2. Market Overview
— Many publishers and their sales managers use
categories such as the following to evaluate their
sales and marketing:
¡ Bookstores
¡ Other large book buying accounts – e.g. Amazon, Costco
¡ Library / school
¡ Catch-all “Special sales”
— “Customer class” is the most common metadata tag
3. Categories generally considered
“Trade Bookselling”
— Bookstores
— Other large book buying accounts – e.g. Amazon,
Costco
— Library / school
— Generally purchased returnable
¡ Libraries and schools purchase non-returnable when
purchasing directly; but more often they buy through
wholesalers, who are returnable accounts
4. Generally considered “Special Sales”
— Can be anything and everything else
— Generally purchased non-returnable (but at higher
discounts)
Without breaking it down further, this
category is hard to target, difficult to market
to, and tough to build revenue projections
from.
5. Where potential book buyers shop…
— Look at the entire range—
¡ Why they shop where they shop
¡ What they expect to find there
¡ What would drive them to purchase your book there
— Publishers should review their sales strategies—
¡ Do they match where their customers will be shopping?
¡ Are there markets that will repay more effort?
— Smaller publishers who work within a niche can do
much better in special markets than large general
houses, when they understand their customer focus
7. A Note About Statistics
— Sources for this breakdown: Publishing for Profit, Thomas
Woll; reports of the Book Industry Study Group; the
PubWest Book Statistics (Huenefeld) reports; and my own
twenty years of bookselling experience.
— This generalized statistical breakdown of bookselling is of
the industry as a whole, not any single individual publisher;
also, this is in flux, changing over time.
— This breakdown is of physical books and does not include
digital editions
8. “Less than half of all books are sold in
bookstores”
Percent$of$sales$
2%$
3%$ 12%$ Bookstores$
7%$ 48%$ General$retail$$
5%$ Specialty$retail$
Gi4$retail$
23%$ Ins7tu7onal$
School$&$Library$
Direct$to$consumer$
9. Retail Booksellers
— National chains: Barnes & Noble, Borders (defunct)
— National online booksellers: Amazon, BN.com
— Regional chains: Books-a-Million, Hastings
— Independents: Powell’s, Elliot Bay
— 90% or more of sales are coming from books
¡ May also carry magazines, stationery, toys, calendars, not to
mention coffee
¡ This segment is in flux from bricks and mortar to online
¡ Although Amazon has no physical store, I place it here because
it has similar market forces, supply chain, and competes for its
customers with traditional book retailers
10. Bookselling is a Specialty Retailing Category
— In general, every large specialty retail category
supports national chains, regional chains,
independents, and in some cases, subspecialty retail
categories, as well as its own wholesalers and
distributors
¡ National chains can be central buying office, or franchises (e.g.
Little Professor)
11. Retail Bookselling Subspecialties
— College bookstores (trade book sections)
— Religious booksellers
— Specialty retail bookstores:
¡ Children’s, Mystery
¡ Others subspecialties listed by the ABA: African-American, Art
& Architecture, Feminist and LGBT, Travel, Mind/Body/Spirit,
Sci-Fi, Science/Tech/Prof, Regional
— Traditional book clubs
¡ Book-of-the-Month, Literary Guild; now almost defunct
— Some mail-order catalogs
¡ (e.g. Edward R. Hamilton Booksellers)
12. Wholesalers (primarily books)
— Wholesalers who supply these retailers
¡ National: Ingram, Baker & Taylor
¡ Regional: Partners West, Books West
¡ Specialty: SPD, Christian Book Distributors
13. “I’ll get it at Costco” – General Retail
Percent$of$sales$
2%$
3%$ 12%$ Bookstores$
7%$ 48%$ General$retail$$
5%$ Specialty$retail$
Gi9$retail$
23%$ Ins<tu<onal$
School$&$Library$
Direct$to$consumer$
14. General Retail with Trade Book Sections
— Not solely in the book business, but enough of a
selection that they are thought of as a source for
books by the general public. Focused on bricks and
mortar (although Amazon could be categorized here)
— Warehouse clubs: Costco, Sam’s
— Discount and department stores: Target, Wal-Mart,
Fred Meyer
— Grocery & drug stores
— Newsstands, airports, terminals
— Military PX
15. Retailers with book sections
— Same dynamic as any large retail segment: national
chains, regional chains, independents, subspecialty
retailers, distributors
— National: Costco, Target
— Regional (to some degree): BJ’s, Fred Meyer
— Specialty: newsstands, airports, military. Kmart and
Wal-Mart: primarily children’s books. Walgreen’s:
romance
— Independent “general retailers” are almost defunct
¡ An example would be a small-town general store
16. Dynamics of General Retail
— These retailers have a book selection extensive
enough that the some consumers think of this as a
destination store for books, generally, across many
categories (or the categories they’re interested in)
— For this reason, these accounts have book buyers (or
a designated buyer who works with a book
wholesaler) – either way, some expertise at
merchandising books
— Thus, not usually categorized as special sales
17. Wholesalers to General Retailers
— National: Levy, Anderson, News Group, BTMS,
Hudson Group
¡ Extensive consolidation here over the last two decades
— Regional: American West
¡ Regional can mean book content or market coverage
— Specialty: Military suppliers
General retailers often prefer to work with wholesalers; for
any business, holding down the number of vendors
generally lowers expenses
18. Wholesalers vs. Distributors
— Purchasing decision may be made by wholesaler –
distribution outlets, channels, pockets, displays may
be controlled by this decision maker
— When the wholesaler controls the decision making
for retail placement, it should be considered a
distributor
— Buyers working in tandem and in layers, one at the
retailer, one at the distributor
— True demand vs. promotional opportunities; push
vs. pull
21. Retailers with Focused Content
— Specialty retailers who may or may not carry some
books, but have a dedicated clientele who expects to
find all support for their interest in this venue
— The #1 category most frequently called “Special
Sales”
— Sales to this market segment can be kept in-house by
specialty publishers even though they work with
master distributors (PGW, IPG, NBN, etc.) for their
trade distribution
— Retailers may expect higher margins, in line with
their other merchandise
22. Examples of retailers with focused content
not necessarily books
— Home improvement
— Outdoor recreation
— Body/Mind/Spirit
— Craft and hobby
— Pets; Farm & seed
— Biking, sporting goods
— Teacher supply
— Cooking
— Gardening
— Art materials
— Toys
— Office supply
Almost any niche publishing program can find a matching retail channel
23. In specialty retail, books must add to the retail mission
True-life examples:
— Home repair: books can sell other, higher-priced
merchandise
¡ Home Depot eliminated book sections in Mar. 2012
— Pet care: some book buyers, but few repeat
purchases
— Sewing machines: books move some merchandise,
but may detract from bigger sales opportunities
— Automotive: repair books would detract from retail
focus
Tip: look for retailers who offer classes: teachers = authors
24. Wholesalers and Distributors
— Retailers more often buy through wholesalers in this
channel
¡ Easiest to have single source for all books
— Purchasing decision may be made by retailer or by the
distributor
— These wholesalers may focus on books for this content area,
or focus on this content in addition to other merchandise
— Distributor may focus on subspecialty
— Wholesalers who focus on a channel and carry books as a
sideline will often demand higher margins
— Major vendors sometimes start carrying books by accident,
become wholesalers by default over time
25. Example of retail channel with focused content: Crafts
— National: Michaels, Jo-Ann, Ben Franklin
¡ Chains can be central buying office (Michael’s) or
franchises (Ben Franklin)
— Regional: A.C. Moore, Hobby Lobby
— Independents
— Sub-specialty: fabric, yarn, scrapbooking
— Subject-specific mail-order supply catalogs
— Subject-specific websites
¡ May be paired with a retailer or a mail-order catalog, or
stand alone
— Subject-specific book clubs (Crafter’s Choice)
26. Wholesalers in Crafts
— Two out of three national retailers purchase through
distributors
— Books in different areas in store merchandised by
competing wholesalers
— Distributors: BTMS, HDA
— Distributors who focus on craft books, in addition to other
book subjects (HDA, Select)
— Wholesalers who focus on a specialty, carrying books in
addition to other category merchandise (Checker, Brewer)
— Wholesalers who focus on subspecialty (Crafts Americana,
Royal: fabric, yarn)
27. Specialty Retail Selling Dynamics
— May prefer to work with distributors (cost vs. selection)
— May be opportunities to distribute regionally (by topic or
author); may be opportunities to test locally first
— Seek out commission reps who carry merchandise into the
channel
— Create rack opportunities (where do books find a home
within this environment?)
