The Changing Retail Landscape: A Guide for Print-on-Demand Authors
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Having a viable and effective retail listing at the end of the publishing journey can feel like a foregone conclusion. To create an online retail listing, all you have to do is press "publish," right?
The reality is that a great deal of planning and strategy goes into making a “healthy” book retail listing. A healthy listing on platforms like Amazon, Indigo, and Barnes & Noble means the book is listed as “available for purchase” from the retailer and includes its cover image, preview selection, and “about the book” description. Though invisible to the average book reader, publishers know that a book must meet certain retailer conditions to be accessible to readers -– and if these conditions aren’t met, your book might look less enticing or might even be downright difficult to purchase. Considering the countless hours you’ve put into your project to get to the point of sale, this is a less than ideal outcome (to put it mildly).
The challenge is that these conditions and requirements can change -– and sometimes dramatically so. In fact, two recent industry-wide updates prompted us to write this blog post: the increased importance of book returnability and the establishment of a new minimum wholesale discount through the world’s largest and most popular print-on-demand (POD) platform, Ingram.
As a publishing services provider who has assisted authors in publishing hundreds of titles this year alone, we’re on the leading edge of these industry changes and are actively assisting our authors in responding to them. Below, we’ve compiled an overview of our pricing and distribution advice into an easy-to-follow “frequently asked questions” format that encapsulates the new realities of selling books in 2023 and beyond.
The book retail landscape can sometimes feel like it’s been built on shifting sands, but our hope is that this resource gives you —- a writer or author in need of a map to this new landscape —- a stronger foundation of knowledge to draw from.
What factors determine how retailers acquire and/or list a book for sale?
The global publishing industry comprises many booksellers, all of whom rely on various forms of inventory management. Some will order books into their physical store location or distribution warehouse while others will list titles on their online retail store and fulfill orders one at a time through print-on-demand printing channels.
Regardless of the acquisition options the retailer chooses, both independent mom-and-pops and e-commerce giants like Amazon carry risk when stocking books. They’re shelling out money for copies of something that isn’t guaranteed to sell. As for-profit businesses, retailers aim to mitigate that risk as much as possible while still turning a profit and giving their customers what they want: a wide selection of high quality books at fair prices.
Two key ways retailers mitigate their risk is by acquiring books with a Returnable status and a high wholesale discount percentage: two things that self-published authors can control. Authors without returnability and a high wholesale discount percentage are likely to encounter resistance from retailers when it comes to stocking their book.
What is book returnability and why is it now so important?
A book tagged with the “Returnable” status through Ingram allows retailers to get refunded for any copies they don’t manage to sell. Being able to return unsold copies of the book they are purchasing mitigates their risk in buying copies up front.
At FriesenPress, this option has allowed thousands of our authors to make their books more appealing to brick-and-mortar bookstores and get stocked on store shelves over the years.
What’s changed is that online booksellers are following the lead of physical bookstores and —- save for a few rare exceptions —- now require a Returnable status to list POD titles. We’re seeing retail listings of books without returnability being inaccurately displayed, listed as unavailable, and experiencing long shipping delays. This industry-wide change affects every publisher and author who leverages POD to sell their books.
Okay, so how do I make my book returnable?
For independent authors, enabling returnability is a selectable option indicating to retailers that your book is returnable through Ingram. Retailers — brick-and-mortar and online alike — may filter out new books that lack the Returnable status. Seeing that tag gives them that little extra incentive to offer your book to their customers and take a chance by ordering stock.
However — and this is a big “however” — authors need to be very aware and informed about the potential financial risk they take on when making their book returnable. That’s because, when a retailer returns a book to the distributor, the publisher is required to reimburse the retailer for their purchase — in addition to any applicable shipping, handling, or processing fees. If you self-publish your book, you are both author and publisher, and the cost of reimbursing your distributor for returns can be very costly. Not only is this something you need to financially plan for, but it can mean that royalties you had already been paid can be clawed back to cover the cost of returns.
At FriesenPress, we enable returnability for our authors through Book Return Insurance. This service functions like many other insurance products: once a 1- or 2-year term is paid for, we cover the book return costs incurred through our distribution partner, Ingram. This means you only need to remit royalties for the returned copies; depending on when your returns are processed, this amount may simply be deducted from your pending royalties balance and no further action is required from you.
What is a wholesale discount and how does it affect my ability to maintain healthy retail listings?
The wholesale discount is the combined discount that a retailer and distributor receive off the list price of a book when they purchase that book. When setting the list price for paperback and hardcover editions, authors decide to either give the wholesale network a discount of 55% (the standard trade discount) or 40% (the new minimum wholesale discount — often called the “short” discount).
