Ron Pramschufer: This is Ron Pramschufer, and welcome to Publishing Basics Radio, where weekly, we try to help you navigate the self-publishing minefield, so Eric, what’s a book distributor?
Eric: What’s a book distributor? Kind of a silly question, but I’ve always said it’s a publishing services company. It’s not a wholesaler. Let’s start with the negative. It’s not a wholesaler. A wholesaler really is in the business of servicing bookstores, whereas we’re in the business of servicing publishers from a distribution sales and marketing point of view, so the sort of hybrid companies; they’re outsourcers for publishers who are not big enough or strong enough in the marketplace to have their own sales, their own distribution center, but when it’s effective, it’s extremely effective, and it sort of simulates what one would have if he were a bigger publisher and you were – assignment issues to you were Random House or Viking Penguin.
Ron Pramschufer: Okay, is it safe to say you sell books?
Eric: The essential of what we do is we’re a very powerful sales organization selling the book trade, Barnes and Noble, Borders, the big wholesalers, Ingram and Baker and Taylor , and other accounts around the country, utilizing the same sales concept that the big companies use.
Ron Pramschufer: Okay, in a place like Ingram or Baker and Taylor, everybody seems to know about them. They’re wholesalers or are they distributors?
Eric: We’re in a changing environment right now. Ingram has, traditionally, since 1970 been a wholesaler, a traditional wholesaler, selling bookstores all over the country. Last year, they embarked on a new program, where they are providing the same distribution services that we provide or any of the other companies provide on a brand new model. They tried this back in the late ‘80s. It did not work out well for them, and they have a new model, which I’m very encouraged by. I think that they’ve got an excellent model right now.
Ron Pramschufer: Oh, okay. A wholesaler generally – I stepped in that one. As far as Ingram, it’s doing both. Like a typical wholesaler, like I guess Baker and Taylor; the difference between a wholesaler and say, with you, a distributor is they don’t really make sales, right?
Eric: That’s the negative. The wholesaler is critical to the success of this business, and the distinction is this; that the real market that Ingram is going after and Baker and Taylor is going after is the marketplace; they’re selling too, so whether it’s libraries or independent bookstores or the big chains; they design all of their systems supply and to satisfy the requirements of these accounts.
We think of it just the opposite of that. We think our value, in this kind of equation, is to the publisher. We get involved with a book way before it comes out, six, seven, eight months before it comes back. We contribute to the discussion on pricing and jackets and other issues and marketing issues before we even go out and sell the book, so our design is somewhat similar to the design of a sales department within a larger publishing house.
We sell to Ingram and bookstores just like Ingram does, but we don’t see that as our driving purpose in life, so I just think it’s a matter of emphasis. Also, we don’t sell every book in the , which Ingram tries to do. We sell the people, which are under contract with us, which are about 250 publishers.
Ron Pramschufer: Okay, let’s say – we’ll put aside what I have to do to qualify to be one of your publishers, but let’s just start like from the beginning. You just signed me up, right? What happens?
Eric: If the publisher’s is not experienced and is not coming from another distributor, we start to educate them very quickly in the norms of this business so that they can start to conform to the way this business operates. An example that we generally use with this publisher is if you want your book in Barnes and Noble, then we have to have information, ready to sell information, about four to five months prior to your pub date. That’s how much lead time they need, and if we don’t have that much time, then we’re going to miss the budget for that month. In other words, we’re not going to be able to get the book in upfront before publication, which is one of the things that we do.
So we think that that is one thing that a lot of independent publishers have no notion about; they don’t have contact with Barnes and Noble; they don’t know what the norms are, what the procedures are and rules and regs are, Barnes and Noble, but that’s one of them.
Another one is having plenty of material for our sales reps to show the buyer because the buyer doesn’t make up a bind decision just when we’re there; they basically stack up these books, and then they make kind of a universal decision at the end of the month, and it’s based on what the rep says, who the company is representing, what the book is, what the promise was and what the material looks like, so if you have an understanding – the book jacket doesn’t measure up; it looks like it was designed by a friend of the family or something; that’s going to really, if the budget’s tight; they don’t have enough money to fulfill all the promises, the likelihood of having that buy-cut or limited altogether goes way up.
