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"Working with BEBC is like working with an extension of our own team....." "I really appreciate and am grateful for the care you have taken for Reflect Press. It's the reason why I like working
with BEBC so much.” |
An introduction to third party book distribution designed to help book publishers understand what is involved, what it costs, and how to distinguish between one book distributor and another. John Walsh, founder and Managing Director of BEBC, offers some guidance on third party book distribution and book warehouse storage. Third party book distributors, to whom publishers outsource some or all of their non-editorial activities, provide services ranging from pick and pack warehouse facilities to the full service of sales, book marketing, order fulfilment, credit control, sales and purchase ledger maintenance, management accounting and every other non-editorial aspect of publishing required by the Client Publisher.
Because the services provided by book distributors depend on the requirements of their clients, it is important that standard services provided to all clients are separated from those requirements peculiar to particular clients. Book distributors’ charges are usually (but not always) based on a percentage of sales turnover (before returns) and this figure is just one of the indicators used by a distributor to assess the profile of a client publisher. In the Standard commission charge, the book distributor needs to cover his overhead costs (heat, light, space, staff, IT, management, etc) and add a margin. On top of this, the cost of shipping a box of books to a customer also has to be paid for and most book distributors charge a percentage of invoice value to their client. Some distributors may offer a "flat management fee" (a percentage of turnover) where Carriage is included and this, of course, tends to be somewhat higher than the fees quoted by others. Optional Services All other services, which may be particular to a client, need to be quoted for and charged separately. This category of services might include the provision of inspection copies (for educational publishers particularly), free copies, (frees), books sent to (and returned from) exhibitions, the running of Consignment Accounts (including Amazon, overseas Agents, etc), Direct Sales (sales to end-users with associated Credit card costs), and the processing of Returns (for Trade Publishers, particularly). Returns can account for 10-20% of a publisher’s turnover and the costs involved in unpacking, quality control, physical returning of the book to stock, and the raising of a credit note all mirror the activity involved in making the original sale. There are no credit control issues involved in processing returns but there is greater time involved in checking whether the returned goods are fit for resale. The activity involved in selling a book takes time, and the activity involved in accepting its return also takes time. It is a painful truth that both activities have to be paid for even if the resulting revenue is zero. The basis for charging for returns and/or credit notes varies between distributors and may be a percentage of the goods value, a charge per item, or a charge per line. Finding a Book Distributor If you are considering outsourcing your book distribution it is essential that you know exactly which book distribution services you need. When you begin to approach distributors, you will be hit with a whole host of questionnaires all attempting to elucidate information about your profile in order that the distributor can estimate the cost of welcoming you into his stable. The problem is that while the aim of the questionnaires is identical, the questions asked and the information requested come in different forms. You, the publisher, are then faced with the Herculean task of completing up to 10 questionnaires. Following that, you will, to the best of your ability, attempt to sort out the replies into a manageable shortlist of possible distributors. It is about this time you begin to feel that your time could be better spent editing books and it is here that help is at hand. See What you need to know about Distributors and What Distributors need to know about you, below. Minimising the Cost In the same way that distributors have to recover their costs, there is nothing to stop publishers attempting some level of recovery from their customers. Terms from the past include "small order surcharge" and "low value handling charge" while today smaller publishers charge postage and packing on small orders in an attempt to talk up an order or, failing that, to gain a contribution towards carriage. Publishers selling direct are often in competition with Amazon (who ironically they also supply on endless credit and often a very generous discount) and if Amazon can charge £2.16 a consignment + 59p a book there is absolutely no reason why a publisher shouldn’t do the same, saving the Amazon discount as well as earning the carriage charge. It is important to remember that what your distributor charges you for his services in no way affects what you charge your customer. You, the publisher, fix your prices, your discount structure, your returns policy and your carriage charges. Your book distributor is there to carry out your wishes and if you want carriage to be charged or waived, if you want some form of levy to be imposed on your customer for returns, if you want to try to apply a firm sale policy (not legal for mail-order sales to end-users), there are distributors who will help you do all this. It is so easy to confuse a distributor’s standard policy with your reasonable wishes and a good flexible distributor will carry out your wishes or will have to produce a convincing argument for why what you want to do is not advisable, practical or possible. What you need to know about book Distributors Here is a list of services provided by distributors beginning with the basic, standard services (needed by all publishers) and then followed by a non-exhaustive list of selected services, some of which you may want, some you most certainly won’t and some you may need later, if not now. Standard Services Chargeable Items Optional Services What Distributors need to know about you The following is a selection of questions the answers to which enable distributors to assess their costs and charges for servicing your distribution needs. Storage Where to from here None of the above will instantly find you either a new distributor (if you already have one) or a distributor for the first time. Whatever criteria you use for selecting a distributor will need more than the fairly blunt tools of charges alone. Talk to other publishers, certainly talk to publishers using any distributor you may be seriously close to choosing, and look for a publisher who has a familiarity with your key markets. If the bulk of your business is UK trade there are Trade Book Distributors who specialise in this area while if you are an educational publisher supplying both schools and trade then there are distributors out there for you, too. Ask as many questions as you like about possible savings through synergy, establish how good the distributor’s credit control is, and don’t let any distributor hang on to your money for too long. All good distributors should hold publisher’s client receipts in secure ring-fenced funds to which the distributor has no access. Try to find a distributor who takes an interest in your list and your market, and not just in your figures. This introduction to third-party distribution is just that, an introduction. You do need to answer as many questions as you can from the “What distributors need to know about you” paragraph and, in the meantime, BEBC Distribution has a grid that asks all the necessary questions and enables distributors to match their charges to your answers. For you, the publisher, this will save a great deal of time in the early stages, as for the first time, publishers will be able to make a direct comparison of all the charges for exactly the same services. When you have completed this first stage you set off on the search for the right fit. Good luck! |
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Book
warehousing and Storage