Alfred Knopf coined the classic bon mot about returns in the book business: “Gone today, here tomorrow.” Having expended some of the best years of my career railing – in vain – against the ruinous practice of returnability in the book industry (See A World Without Inventory, Part 1 and Part 2), I greeted the advent of e-books with the ecstasy of a pilgrim beholding the shrine he has sought all his life.

But after extolling the zero returnability of e-books I am slightly abashed to report that -  at one venue at least -  e-books are indeed returnable for full refund, no questions asked.

How abashed am I? 1.15330021291%  That happens to be the rate of returns viewed on the retailer record of one publisher’s  sales database over a one month period.  The retailer was Amazon Kindle.

A 1+% return rate is infinitesimal compared to that of the conventional trade book industry, where returns of 50% are not uncommon and even 75% is not unheard of. So we are definitely not complaining.  But we’re curious to know how e-book returnability works and who besides Amazon offers it.

To answer the second question first, it is not easy to ascertain the returns policy of Amazon’s rivals, but from what I have been able to ascertain, Barnes & Noble, Random House, Wiley and Simon & Schuster explicitly prohibit return of e-books. The policies of Kobo, Sony and Apple are not clear.

Amazon’s policy is stated clearly on its website:

Content you purchase from the Kindle Store is eligible for return and refund if we receive your request within 7 days of the date of purchase. Once a refund is issued, you will no longer have access to the item. To request a refund and return, click the Customer Service button in the Contact Us box in the right-hand column of this page to reach us via phone or e-mail. Please make sure to include the title of the item you wish to return in your request.

No strings seem to be attached to Amazon’s policy,  But I wondered why anyone would return an e-book.  Fantasy author Lindsay Buroker speculates that customers simply order the wrong book. “It’s very easy to buy ebooks (one-click) straight from your device,” she writes. “The Kindle also promptly asks you if it was a mistake and you want to return the ebook. My guess, based on the fact that my returns usually pop up simultaneously with corresponding new sales, is this is what happens most of the time.”

Other reasons include excessive typos, formatting issues, and the old standby: someone just didn’t like the book. The latter may not be as prevalent as you would imagine because of look-inside-the-book sampling that helps consumers judge a book before clicking the Buy button.

And of course, some people may download the book, read it before the seven day deadline expires, and return it.  The low returns rate suggests either that only a tiny percentage of Amazon customers are moochers, or more of them would be if they could only read faster.

However negligible Kindle returns may be, accepting them is good policy and another example of Amazon’s customer-friendly approach to retailing.

Richard Curtis

In connection with our posting (see Repjep) about the endangered species called traveling sales reps, we’ve just come across a moving open letter to publishers on the subject, issued by the New Atlantic IndependentBooksellers Association (NAIBA). We feel it’s worth reprinting in full.

An Open Letter to Publishers from NAIBA

We are alarmed with what appears to be a trend in the sales division of publishers – the removal of field sales reps to independent bookstores. This draconian move against our bookselling segment will be responsible for the disappearance of book culture.

Field sales reps are a crucial part of our business. Each regional independent booksellers association and Publishers Weekly honors an outstanding field rep each year. We can’t think of another publisher position that gets this recognition. We devote countless hours at conferences refining the sales rep/bookseller relationship. They are that crucial to us. Restricting field reps to large stores will give publishers a skewed view of what is a very diverse world –independent bookselling.

Sales reps take the time to know our stores, what our customers like, and what is on our shelves. They are the industry worker-bees, travelling the region, taking ideas and trends and pollinating other stores. We learn about other stores from them, what others are reading and loving; what is selling; marketing tips; event ideas; what the publisher is doing; and what authors have books coming out in the next season. They make fans for authors out of our frontline booksellers. They cut through the catalogs to make sure we carry what we’ll be able to sell, and their endorsements are why we buy what we might have ignored. These reasons are why cuts in field sales reps devastate us. Have you really thought about what this stricture will mean to you? Fewer books sales.

Without a doubt, we are not ordering as much through telemarketing. We are definitely not focusing on your backlist through tele-sales, and we definitely miss titles from the frontlist. We also don’t buy as much direct, which makes independent bookselling a less profitable business. The vicious cycle is that we buy less because we don’t have sales reps, and then you devalue our business because we aren’t buying as much as we used to.

We understand the corporate need to save money. There are more efficacious and less exclusionary ways to cut your budgets. You know what they are because independent bookstores have been telling you what they are for years. Cut multiple ARC mailings. Do away with promotional gimmicks that go from mailbox to garbage can. Consider publishing fewer titles, fewer hard covers, fewer copies. Take a hard look at celebrity advances.

