To Go Direct, Publishers Must Mean Business

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

direct-to-consumer ebook publishersThe arithmetic of publishing is fairly straightforward: Sell plenty of books at as high a margin as you can manage, and don’t spend all that margin on overheads.

To make that sum work, there are a number of levers a business can pull in order to improve its fortunes. You can increase the retail price to the point at which demand drops off. You can pay less for your stock by negotiating with suppliers. You can pay your authors less. You can provide a lower discount to your customers.

But back in the real world, Amazon isn’t going to bat an eyelid if you attempt to negotiate their discount down. Readers aren’t going to pay $30 for a debut novel in paperback. Printers aren’t going to charge less than their paper costs. Authors are going to revolt if you cut their royalties. While in theory you can tinker with the parameters of your business, more often than not, you’ll find yourself constrained by the habits of the industry.

So what can publishers do to make a difference to their titles’ performance? If the norms of the contemporary publishing model constrain you, then don’t work within the constraints. Approach things from a different angle.

One area where publishers blindly follow the blind is in their websites. Biztegra’s Murray Izenwasser has written recently about how crucial it is for publishers to develop a web presence for fostering strong relationships with readers. He’s absolutely right. But while that customer connection is indeed essential, it’s still a means to the ultimate goal of direct-to-consumer retail—which is retail.

It seems that as an industry we’ve given up on trying to make money through our own websites. ‘Everyone just goes to Amazon, right?’ Well, Amazon doesn’t just sell books. They sell watches, clothes, garden tools, luggage, movies and bikes. Other industries have had to face down Amazon, not just book publishers—and they’re succeeding, building online stores that do a decent job of both cultivating a brand identity and making money. Check out this map-maker, toy seller, wristwatch seller and fake tattoo seller—all commercially successful, all selling high volumes of product without giving 55% of the price away.

The point is that publishers must think boldly and move beyond half-measures if they are to remain agile and profitable in the digital marketplace.

You are being defeatist if you think your website is just about building your brand—even though it’s certainly about that, too. It’s also your most effective, most controllable, least costly means of selling books at a dramatically higher margin than you can ever hope to achieve through online resellers and bricks-and-mortar retailers.

You are being inefficient if you commission a custom-built site for thousands of dollars, with exactly the same functionality as every other publisher who also felt they needed a hand-crafted solution.

You are wasting money if you hand over 20% of every sale to a third-party plugin because you think delivering digital content is just too difficult in the year 2015.

You are deluding yourself if you blame the merciless merchant class and their exorbitant discounts and returns for stopping you from making any money.

What you can do instead is find some new performance-enhancing levers to pull on. Consider these three facts of the e-commerce landscape:

  • There are infrastructure tools that exist today allowing you to configure a profitable, automated, online offering for a fraction of the cost of what you had to pay just three or four years ago. After doing our own independent research here at Bibliocloud, we recommend the Canadian e-commerce platform Shopify, though there are many others out there.
  • People shop all the time on the Internet, and you can channel them toward your own site. For its own part, Shopify found that “while organic and paid search still dominates, orders coming from social media grew 202% over 2014. Social media has become an effective way to bring in sales.” There are also platforms—Valobox is one—dedicated to monetizing social media interactions.
  • Plenty of people shop on Amazon, but they shop in many other places, too. Shopify reports that sales through its own stores alone were $3.7 billion, up from $1.6 billion last year, in 150 countries.

When you’re planning the sort of online offering focused foremost on making money, rather than on the important yet softer objective of building a brand, you don’t start with the design. That’s like buying a nice, shiny set of hub caps, then looking around for a car to go with them. Instead, you start with the flow of data. How is your title data going to get from your title management system into your website?

The other practical issues come next. How are orders going to be taken and fulfilled? How will your website know whether the product is in stock? How will you execute your pricing strategy across all the different places you plan to sell books? How will you manage customer accounts and provide support? How will you upsell your interested customers or recover their abandoned baskets? How will you make your own website the richest, most up-to-date, interesting way for readers to enjoy your product data on the web?

Asking these sorts of questions leads you to appreciate the growing array of services that can provide affordable, effective answers to them. We’ve gone to great pains to integrate our title management software, Bibliocloud, with Shopify’s platform because we can see the writing on the wall. Publishers that assume Amazon has won their customers for good will be proved absolutely right.

Related: Eleven Business Trends and Opportunities for Publishers in 2015—Free Download

5 thoughts on “To Go Direct, Publishers Must Mean Business

  1. Laurence O'Bryan

    Emma,

    Great post. The problem for publishers is that they are still fighting the last war. They are catering to a book store trade, which doesn’t want publisher to sell direct.

    A business whose main channel is retail outlets – book stores – will always be wary of selling direct. The next best thing for publishers is to encourage alternative channels, such as Apple, Kobo, and the dozen other online stores. The alternative is to set up separate divisions competing against their main retail channel. This commercial bind is what Amazon is taking advantage of.

    To break free is the Gordian knot of book publishing.

    Reply
  2. Ryan Morison

    “There are infrastructure tools that exist today allowing you to configure a profitable, automated, online offering for a fraction of the cost of what you had to pay just three or four years ago.” – I couldn’t agree more! While I opted to build an end-to-end direct to consumer offering (e.g. including content management, E-commerce and fulfilment) from scratch while back, publishers looking to do direct sales nowadays don’t necessarily need to go down this path as there are so many simple, effective solutions out there.

    Reply
  3. abhishek

    Emma, totally agree with you, these peoples have given up, perhaps because they think computing is not their core competency, its also a consttained by budget. But yeah lot of hybrid and author services opening maybe they can do soke magic

    Reply

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