With the 55% trade discount, the retailer can purchase a book at a deeply discounted price, based on the list price set at publication, offering more incentive for them to purchase the book and more margin to sell it. That margin covers the cost of personnel ordering, unpacking and managing stock, and offering your book in their (perhaps digital) store. Depending on their contract with the distributor; whatever percentage is left goes to the distributor.
The short discount works the exact same way —- a retailer would get up to a 40% discount off the list price when purchasing a book —- but as you can calculate, there is less margin to make a profit and therefore less incentive for retailers to choose a book that offers this discount structure.
Book retailers, whether brick-and-mortar or online, prefer to list books that meet the standard trade discount. You don’t need to be an economist to understand why —- it’s because retailers earn more money per copy sold! This is the reason we almost universally recommend our authors select the trade discount when pricing their books. Though you would make less royalties per copy sold and have a slightly higher list price, the increased visibility and accessibility on these high-traffic sales channels is often worth it.
What is the new “minimum wholesale discount”?
The minimum wholesale discount percentage recently increased from 30% to 40%, meaning that book retailers and distributors require a larger margin of short discounted books’ retail prices when purchasing them.
The gap between the “trade” and “short” discount structures has narrowed so significantly that authors need to carefully consider whether that extra 15% in royalties is worth an incomplete or altogether missing retail listing. Again, we always recommend that our authors plan to list their book under the trade discount.
What happens if I don’t enable returnability and trade discounts on my books?
Authors without returnability and/or a trade discount can expect several limitations to be placed on their books’ listings by retailers.
As established above, books that don’t meet these requirements are likely to be inaccurately displayed (such as missing portions of their listing information), listed as unavailable, experience long shipping delays, and may not be carried by a retailer at all. In a similar fashion, physical bookstores are unlikely to stock books without both returnability and a trade discount.
Beyond that, retailer requirements can vary. Here are two examples:
On Amazon, a book on the short discount program is likely to only be listed for sale by third-party retailers —- not by Amazon itself. While still “available” on Amazon, we would consider this a suboptimal listing as it likely won’t be applicable for Prime shipping and may have inflated listing prices set by those third-party sellers;
Conversely, Indigo directly confirmed to us that a book on the short discount program will be listed as “In Stock” on their online site and orders will be fulfilled directly by Indigo.
Publishing a book without returnability and a trade discount is a risk that is likely to negatively impact your book’s accessibility and sales potential. Unless there is a strong strategic reason behind that decision, such as a well-developed personal sales funnel or demand for direct or consignment sales, we recommend keeping this in mind as you strategically plan for publication.
Can third party resellers on Amazon be trusted? Why are they selling my book at a price I didn’t agree to?
According to Amazon, “more than half the units sold in [their] stores are from independent sellers.” Suffice to say, resellers are a massive part of the Amazon empire and are not shady or nefarious by nature.
Amazon allows people and other businesses (called “resellers,” or “third-party retailers”) to set up storefronts on their site so that they can sell new and existing products directly to Amazon’s audience. In exchange for providing this opportunity, sellers pay Amazon a referral fee for every sale they make.
In the context of “reselling” books fulfilled through print on demand, third-party resellers are essentially acting the same as any other book retailer: they access your book information through a distributor like Ingram, have the copies they need printed, and ship them to the customer when a purchase is made, same as any other retailer. In most cases, resellers do not manage physical stock. It is common for resellers to increase the price of the products they are selling to ensure they cover costs and make a profit; that means it’s common to see resellers increase book prices above (sometimes well above) the list prices authors select when pricing.
For more information about Amazon’s selling programs, click here.
How do I stop Amazon and other retailers from discounting my book?
The short answer: this isn’t something you can control. But that’s not a bad thing, because a retailer discounting your book can actually benefit you.
When your book is being discounted by a retailer, it’s important to note that this doesn’t affect your royalty per copy sold. The discount they are shaving off (i.e., selling a book with a $19 list price for $18) comes out of their profit margin.
Retailers do this because people like buying things that are on sale. Saving money makes us feel good and, if the sale price is the lowest price around, it can be a reason to choose one retail outlet over another.
How should I be setting up my book with retailers? What do you recommend?
In sum, to ensure your POD listings are up to date and meet the current retail conditions, you must enable the maximum wholesale discount of 55% and activate book returnability. These are our most common recommendations to the authors we assist in bringing their books to market.
However — there are those italics again — the big caveat to this is that your approach to the retail space should be dictated by your sales strategy and goals. For example, an author intent on selling the bulk of their copies directly to their readers in person will likely have a different discount structure than an author who will be driving every sale towards Amazon. Our recommendation above could very well be the right fit for you, but it’s worth exploring all the options available to ensure you’re making appropriate choices for your goals.
Ultimately, your approach to the retail landscape should be carefully considered, well-plotted, and unique – just like the content gracing the pages of your book.