So what we do is we try to get the best material in our hands as possible; we work on this face to face with our publishers, meaning not at a sales conference, but on the phone and in other ways so that they know what they’re meant to do when they’re meant to do it so that they benefit from the optimal results that we would achieve for them, whether it’s 100 books or 10,000 books as the up‑front buy.
Ron Pramschufer: You mentioned you have salespeople. Salespeople make sales calls.
Ron Pramschufer: Does a salesperson make a call and sit down with, say, the Ingram’s buyer?
Eric: Absolutely; every month.
Ron Pramschufer: Okay, and then what would go on – you represent a lot of different – say 250 publishers?
Eric: I can tell you because up until November last year, I’m the president of Midpoint, and one of my jobs here was to sell Ingram, so up until November of last year, when I fired myself from that job, I know what went on on a face-to-face basis.
One of the things that’s unusual at our company is all the principals, all of the owners are salespeople here, so I was one of the salespeople, and publishers love that because these are not anonymous people; these are people that intimately are involved with the success and the growth and the so on and so forth of our company.
In terms of Ingram, the wholesales relationship is based on knowledge and trust and judgment, so when I work with our buyer at Ingram or when I did work with our buyer, so much of the trust element was a predicate for everything that followed, so I would come in there really with, what I thought that book – 60 days of inventory was worth for a particular book. If we didn’t have much marketing information; if it looked like it was gonna be a slow‑mover, we went with very small quantities so that we weren’t generating an automatic return 70 days later.
If it’s a big book with a tremendous amount behind it with shows that are going to feature the author or other issues, these are front‑list books, obviously not back-list, which gets another kind of treatment.
Then you go for a bigger number because the demand for that book is gonna be somewhat higher for those 60 days. Ingram is not looking to hold inventory for more than 60 days because they owe us money for those books. They, ideally, want to have sold those books out of their warehouse and reorder.
Ron Pramschufer: Okay, so maybe the salesperson has the relationship with the buyer. The buyer, on the salesperson’s recommendation, so to speak, will stock a book, and obviously, if it doesn’t sell, it comes back.
Eric: That’s absolutely right.
Ron Pramschufer: So back to the what’s required? You mentioned materials and all; I mean, this is all when you talk with a publisher, this is something that the publisher would pay for and supply?
Eric: Yeah, but let me go backwards here a little bit because there’s a few doors that everything happens to get through in order for us to get in front of the buyer.
No. 1, tons of publishers come to us and say, “Will you distribute our books,” and for the most part, probably 95 percent of the time, we say no. Why did we say no? We say no because we don’t want to be sitting with a buyer with something that’s not gonna sell, in our judgment. Now, I don’t have a window into what’s gonna happen tomorrow or the next day. I’m no different than anybody else, but I have 35 years of experience in this business. I was the head of sales at Simon and Schuster one time. That doesn’t make me smart, but it shows that I’ve worked within the framework of this business.
Ron Pramschufer: Okay, so what do I need to do now – I was gonna get to this later, but I might as well get to it now. What do I need to do as a new publisher?
Ron Pramschufer: What opens the door here?
Eric: Okay, is the quality of what they’re sending us – the fact that they might know somebody I know because I’m the first – my assistant and I are the first kind of door they have to get through. The phone call in here – something that’s a little bit personal so that I can get a sense of the story, not the book, but the story; the person behind the book. We oftentimes say we don’t take on books; we take on people because oftentimes, the success of a book has something to do with the all-visibility to sell and promote themselves before the public in some way, and we’ve see tons of examples of that.
Sometimes, the product speaks for itself, but nothing quite speaks for itself. It’s an extension of the imagination, intelligence, ability or an individual or a group of individuals. That’s what a book is, between paper and boards, and that’s what we want to, in part, look at. Now, if some established publisher comes to us with $2 million or $3 million or $5 million worth of business, which doesn’t happen very frequently, but if that came, then another criteria has to come inboard. Can we handle it? I mean, that’s a good question too. Are we the appropriate distributor for these people? They already know the business.