We exist to sell your books, those unique and hard to place titles, not just the established authors. Field sales reps are the tools we need to do that for you. As much as you would like to think a tele-salesperson is doing the same job, you are sadly mistaken. A field sales rep is far more than a person filling in an order form. Don’t cut our lifeline to your books.

Sincerely,

The NAIBA Board of Directors

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Diesel-eBooks.com Announces Direct Partnership with Richard Curtis’ E-Reads

FOR IMMEDIATE RELEASE: June 1, 2011

Contact: Kelley L. Allen
Phone: (908) 294-1818

Leveraging the power of Diesel’s new Web store platform, E-Reads has designated Diesel-eBooks.com its preferred eBook retailer.

Richmond, VA—Feb. XX, 2011 – The Diesel eBook Store , one of the world’s largest independent eBook stores, today announced that it has entered into a strategic alliance with E-Reads, a leading publisher of quality fiction and nonfiction reprints. Richard Curtis, founder of E-Reads and president of a leading literary agency, is a highly respected and innovative figure in the publishing world.

As part of the agreement, Diesel-eBooks.com will be the preferred retailer of E-Reads’ extensive list of titles on the E-Reads.com’s site. All E-Reads eBooks will be sold without encryption.

E-reads has an extensive catalog of 1200 eBook titles by renowned authors in a variety of genres including romance, science fiction, fantasy, horror, thriller Authors include Hannah Howell, Harlan Ellison, Greg Bear, Robert Silverberg, Dan Simmons, William C. Dietz, Janet Dailey, Jennifer Blake, Alan Dean Foster and John Norman, to name just a few.

“Diesel has soared to a prominent place among e-book retailers and we‘re very gratified to cast our lot with them,” said Richard Curtis, President of E-Reads.

“E-Reads is an industry pioneer and Richard Curtis has always been a strong voice for eBooks. We are so thrilled to have them on board as a direct publisher,” said Scott Redford, owner of Diesel-eBooks.com

As part of the deal, a new proprietary PubDesk interface, through which the publisher can access its inventory, run reports and modify its metadata, has been created and will launch shortly on Diesel-eBooks.com.

Diesel-eBooks.com launched its brand new eBook retailing platform in December 2010 and is unique in the marketplace for their expanded categories and their ability to host customer created bundles. Their new site also boosts a suite of new features such as the “Deal of the Day”, social networking , video integration, access to over two million free eBooks via partnerships with Google and Smashwords and a new and improved search engine.

About the Diesel eBook Store
Launching in December 2004, Diesel-eBooks.com is one of the world’s largest independent eBook stores, offering over 2.4 million original eBook titles including hundreds of exclusive cyber bundles for deep discounts. Based in Richmond, Virginia, Diesel-eBooks.com sells titles from hundreds of publishers including Harlequin, HarperCollins, John Wiley & Sons, Macmillan, McGraw-Hill, O’Reilly, Penguin, Random House, and Smashwords and in multiple formats including ePub, Microsoft Reader, Mobipocket, and Palm/eReader and PDF for all eBook devices and eReading hardware. Forty categories and 2,700 sub-categories mean customers find it faster at Diesel eBooks.

About E-Reads
Founded in 1999 at the dawn of the digital era by renowned literary agent, Richard Curtis, E-Reads™ is the oldest independent e-book publisher in the field and an innovative leader in the modern book industry. Their mission is to bring out-of-print books back in electronic and print formats and create an independent e-book market for authors.

Leveraging the power of Diesel’s new Web store platform, E-Reads has designated Diesel-eBooks.com its preferred e-book retailer.

The Diesel eBook Store , one of the world’s largest independent eBook stores, today announced that it has entered into a strategic alliance with E-Reads, a leading publisher of quality fiction and nonfiction reprints. Richard Curtis, founder of E-Reads and president of a leading literary agency, is a highly respected and innovative figure in the publishing world.

As part of the agreement, Diesel-eBooks.com will be the preferred retailer of E-Reads’ extensive list of titles on the E-Reads.com’s site. All E-Reads eBooks will be sold without encryption.

E-reads has an extensive catalog of 1200 eBook titles by renowned authors in a variety of genres including romance, science fiction, fantasy, horror, thriller Authors include Hannah Howell, Harlan Ellison, Greg Bear, Robert Silverberg, Dan Simmons, William C. Dietz, Janet Dailey, Jennifer Blake, Alan Dean Foster and John Norman, to name just a few.

Read the full announcement here.

Booksellers usually divide the year into three seasons: spring, fall and Holiday. But you may not know about a fourth one, and maybe it’s just as well, because you’re going to get good and depressed when we tell you about Returns Season.

Returns Season “comes near the tail-end of the fiscal year, when we can delay the inevitable no longer and have to send back books which we’d been holding on to as long as possible for sentimental reasons; books which ‘should’ sell,” blogs Charlotte Ashley, who we gather is a bookseller.

