FedEx reported a worse-than-expected fiscal fourth-quarter loss today, which they said is due to higher fuel prices eating into profits. They plan to do as much as they can to reduce expenses. People around the country are also doing what they can to use less fuel. The Federal Highway Administration announced today that in April of this year Americans drove 1.8% fewer miles than a year ago—a decline larger than the only other time in our history that driving declined, which was during the energy crisis of the late 1970s and 1980s.
Yet the book-selling business continues to ship books back and forth across the country over and over again as part of a strange arrangement between booksellers and publishers that allows booksellers to return to the publisher for a full refund any books that the bookseller ordered but has not sold.
Last Friday, NPR did a story on this book-return system that quoted the CEO of Barnes & Noble saying that the returns system is “insane.” That’s certainly the way I see it, especially with today’s rising energy costs and signs of global warming.
Most people have no idea how the book-selling business works. They are stunned when I tell them that a bookstore can order a bunch of books, send them back for a full refund if they don’t sell, and then turn around and re-order them. Bookstores routinely do this. In 2005, roughly 1.5 billion books were shipped to bookstores in the U.S., according to the Association of American Publishers. Of those, 465 million, or 31 percent, were later returned to publishers.
It took me a long time to understand the system, myself. Our stress-management book that we first published in the 1980s was mostly sold through bulk sales rather than through bookstores. Later when I had a book published by a major publisher, I still didn’t know how the system worked. The publisher would send my agent statements of numbers of books sold, which my agent would forward on to me. I began to notice that the total numbers of books sold was going down over time rather than up, so I asked my agent what was going on. That’s when I found out that bookstores routinely order many copies of a book—which show up as “sold” on the publisher’s statement—but then return on average 25% or more of them—which removes them from the “sold” category. To this day, I have only a vague idea of how many copies of that book were actually sold.
Now that I am publishing fiction, I have learned that if I want bookstores to order my books to put on their shelves, I have to make my books returnable. My printer, Lightning Source (LSI), offers me two choices as to what happens to books that are ordered and then returned. LSI can destroy the returned books (a painful thought) and I will be charged the wholesale cost of the books. Or, LSI can return the books to me, for which I will be charged the wholesale cost of the books plus a $2.00 per book return fee. I have chosen the second option, thinking I would rather resell the returned books myself than have them destroyed and still have to pay for them.
To me, this seems like an inefficient, wasteful way to do business. Not only does this waste energy shipping millions of books around and storing them, but returned books must be processed by hand to remove stickers and determine whether the book is in condition to be sent back out to stores or must be destroyed.
What will it take to change the returns system? Small independent publishers like me don’t have the clout to start a movement to abolish returns in the book business. Major publishers will need to stop accepting returns and most are afraid that doing so would result in drastic cuts in their orders from bookstores. And large publishing houses can easily pay for their returns on the backs of their bestsellers. However, a new HarperCollins imprint (see my April 10 blog) plans to make its books nonreturnable. We’ll see how this experiment turns out.
Meanwhile, we can spread the word about this antiquated practice. If more people know how much energy is being wasted by this book-return system, maybe there will be some pressure on major publishers and booksellers to put a stop to it.