's a brief explanation:
Wholesalers
A wholesaler is a company like Baker & Taylor or Ingram who may
(or may not) stockpile your books, and sits and waits for orders from
the
bookstores. They have no sales force and do basically no marketing
(they may have optional catalogs or mailings that you can pay to be
in), but they have a lot of books from a lot of companies, and provide
convenient one-stop shopping (and one-stop returning) for book stores.
Wholesalers usually want a discount of 55% off the retail price of
your books, so they can sell it to the book stores for 40% off. If you
only sell to them in small quantities or on a special order basis, you
can arrange a lower discount, but if you want them to stock, and be
able to ship out to the stores right away, then you pretty much have
to bite the bullet and give the discount.
Which way you go on this is decision to be made after doing some
research and evaluating what is best for your company. You'll hear a
lot of opinions on this from other publishers. Listen to them all,
then decide what's best for you.
You can sign with and sell to as many wholesalers as you want/can.
There is no exclusivity.
There are different sizes of wholesalers. Ingram and Baker & Taylor
are the biggest. There are many smaller ones, including Brodart,
Midwest Library Service, Academic Books and many more. Generally,
these companies don't keep your books in stock. When they get an order
from one of your customers, they order from you.
While you may have an agreement with the big wholesalers to keep
your books in stock and you give them a 55% discount, you can have
other agreements with the smaller wholesalers. For single book orders
it's not uncommon--or unreasonable--to only give a 20% discount and
have them pay for shipping.
Distributor
A distributor is a company like Biblio or PGW that actively
sells books to
the chains and independents with a sales force that goes out to
bookstores
and pushes their (your) books.
They fit between the publisher and the wholesaler in the supply
chain. Even though the distributor makes the sale, the bookstore will
actually order the books from a wholesaler that they regularly do
business with. That's why a distributor needs to take over your
accounts with the wholesalers, or else they'd never get paid. That's
also why distributors want exclusivity within the book trade.
If you have an exclusive distributor, it doesn't stop any other
wholesaler, including Ingram and B&T from getting your books.
Everyone can buy them and sell them. It's just that they place their
order through the exclusive distributor.
One important point is that exclusive distributors are exclusive
only for THE TRADE. That means book stores. You can still sell
directly to catalogs, gift stores, airport stores or wherever. It's
only in the standard book store channel that they have exclusivity.
For their efforts, distributors take and additional 10% of
retail. That means you get 35% of retail, the distributor gets 10%,
the wholesaler gets 15% and the retailer gets 40% less any discount
they offer the end customer.
This rate may vary from distributor to distributor, so check them
out and read your contract carefully.
Library Distributors
Somewhere in between are the larger library "distributors,"
including Quality and Unique. While these companies have sales forces
that go out to libraries and push product, they are not exclusive. You
can sign with both of them, and others as well.
They generally want a 55% discount, but if you have a book that
will do well at a library, it's worth it.
So What Do You Do?
You pretty much need to have some relationships with wholesalers,
but a distributor is optional. Depending on your circumstances, your
company, your products and your distributor, it may be a wonderful
thing, or it may be a big loss.
I've heard stories that go both ways--wonderful and horrible.
The real question is: "Do you want/need an exclusive
distributor?" We've all heard horror stories, and we've all heard
success stories. It all depends on you, your book, the distributor and
the deal you get.
It might be wonderful for you, or a total bomb. Don't jump into it,
and don't rule it out until you know what is or isn't best for your
business.
Before you sign anything, do your research. Read all the articles
on Ivan Hoffman's site. Talk
to a number of present and past publishers who have signed with them.
Then decide what's best for you.
Michael Bremer
UnTechnical Press
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