Robert S. Miller, President and Publisher of HarperStudio, the HarperCollins imprint that recently announced a nonreturnable distribution arrangement with the Borders bookstore chain, has responded to Richard Curtis’s post, “Is There a Better Way to Compensate Authors?” It’s reprinted in its entirety below, and we invite authors and publishing people to comment.

Just Desserts: Going Non-returnable in the Search for a Bigger Pie

I read Richard’s blog entry yesterday about returnable/non-returnable with interest, since—as Richard mentioned—one of HarperStudio’s goals is to go non-returnable. It is indeed a tough puzzle to solve, one that has frustrated previous efforts. But I’m hopeful that we’ll at least make some progress on this front. As Richard mentioned, Borders has already agreed to give our non-returnable terms a try, and several other large accounts have expressed interest as well, though they prefer to do so in confidence. Many others—especially small independents—can’t afford the risk of increasing their unsold inventory, so we’re offering all booksellers a choice between the traditional returnable terms and pretty generous non-returnable terms. But we’re encouraged by the response so far.

Richard points out that the difficulty in previous attempts stems from the publisher’s inability to be generous enough in their non-returnable discount to make it worthwhile for booksellers. This is where the hope lies in our model, since we are working on a 50/50 profit share with our authors, not a royalty. So unlike in the Fawcett example, where the publisher offered its authors a choice of royalties, we are able to offer the deal that makes the most sense to booksellers without needing to adjust our royalties at the other end. Our calculations show that even at an aggressive discount for booksellers who go non-returnable, we’ll end up with a larger profit to share with our authors, since we’ll be reducing wasted printing and shipping of unsold copies.

Our hope is that at the end of 2009, the booksellers who have gone non-returnable with us will see that they have been more profitable—and more efficient—by doing so, and that we can use their example to convince others to give it a try. And we’re convinced that the more we can get booksellers to go non-returnable, the more money we’ll make for our authors, in spite of the discount. It may seem counter-intuitive to suggest that we can make more money for booksellers and authors at the same time, but remember that our business currently has an average 40 percent return on new adult hardcovers; the more we eliminate that waste, the bigger the pie grows, and the more pie there is for us all to share.

Robert S. Miller
President and Publisher
HarperStudio