Working With a Wholesaler

Workshop presented by Boreal Press
UPPAA Conference, April 21, 2001

Rationale of wholesaling your books: single-source ordering and payment system for bookstores, who otherwise would have to deal with thousands of publishers

Wholesaler vs. distributor:
Distribution—includes marketing services. Net purchasing at 35% of retail (average)
Distributor contracts with you for exclusive right to order books from you and sell them to its customers (usually wholesalers).
Sales rep is retained by distributor to present its title list in person to key accounts
Distributor will place your book in databases of its customers
Other marketing services may be available, gratis or for a fee
Regional titles generally are not accepted because the sales volume is too low
Examples: Independent Publishers Group, Consortium, Partners Publishers Group
Wholesaler—only stocks and sells your books, no marketing. Net purchase 45% ret.
Buys books from you (the publisher) and from distributors
Sells books to bookstores (not consumers)
Agreement is nonexclusive but industry etiquette frowns on mixing territories
Examples: Ingram Book Co. (U.S.-wide chain), Baker & Taylor (schools & libraries), Partners (Midwest regional wholesaler), Koen (East Coast regional wholesaler), Alpenbooks (specialty outdoor title wholesaler), New Leaf (New Age specialty title wholesaler)
Your wholesaler mix should include Ingram, B&T, one regional wholesaler close to home, and specialty wholesalers as applicable to your titles

Returns and VOR agreements
Bookstores reserve the right to buy books from wholesalers on a returnable basis—if the book sits on the shelf too long, the store can ship it back to the wholesaler for credit on its next purchase (not cash refund) at the store’s expense
Wholesalers and distributors buy from you the publisher on a returnable basis also
A few scattered returns are generally put back into stock in the warehouse
Heavy returns are shipped back to the publisher at the wholesaler or distributor’s expense
Net purchase price of returns is deducted from money owed to publisher
If a large shipment of your books has been trashed by the bookstore, wholesaler should refuse to accept the return (ask them about their policy on this)
Vendor of Record agreements—policy invented by large chain bookstores to simplify the returns process
No matter which wholesaler the chain store purchased your book from, all returns go to your declared vendor of record.
Example: Ingram is your VOR; a book purchased from Partners is returned to Ingram and deducted from the money Ingram owes you.
VOR status should be declared to Barnes & Noble/B. Dalton (same company), and to Borders/Waldenbooks (same company) by memo. Your wholesaler will provide contact information.
Be careful to select your VOR based on the wholesaler you think will sell the most of your books. Avoid a debit balance with your VOR. If you are very small (one title), stick with one wholesaler.

Consignment sales
All wholesalers and distributors work with small publishers on a consignment basis: They order your book, stock it in their warehouse, take orders, and ship them, but the book is not considered sold until a bookstore buys it—subject to returns.
All wholesalers and distributors pay their consignment publishers on a delayed time scale (usually 90 days end-of-month) to allow for returns to come back
After the initial three-month delay you’ll get paid monthly but always for books sold three months ago
Some wholesalers and distributors reserve the right to withhold a percentage of the money they owe you—to cover expected returns

Ordering procedure
Contact the acquisitions department of the distributor or wholesaler, submit sample book or a mockup (with color sample of cover art) and pertinent information (author, title, ISBN, price, publication date, number of pages, size, case quantity, category, synopsis or table of contents, and your contact information)
Once your book is accepted, it will be registered in their database so they can order from you
Wholesaler/distributor writes a purchase order for each shipment it orders from you, usually sends it by fax. Order quantity should be a multiple of case quantity so you don’t have to repack boxes.
Ship promptly—bookstores often refuse to backorder books
Make sure book title and ISBN appear on outside of each box before you ship (your printer should do this for you), also write PO Number on outside of each box and include a copy of the PO inside one of the boxes.
Ship boxes via UPS Ground or Fedex Ground at your expense
Send an invoice to wholesaler/distributor’s accounting department. Reference the PO number, quantity ordered, your net purchase rate (% of retail), and total net purchase amount. Without an invoice, you won’t get paid.

Consignment report
Your wholesaler or distributor should send you a consignment report within a month of first selling your books and every month thereafter
The report lists sales and returns. Check it carefully against your records.

What can go wrong and how to deal with it
Your wholesaler/distributor needs you, but essentially they are still your customer and therefore hold more than 50% of the power in your relationship with them.
Most of your inquiries will go to the accounting department. Get to know them and be nice to them no matter how much the situation taxes your patience. Most wholesalers are understaffed.
Returned books are trashed and unsaleable—be ready to let small quantities of these go by. Large quantities should be returned to the store by the wholesaler.
Discrepancies between your numbers and theirs—be ready to provide paperwork to back up your side. Keep meticulous records.
In-store book signings—if your book is selling well, the store will order copies from a wholesaler for you to sign. If your wholesaler perceives that your signing will be sparsely attended, it may tell the store to tell you to bring your own copies of the book to the signing and take them away when it’s over—so they don’t become returns.
Abuse of returns policy—your wholesaler/distributor should not ship you a large box of returns on one day and fax you a large PO the next day. Complain as high up in the organization as you can get. (This does not apply to small quantities.)

The future of the industry
Books are physical, not virtual, merchandise, so the system will continue to be a dinosaur. Abolishing the returns policy would open up many options for direct shipment but would also keep lesser-known titles out of bookstores.
Competition from the chain stores has reduced the number of independent bookstores by approximately 50% in the past ten years. The West Coast has held out against the chains most effectively. sought to bypass the distributor/wholesaler system by taking orders and passing them along to the publisher, who would then direct-ship to the customer. Now they own several warehouses and use Ingram as their supplier for titles they don’t stock themselves. “4-6 weeks” from Amazon means they order direct from the publisher.
Single copy sales cost you time and money (postage on one book will be at least $3.00) plus you have to pack it and ship it
e-books are cheaper than print to produce and will take off when reader software problems are resolved. Reader will end up being a multi-use palmtop rather than current specialized e-book reader hardware.
Print on demand: library of CDs and laser technology printing/binding machine. Production costs run $4 to $7 per book but best way to keep low-demand specialty titles in print.
Electronic media will soon outpace print solely for economic reasons but consumer will continue to prefer to read paper—we just might not be able to afford it.

Baker & Taylor:
Partners Book Distributing: 517-694-3205
Boreal Press:

Copyright 2001-2009. All rights reserved. No material on this site may be copied or published electronically or in print
without written permission of Boreal Press Inc.

Comments are closed.