— Understand planograms and change-outs as well as
category management
— A competitor may be the category manager (e.g. Leisure
Arts in crafts)
28. More Specialty Retail Selling Dynamics
— Look for the same patterns as in bookselling: national
chains, large chains, independents
— Home office buying vs. purchases at store level (franchise
stores)
— Look for subspecialties, look for independents
— Look for the other retail opportunities within this channel:
mail order catalogs, book clubs, specialty websites
— There will almost always be a specialty wholesaler
— There will generally be a specialty trade show for the
category
30. Gift Retail
— Very different dynamics than Specialty Retail,
though often the two are conflated in selling,
marketing, and budgeting
— Here, books are unexpected surprises, adding to
the merchandising mix
¡ This is different than a general retailer such as Target, where a
customer goes to shop the book section
— Books as merchandise
— Stand-alone, single title opportunities
— Merchandising can be key: quirky counter displays,
‘store-within-a-store’, etc.
31. Retailers with book opportunities
— Department stores (national, regional, local)
— Gift and card stores (chains – Hallmark, Cracker
Barrel -- and independents)
— Housewares and lifestyle stores (Urban Outfitters,
Spencer Gifts, Anthropologie)
¡ At some chains, books have become such a successful part of
the merchandise mix, that consumers now expect to find them
there. Still, not a true selection by subject, just an edited
collection
— Apparel
— Discounters (Burlington Coat Factory)
32. Gift sales – dynamics
— Books of general interest reaching the general public
— Impulse buys; humor and quirkiness
— Purchasing decision generally made by retailer, not a
distributor
¡ Not enough book buying to warrant using wholesalers
— Buying direct, may ask for higher margins
— Retail strategies include pre-packs, merchandisers
— Testing is a possibility
— Commission groups and gift shows (local)
— Specialty retail and gift retail can use the same non-
returnable discount schedule
33. Two Examples
— Pottery Barn
¡ No books at one time
¡ Then, branded books only; proprietary publishing (as all their
merchandise is). Pendulum swung to a few books stocked
¡ Enormous opportunity, almost impossible to get into
— Restoration Hardware
¡ Originally had an extensive home décor and repair book
section as part of its retail mission
¡ As their customer profile changed, this section was de-
emphasized; changed from a specialty retailer into a gift
retailer
¡ Throughout the store, books now help tell their retail “story”
35. Institutional Sales:
opportunities for bulk, non-retailer purchases
— Should be kept separate from school (classroom)
sales, as marketing dynamics are very different
— Books for premiums or giveaways
¡ Someone who is not the consumer is making the buying
decision
— Author’s own purchases for non-retail situations
(training, teaching)
— Corporate training programs
— Corporate, institution, or government gifts
— Other situations where a decision-maker is buying
books in bulk for a non-retail use
36. Real-life examples of institutional sales
— Author purchase, giveaway to lecture attendees (biography)
— Corporate new employee orientation classes (business)
— PBS premium with program tie-in (performing arts)
— Office of the Mayor presents for visiting trade delegations
(photography)
— Real-estate sales office thank-you baskets to new
homeowners (regional interest)
— Holiday gifts for sales force (self-improvement)
— Cruise line “bon voyage” gift in each stateroom (travel)
37. Institutional Sales Strategies
— Brainstorm early as possible in book life-cycle, pre-
printing
— Reach out to appropriate corporate, educational, government
possibilities
— If possible, offer to customize, personalize, re-bind, excerpt
or abbreviate content
— Inquiries on smaller orders, quote a standard discount
— No need for a tiered discount schedule; their quantities won’t be price
sensitive
— But for large orders, be flexible, price to make the sale
and make a profit
38. Institutional Sales Strategies, continued
— Weigh time spent against potential sale (opportunity cost)
— Will this be repeat business? Generally, not, though the
occasional exception can be very profitable
— Even in this area, there are wholesalers (e.g. The Book
Company, Delray Beach, FL) commission agents (The
Jenkins Group) and trade shows (PPAI)
39. Market Segments and Digital Books
— Book retailers: YES
— General retailers: Not yet
— Specialty retailers: Not yet
— Gift retailers: No
¡ Though, note the Starbucks free download cards for iBooks
— Institutional sales: Generally, no
— School and library: Growing
— Direct to consumer: YES