The shipping of books back to publishers for credit towards  new purchases represents the triumph of market reality over hope. “After all,” writes Ashley, “our job isn’t to snobbishly insist readers should be reading one thing or another, it’s to provide them with a good choice of things they might be interested in. So why, after years of failing to sell some of these books, do we keep ordering them? Optimism, I suppose.”

So? What kinds of books will be consigned to ignominy?

Young Adult Literature Not Featuring the Occult (“good, insightful plain fiction aimed at young adults? Forget it. Not that that stops us from filling the shelves with Glen Huser, Polly Horvath, Alan Cumyn, Tim Wynn-Jones and Paul Yee. We just have to send them all away again at the end of every year.”)

Chinese Literature (“Oh man, China. Its day in the literary limelight has not yet arrived. Gao Xingjian won the Nobel prize in 2000, the first Chinese writer to do so, but I defy you to name offhand a single book of his.”)

Post-Soviet Russian Novels (“I think I’d be safe in saying that post-soviet Russian novels are being completely ignored by Western media, critics and readers.”)

NYRB [New York Review of Books] Classics (“We do tend to order absolutely everything they publish because their books are so damn good, so when it comes time to return and we’re sending back most of them, it looks particularly bad.”)

If it’s any consolation to retailers, they should remember that those books are going back to publishers, who will now have to refund money they had hoped they would be able to keep. Who can forget publisher Alfred A. Knopf’s rueful comment about returns: “Gone today, here tomorrow.”

Misery loves company. So, to honor the fallen during Returns Season, let your local booksellers know your heart goes out to them.

The Sadness of Books We Can’t Sell

Richard Curtis

The Digital Revolution has claimed many brick and mortar victims but none so formidable as Barnes & Noble.  The world’s largest bookstore has put itself up for sale.

To understand why you only have to weigh B&N’s capitalization of $950 million against the capital value of Amazon.com: $55 billion, according to Wall Street Journal‘s Jeffrey Trachtenberg and Dennis K. Berman.

“The sales process won’t mean much for consumers right away,” the WSJ journalists write, “but a new owner may have a different strategy, potentially trimming the number of outlets as profits slide. Over the past three years, Barnes & Noble’s annual profits have slid from $135.8 million to $75.9 million to $36.7 million.”

Though authors and consumers may feel warmly towards the book chain, whose stores often serve as community centers, not everyone will shed a tear.  Barnes & Noble’s superstore-building rampage in the 1990s drove innumerable local independent bookshops out of business.  Its predatory business practices, such as extracting big fees from publishers for stocking books in favorable positions in the front of the store, drove cash-poor small publishers into the arms of a handful of major houses.

So, if there are fewer independent bookstores, fewer independent publishers, and fewer midlist authors in 21st century publishing, we can look to Barnes & Noble as a major contributor. The Riggio brothers will walk away wealthy beyond our dreams of avarice, but they will step over many ruins on the way to the bank.

Read details in Barnes & Noble on Block

Richard Curtis

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the Wall Street Journal .

The Huffington Post published a blog by independent publisher Jennifer Havenner with what she calls a “magical solution” to the book industry’s woes:  eliminate book returns.  Here’s how she framed it:

“In a desperate industry trying to scramble together 1% growth after being smacked with the Great Recession, the idea of saving the average publisher $40,000 every year should be a popular one. Add to that a 40% reduction of the industry’s carbon footprint, amounting to the carbon output equivalent of 2 million mid-sized cars, the saving of 60,000 acres worth of trees every year, and an additional $3 billion in profit industry-wide. What is this mystery magical solution?

“The elimination of book returns….By flipping one switch, the industry could make billions, and begin to reverse the environmental damage caused by wasteful practices. The whole industry needs to be on board for a true financial and environmental impact. Looking at the numbers, I see no reason why bookstores and publishers alike wouldn’t jump at the chance.”

Flipping a switch. It is indeed a magical solution, and a brilliant one.  It was brilliant when it was proposed thirty years ago. It was brilliant when it was proposed twenty years ago, ten years ago, and last year too. Everyone in the publishing industry thinks it’s brilliant.  But no one has lifted a finger to do anything about it, even though the returns model has driven countless publishers into merger, acquisition or bankruptcy and left the survivors no wiser or better able to control the hemorrhaging of cash.

And now it doesn’t matter, because a new on-demand business model has begun to replace the old one and in time will prevail. You can read about it in Publishing 3.0: A World Without Inventory Part 1 and Part 2

The time for magic is gone.  The old world of publishing is addicted to returns, and its wise heads never found the courage to break the addiction.  End returns?  A great idea whose time has gone.

