A Hard Cover Is Good to Find

New Developments in Bookstore Stocking Strategy

Good morning and welcome to last month’s publishing news.

There are a handful of reasons I didn’t put this article out last month. Among those reasons, the main one is I was waiting to see if any additional statements or information came out from involved parties (authors, publishers, Barnes & Noble); another big one is I already had a bunch of articles written and I was taking a break.

News isn’t like bread, it doesn’t go stale. At least not if it’s real news, like the kind based on facts. If it’s Fox News—that doesn’t go stale either. It’s like bread made with the chemicals in yoga mats. You know, not really “bread.” Anyway, news can become old, as in, it’s no longer the newest news—nobody cares about hardcover book stockistry right now, the queen is dead!—but it’s still true, and if anything in the fullness of time we come to understand it better.

If you don’t have your thumb on the pulse of issues in publishing it might be new news to you anyway. Pretend it’s fresh, like a brand-new yoga mat right off the production line.

You may have heard the furor, about a month ago. Twitter was all atwitter (I’m sorry) with it and it made some of the mainstream news outlets, too. The talking point going around was this: Barnes & Noble (henceforth, B&N) will no longer be stocking hardcovers from debut authors; going forward, they’ll only stock hardcovers if there’s a proven track-record of sales.

I’m going to do some unpacking of that statement, and then elaborate with some of the additional knowledge I’ve assembled since this story cracked open in mid-August, and then I’m going to devote the balance of the article to a breakdown of how we got here, who it’s bad for, why it’s bad for them, and most important, how publishers—not bookstores—can rethink their model to get with the times.

What actually happened? Some authors, notably Bethany Baptiste and Kelly Yang, realized that their new books (and those of other authors they know) were not being stocked by B&N. Discussion among authors and their publishers about this situation revealed that a number of independent sources around the publishing industry (editors, authors) had been told, by one B&N-affiliated person or another, that B&N would no longer stock hardcovers without evidence that the hardcover was likely to sell well. 

Evidence might include strong preorders or an author with previous bestsellers under their belt. For debut and midlist authors (midlist means authors who sell steadily but are not top- or bestsellers), that means their hardcovers will no longer be stocked by B&N. Instead, B&N has elected to focus on paperbacks, which tend to be better sellers.

Additional clarifying information I picked up after the initial fervor died down indicates that the affected demographic is children’s and middle-grade (MG) fiction, not all books. Whether B&N is hoping to slim down their kidlit and MG sections to make room for more books of other types, or whether this is a canary-in-a-coal-mine situation and they’re testing the waters to try this with other demographics, I can’t say.

Early information indicated that B&N would only stock each publisher’s two strongest (kidlit and/or MG) titles per season, but B&N denies this is part of the strategy. For more detail on the situation and B&N’s response, I recommend this recent NewsNation article on the subject. I also recommend this Publishers Weekly article on the topic that includes comments from B&N CEO James Daunt.

It’s probably obvious right off the break that this is bad for authors with new books coming out: Particularly, as I already mentioned, it’s bad for debut authors (no sales track record) and bad for midlist authors (no bestsellers under their belts). If your book isn’t physically in the bookstore, that’s not good. That’s why a lot of us would prefer to publish traditionally, right? To see our books in the bookstore? I mean, if we just wanted them for sale on Amazon and B&N online, we could get that by self-publishing.

It’s particularly bad for these authors due to the way the publishing industry releases books and then measures their success. As a reader, you’re likely to have noticed that print books tend to come out in hardcover first and then, six months or a year later, in paperback. If you are my age and remember the dark days before the advent of the e-book, then you remember hotly anticipating a new book and deciding whether to spring for the pricey hardcover, wait for the paperback edition, or put yourself on the waitlist at your local library.

Let’s talk about Why It’s Like This™ before I bring e-books into the discussion. Publishers, why are you like this? (If you feel like hopping in the Wayback Machine I touched on this topic once before in Putting a Price on Words.)

People, other than collectors, would rather have paperbacks—right? They’re cheaper, they’re easier to take to the beach or stuff into your purse or laptop case. Why do publishers put out the hardcover first and delay the paperback till later? You probably have an inkling that it’s about money, and you’re right. 

The hardcover edition of a book usually costs significantly more than the paperback, but the gap in manufacturing cost is surprisingly narrow if you’re printing a significant quantity of books. It does not cost considerably more at the printer to manufacture a hardcover than it does a paperback, not in the grand scheme of how much a book costs to manufacture and how much you sell that book for. Publishers make more money by the unit on the hardcover than they do on the paperback—and so do authors. Royalties are usually higher for the sale of the hardcover (but fewer units will move over time) and lower for the paperback (but more units will move over time if the hardcover did well).

The idea is that those people who can’t wait for the paperback (the reviewers, the diehard fans, the people with money to throw away, and so on) will spend more to get the hardcover up front, and those folks will generate buzz and reviews that will bolster the success of the forthcoming paperback. Traditionally, the success of the hardcover was the bellwether the publisher used to gauge whether to go on to a paperback printing and how large a paperback print run to do. By the way, you know who loves hardcover books? Libraries. Hardcovers are more durable and last a lot longer under heavy use. Libraries buy up a lot of those hardcovers (sometimes there’s a special library edition with extra-durable binding, but not always).