Ron Pramschufer: Okay, generally, I’m talking more about the small. Say you say I’m a pro golfer, and I’m left-handed, and I’ve decided to write a book on how to, an instructional book on how to play golf left‑handed.
Ron Pramschufer: So I’ve got the credentials; the book is good; you look at it; it looks like something that might work.
Eric: Gotcha to have a warm, nice feeling about me.’
Ron Pramschufer: Mm, hm. What happens then?
Eric: If we were interested and we thought there was potential and we weren’t kidding ourselves, and we aren’t usually, what we would do is offer that person a contract, which is usually a one or two‑year contract, to provide the sales, marketing and distribution services, the Midpoint trade books on their behalf for a period of time for a percentage of sales that varies based on who the publisher is.
Ron Pramschufer: And is there a typical percentage?
Eric: It varies. It’s in the 20’s somewhere, so say mid 20’s, 25 percent, 24 percent, 26 percent. One book publisher sometimes is as high as 28 percent. They usually don’t go to 30 percent.
Ron Pramschufer: Okay, now that should – some people know about places – I believe it’s like biblio charges – a discount off of the top number, which includes their commission, so yours is basically your commission is after the sale?
Eric: Right, and if do the simple math, you have a $20.00 retail, we sell it for about $10.00 or 50 percent off $20.00, and so now, we’re dealing with $10.00, and that’s where the percentage comes off of, not the $20.00, but the $10.00.
Ron Pramschufer: Okay, and is 50 discount pretty typical?
Eric: Sure it is.
Ron Pramschufer: And also like at Barnes and Noble or Border?
Eric: On average, it works within that framework; yeah; pretty close.
Ron Pramschufer: Okay, and I’m a left-handed golfer again, right? And I’ve got this book – you know you’ve got the confidence that you can sell to your people if you tell them to buy the book, they’re gonna buy the book anyhow. I mean, if I go in and I don’t have – I’ll tell you, look, I’ve got everything wrapped up in this book; it’s edited; it’s beautifully designed; I got 10,000; I’m sitting in a garage, but I’m all out of money, Eric, can you help me?
Eric: Maybe not.
Ron Pramschufer: If I say my next-door neighbor is Oprah Winfrey, and she’s gonna put me on tomorrow?
Eric: You know, I mean, I’ve made a lot of comments about the book business, but it never was a business – it wasn’t a business really well designed for people that don’t have a lot of money. There has to be some level of capital, capital you can spend, and if you don’t get it back, not feel badly about it. In the good ‘ole days, it was not a rich person’s business, but it was certainly – it requires capital, and so the person that comes to us with that golf book you’re talking about and has no money to spend on it; we would probably say, well, and 10,000 books, which we never would have recommended a print. You know, they wrapped up all their money in $10,000.00, and that’s just bad judgment. I just don’t know if I would get involved with that.
Ron Pramschufer: If you do get involved; I mean, success is sort of relative to people – if you do get involved with the book, what would you hope to be able to sell for you to have figured it was a good idea on your end?
Eric: Well, I think for an independent publisher, I think if you can sell through the book trade, and then we hope that our publishers are selling in other markets as well, and then we represent maybe only 50 percent of their overall sales results, but I would say a book which sells 5,000 copies is a very good book.
Ron Pramschufer: Oh, that’s good. I think people will be happy to hear that actually, and you mentioned you hoped that you were only like 50 percent of their sales, so do you have an exclusive within a certain area?
Eric: No, we’re different. We only take the accounts we actually sell, which is about 25 accounts, and the rest of it’s open.
Ron Pramschufer: Thank you; well, that’s encouraging for everyone then.
Ron Pramschufer: All right, Eric, well, it was very nice talking to you today.
Eric: Well, thank you.
Ron Pramschufer: I think I learned a few things.
Eric: Well, I did too actually. I learned things myself.
Ron Pramschufer: Did you?
Eric: Every once in a while, we have to do that.
Ron Pramschufer: Publishing Basics Radio, this is Ron Pramschufer. See you next week.
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