When Bookstore Distribution Collapses

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

Publishers: Have you thought about what your business looks like if 10% of your bricks-and-mortar shelf space goes away next year? What about if 20% goes away? How about 50%?

It could get worse than you think.

(Before you smash your computer and vow never to visit DBW.com again, let me say here that I don’t necessarily think this is going to happen anytime soon. I just want to engage in a thought experiment. Breathe.)

I was in Nashville this week at the Evangelical Christian Publishers Association Leadership Conference. I’m not an evangelical Christian publisher but I was invited to speak on several panels about current trends in ebooks and digital publishing with some colleagues from PW, TOC and some of the leading Christian publishers.

First off, it was a really good meeting. The ECPA membership is made up of some very smart, very savvy publishing executives who are under no illusions about the opportunities and challenges of the ebook era.

Aside from having some great conversations and meeting some nice folks, I was delighted to have the opportunity to connect with some people at Ingram, which was hosting the conference, and go on a tour of the Ingram distribution and print-on-demand facilities.

To my recollection, I’ve never been on the floor of a real manufacturing or major shipping facility and I was completely wowed. The level of complexity and sophistication in the operations is mind-boggling. The size and scale of what’s being done there blew me away. And it was almost magical to see books being made, packed and shipped from this one place to points around the country, to know that the few books I touched in the process would soon be read and maybe loved by someone I’ll never meet.

This is not the Ingram facility but it's sorta what it looks like. Not photos were allowed.

This is not the Ingram facility but it’s sorta what it looks like. Not photos were allowed.

If you love books and are able to get down to Nashville and convince the Ingram folks to give you a tour, you should definitely check it out. I wish I could share more with you, but no photos were allowed and our tour was strictly off the record.

Even while I was being impressed by the Ingram operation, I couldn’t help but think, “this must cost a lot of money.” Each factory floor was hundreds of thousands of square feet, filled with complex machines and highly trained workers operating them. So, my question is, how many print books need to be sold in stores every year to validate these operations? (Let’s forget about print-on-demand for a moment as it adds another level of complexity. We’ll get to it later.)

If Barnes & Noble retail stores were to disappear tomorrow*, would Ingram still need such facilities to pack and distribute books? (The company has many facilities around the country and abroad – and it’s not the only book distributor, of course.) What if Books-a-Million went under? Or a few hundred indie bookstores?

Related: Ingram Chairman and CEO John Ingram on Barnes & Noble

My point is, if 5% of bookstore shelf space disappears next year, it will probably affect the business by 5%, more or less. But if 50% goes away and THEN companies like Ingram or competitor Baker & Taylor say, “unfortunately, it doesn’t really make sense for us to offer the same level of distribution to the other 50%, to have these big distribution operations,” what happens to the other 50%?**

What I’m saying is, if enough bookstores disappear, it could be a death sentence for many that remain if they can’t get the distribution they’re used to.

Of course, companies like Amazon that sell a huge amount of print books through the Web would be affected, but print-on-demand technology makes buying a book that Amazon doesn’t have in stock a seamless experience for both the e-tailer and for its customers, who don’t have any idea that the book wasn’t waiting for her on a shelf somewhere as opposed to in a digital asset management system at a POD facility to be produced and shipped (sometimes within a matter of hours).

So, what’s your plan if the bookstore network faces a sudden collapse? How will your books get discovered by readers? How will you get them to readers?

It’s a tough question and I suspect that if there is a cataclysmic bookstore extinction event for some reason, some publishers will go the way of the dodo, too.

Clearly, publishers that have migrated more of their business to ebooks and digital publishing will be somewhat insulated. And digital-only publishers should be okay, too.

That said, it’s not a vision of the future that I like imagining for book publishing. It would be a very, very sad day indeed to see bookstores that survived a wave of closures through savvy management and maneuvering go under anyway because suddenly it was much harder for them to get distribution.

My advice to publishers and the industry as a whole? Hope for the best and plan realistically but prepare for the worst.

* Disclaimer: I personally see no reason that Barnes & Noble’s retail operation is going to go away any time soon. The division continues to be profitable and, in my opinion, can do a lot to improve its operations and therefore its performance.

** Aside from long-term trends toward e-reading and away from physical retail, there is nothing to suggest that an event like this is imminent and I personally think bookstores will be viable in the U.S. for many years to come.

One thought on “When Bookstore Distribution Collapses

  1. Steven W. Siler, Editor-in-Chief, Smoke Alarm Media

    Our company has the good fortune to be distributed to the trade by Ingram Publisher Services, and I have toured the facilities for printing and distribution in LaVergne, TN. As a former manufacturing engineer, this is what I observe about Ingram…

    1) Print books are not going away. Today, Bowker released data showing that there are more print books this year than last, even with the rise of eBooks.

    2) Just like in traditional manufacturing, JIT (Just-in-Time) strategies are becoming the industry norm. We simply call it Print-on-Demand and Espresso Machines.

    3) Ingram and their printing division Lightning Source make a profit (albeit small) on even the scrap left over from trimming books. It is safe to assume that their business model for generalized profit is sound as well.

    4) My concern would not be for distribution companies inasmuch as for wholesalers and traditional printing facilities. Retailers will eventually insist on larger margins, with shorter lead times and less inventory, all that squeeze both of these groups and benefit Ingram and Lightning Source.

    Granted, these are all my personal observations, but with Ingram’s foray into POD colour as well as CoreSource for eBooks, I am confident staking our foreseeable future on a partnership with Ingram, as opposed to planning a non-likely scenario without them.

    Steven W. Siler
    Editor-in-Chief
    Smoke Alarm Media

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