Richard Curtis

As we recently wrote, today’s publishing model based on the returnability of unsold books is no longer viable. (See A World Without Inventory Part 1 and Part 2). The digital revolution has created a highly successful, efficient new model relying on pre-ordered and prepaid books printed on demand.

You would therefore think that we ardently advocate doing completely away with the old system. In fact there are many compelling reasons why we would hate to see that happen.

Publishing pundit Mike Shatzkin has put his finger on them. In his blog Shatzkin offers several cogent arguments, and we urge you to read them. In essence, 1) overprinting can actually be profitable for publishers and authors even with high returns; and 2) without return privileges, publishers might simply decline to publish many books that they now accept.

Shatzkin gets no argument from us.  But it’s worth reminding readers that in the waning years of the 20th century the returnability privilege was manipulated by chain store operators who discovered that they could overorder without penalty, use returns as a form of currency to order more books, and delay settlements to publishers.  The havoc created by this abuse has been incalculable, driving cash-starved publishers into mergers with or acquisition by bigger publishers. The roll call of wonderful houses that succumbed is sad, and it is arguable that the only thing that put the brakes on this predatory behavior was the advent of a powerful rival – Amazon.com.

So yes, we’d love to see a reasonable, fair and reliable retailing model based on return privileges.  But e-books and print on demand now have an increasing grip on book retailing and, in Thomas Wolfe’s immortal phrase, you can’t go home again.

Richard Curtis

Do you think there’s enough confusion and acrimony surrounding the “agency” e-book retail model (see Apple Promoting a New (and Radical) Business Model for Selling E-Books?). If you don’t, there’s a new issue heading your way that should satisfy your hunger for controversy.

Michael Cader, influential founder of online book trade newsletter Publishers Lunch, has asked who is responsible for collecting and paying sales taxes on e-book sales?

If you didn’t know that such taxes are payable you’re not alone.  Under the system in effect until the “agency” model was introduced, retailers were responsible for collecting any sales taxes that might be charged on e-book sales. However, under the Apple model, retailers become in effect agents for the publishers, placing the burden of collection and reporting on the publishers’ shoulders. It’s a burden that could seriously hobble a lot of publishers when they have to fill out tax forms in dozens of state venues.

Apple has authorized a number of companies like Scribd, LibreDigital and Ingram to serve as authorized “aggregators” who will in effect process publisher content and deliver it to Apple for a fee or commission. Will collection of sales taxes be part of their services? The answer is murky. “So far,” says Cader, “the aggregators we have spoken to have different understandings of what obligations if any they have in tax reporting and collection.”

Stay tuned for more about this matter, which is certainly going to heat up.

The only certain things in life are death and taxes.  Unless the this matter is addressed cleanly and expeditiously, death is going to begin to look like a viable alternative for publishers.

Richard Curtis

If you’ve been reading our monthly postings of e-book retail sales bulletins provided by the International Digital Publishing Forum, you are aware that as the numbers doubled, then tripled, and most recently quadrupled those of the prior year, the stridency of our prose has progressed deeper and deeper into the purple spectrum.  Right  now we’re tapping into our reserves of hysteria and if the curve gets much steeper we will have to be forcibly restrained. By the opposite token, if the curve flattens even a little we may climb out on a ledge – we’re that spoiled by unmitigated good news.

Will the joyride ever end?  Digital pundit Mike Shatzkin has dared to ask the question.

Though he says “Your guess is as good as mine,” in fact Mike Shatzkin’s guesses are far better than ours.  But he reminds us of the fundamental truth that nothing lasts forever.  There has to be a saturation point.  But what is it, when will it come, and what factors will make it happen?

The prospect for the near future looks rosy, in good measure because there are so many new platforms and devices coming on stream such as Copia, Blio, Apple’s iPad, Google Editions and a clutch of e-book readers with new features including color, larger screens, and touchscreen capability.  And we know that Amazon will counter competition with a host of Kindle upgrades and improvements.  So, says Shatzkin, the next year will see a continuation of robust retail growth which he puts “conservatively” at 3.5%. That means that “the e-book minimum expectation by next Christmas would be between 15 and 20 percent of the sales of a new title.” Then what?

“And then,” says Shatzkin, “it can’t really continue the same growth rate the following year because that would take us to a great majority of books read being e-books. And I don’t think you’ll find anybody expecting 60% or more e-book penetration in two years.” The saturation point? “It won’t start slowing down until e-book sales are 20-25% of what a publisher expects on a new title.”

He expects that topping-out moment at the end of 2012.

Read Ebook growth continues to accelerate; how long can this go on? and decide if your own guess is as good as Mike Shatzkin’s.

Richard Curtis