But now e-books are in the mix. E-books tend to come out day-and-date with the hardcover edition of the book. And the e-book is often priced the same as the paperback. This means readers no longer need to choose between the expensive hardcover or waiting for the less-expensive paperback to drop months later—they can get a less-expensive edition on day one if they select the e-book.

Now: I realize there’s a belief that e-books are somehow “free” for the publisher to put out, that they don’t cost the publisher money to manufacture and so any revenue from e-books is “pure profit.” This is completely untrue. While it’s true that e-books don’t have an attached unit manufacturing cost, they’re actually the least profitable edition for the publisher because the retailer (usually Amazon) takes such a large bite out of the price and because the author makes a higher royalty on the e-book than on the paperback.

When a publisher projects the contribution margin for a book—that is, the selling price per unit minus variable cost per unit—they base that projection on expected sales of all versions of the book (paperback, hardcover, e-book) over a certain period of time, for instance, three years. If I’m the publisher and I’m trying to figure out whether a book is going to be profitable, I have to look at how many hardcovers and how many paperbacks I think I’ll be able to sell year one, year two, year three, at their different unit prices, with their different unit costs and royalty rates, and then against that projection I amortize the cost to make the book—all the editorial, production, marketing, manufacturing, and overhead costs, and so on.

This is to say, the cost of making the book (editorial, production, author advance, marketing, overhead) is not attached to just one edition of the book, for instance, the hardcover. People sometimes imagine that after the hardcover earns out those costs the paperback costs the publisher nothing except manufacturing and the e-book costs the publisher nothing at all. That’s not how it works. All the costs associated with making the book roll up against revenue from sales of all editions.

So, okay. E-books are cannibalizing print? That’s logical, right? Not at all: Publishers I’ve worked at and my friends at other publishers have seen that the introduction of e-books have created additional sales overall, not taken sales away from print editions. Probably some people have shifted from print to electronic (myself included), some people have stuck with print, some people who never bothered with print have become readers of electronic, and print has found some new readers. It’s a mix.

That’s just comparing print to electronic, though. What about when we consider the hardcover print edition specifically? With e-books, there’s less incentive for consumers to spend more for the hardcover edition. The choice is no longer “hardcover now or paperback later?” but “hardcover or e-book now?” Some consumers still prefer a print edition and will purchase the hardcover or wait for the paperback, but many more are electing to get the e-book right away. This means fewer sales of hardcover books in favor of e-books.

One more factor to consider. Something bookstores are really excellent for—and for kidlit and MG, much better than an online retailer—is browsing, looking at covers, and seeing something you weren’t looking for and want to read. This is really important discoverability for new authors, and something they’re going to be losing out on if B&N no longer stocks their books. Sure, we can still buy the book on B&N’s website or Amazon, but your seven-year-old probably doesn’t browse Amazon to find books to read. They hear about them from friends or they see the book on a shelf at the library or the bookstore and the cover appeals to them.

Unfortunately, something a lot of us do is we see a book on the shelf at B&N (or any brick-and-mortar bookstore) and we go “hmm, I wonder” and then we look it up on Amazon on our pocket supercomputer-slash-telephone and see it’s cheaper on Amazon and so we order it from there. The brick-and-mortar bookstore doesn’t rack a sale. For us, there was value in that book being shelved there; that was how we discovered it. But for the store there was no incentive to stock that book. It was a waste of shelf space for them, and shelf space is their business. It’s all that sets them apart from an e-tailer.

End result? This all sucks. It sucks for the authors whose books won’t be stocked. It sucks for publishers when their debut and midlist authors don’t succeed. It sucks for us, the readers, when we can’t discover new things in a bookstore. Personally, I don’t want the bookstore to be a repository of the titles that are already popular—if a title is already popular, then I already know about it and probably already ordered it online. When I go in a bookstore, I want to find something I didn’t already know about.

I feel like the onus is really on publishers for this one. I’m sure the opinion I’m about to voice will be unpopular but I don’t think B&N is wrong to limit the hardcovers they stock: They take up a lot of space and outside of the bestsellers, hardcovers just don’t sell that well. But this doesn’t mean that debut authors and midlist authors shouldn’t or can’t have an opportunity to be stocked in stores.

What if I told you—in my Morpheus from The Matrix voice—that just because we’ve always done something a certain way doesn’t mean we have to keep doing it that way forever? What if we, meaning publishers, cease delaying the paperback edition to let the hardcover sell through? Why not release the paperback edition day-and-date with the hardcover and e-book? Why not print smaller runs of hardcovers just to satisfy the libraries and print paperbacks for consumers? 

If B&N is telling us they can’t move hardcovers and they can move paperbacks—that doesn’t have to mean debut and midlist authors can’t sell through B&N because B&N won’t stock their hardcovers. Just . . . put those books out in paperback.

“But authors make lower royalties on paperbacks and more on hardcovers so it’s unfair to the authors”—we can change the way we write contracts, too. We can change the way royalties attach to different editions. It doesn’t have to be unfair to authors.

I see the appeal of hardcovers changing as a direct result of e-books entering the market; you have a cheaper day-one edition for the person who wants to read and doesn’t desire a collectible fancy edition. Hardcovers aren’t selling the way they used to because we changed how we publish. This problem can be fixed the same way.

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