Publishers Push for New Rules on Unsold Books

For decades, the publishing industry has paid stores to return unsold books. The method forces publishers to gamble on the success of a given title, a risk many small presses can't afford. In a move seen to signal a possible industry change, a new imprint at HarperCollins will not allow stores to return unsold merchandise.

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The book-publishing industry is built on a practice that many in the business consider costly and inefficient. Your bookstore gets millions of copies of books - "The Year of Cooking Dangerously" or "Memoirs of Looking at My Belly Button," whatever that book may be - but if you do not buy that book, the bookseller has the right to return to the publisher any book that they're unable to sell.

Recently, the CEO of Barnes & Noble called returns insane and said it's time to find a way to end them. That would mean a whole new way of doing business. NPR's Lynn Neary reports.

LYNN NEARY: During the Great Depression, publishers were looking for a way to encourage booksellers to buy more books and to take a chance on unknown authors. So they offered bookstores the right to return unsold books for credit. It's become an entrenched way of doing business, but there's one really big problem with it. What do you do with all those returned books?

Well, says, Avin Domnitz, CEO of the American Booksellers Association, some get put back on the shelf, sometimes more than once.

Mr. AVIN DOMNITZ (Chief Operating Officer, American Booksellers Association): Quite often, booksellers will order a book, not sell it, return it and then, some short period of time later, reorder the same book. So now it gets shipped in, gets shipped out, gets shipped in - and if doesn't sell, it gets shipped out again.

NEARY: Those books sit in storage while their fate is decided. Fordham University professor Albert Greco says publishing and distribution companies have vast warehouses filled with books that have been returned.

Mr. ALBERT GRECO (Professor, Fordham University): At a certain period of time, the publishing house would decide if this inventory will never move, and then they will physically ship it to a plant that will pulp it.

NEARY: Greco says no one knows for sure how many returned books are in storage, but it's safe to say there are millions. Some of those books sit in a warehouse operated by the distribution company National Book Network, nestled in the Catoctin Mountains in Blue Ridge Summit, Pennsylvania. Both brand-new books and returns are stored here, and 15,000 new orders are processed each day.

On the warehouse loading dock, workers use heavy equipment to load pallets of books onto a Barnes & Noble truck. The warehouse is huge, 300,000 square feet. It holds 45,000 active titles, 20 million individual books.

In some places, it seems like a factory, with boxes of books traveling a three-story conveyor belt. In other sections, it feels like a gigantic library, with workers pushing cartloads of books through towering shelves. Pallet drivers, beeping their horns, move books from one section to another.

(Soundbite of horn)

Unidentified Man #1: Coming through.

Unidentified Man #2: Go ahead.

Unidentified Man #1: Okay, thanks.

NEARY: Jed Lyons is president and CEO of Rowman & Littlefield Publishing Group and the National Book Network.

Mr. JED LYONS (President and Chief Operating Officer, Rowman & Littlefield Publishing, National Book Network): This really gives you an idea. If you look all the way down that way, to your left, you'll see the end of this particular storage location.

NEARY: This storage area, several football fields long, holds books waiting to be shipped. Most of them are new, but a sizable number are books that have been returned to the warehouse and are now being put back into inventory.

Mr. LYONS: Roughly 25 percent of what we ship out comes back in the form of a return, so one out of every four books. And you'll see the returns area in a moment.

NEARY: Up a flight of stairs, away from the main part of the warehouse, is the area where returns are processed.

Mr. LYONS: So here we are in the dreaded returns department.

NEARY: Processing returns is a hands-on job. Workers remove stickers and price tags from each book and inspect them for damage to determine whether they need to be destroyed immediately or can be sent back out to stores. This, says Lyons, is the down side of the book industry.

Mr. LYONS: Sometimes I think the only people making money in the book business these days are the truckers who are picking up the books as they go out and picking up the books as they come back. It's discouraging to see books come back because it means they weren't sold.

NEARY: In the old days, Lyons says, returned books were actually burned. One publishing house was said to use them as a source of heat. These days, even though many are still pulped, Lyons says returns have a better chance of a second life because even damaged books can be sold on the Internet. And some believe technology, electronic books and print on demand may be the answer to the problem of returns. But Lyons is not so optimistic.

Mr. LYONS: Ten years ago, I would have guessed that at least half of the book sales in this country would be electronic. It's less than one-tenth of 1 percent today. So I think the book is going to hold its own. Unfortunately, we're saddled with this process of returning inventory to stock. I doubt that's going to change because the largest publishers in the industry are in no big hurry to remove the option of returnability because it would adversely affect sales.

NEARY: Publishers worry that booksellers will buy more conservatively if there are no returns. And Avin Domnitz says booksellers would demand a deeper discount price in order to make it worth their while to buy nonreturnable books.

Still, Domnitz says, current economic conditions are driving renewed interest in eliminating returns.

Mr. DOMNITZ: The industry's profitability is under stress. It's not such a great time for retailing in this country. We have to find a way to be much more efficient than we are. You shouldn't have to handle the product and ship it around the country, given what gas prices are, as many times as we do.

NEARY: Over the years, Domnitz says, there have been many discussions about how to change the practice, and nothing has ever come of them. But this could be a moment when the book industry really takes a cold, hard look at how it does business. Not only did the CEO of Barnes & Noble say it might be the time to end returns, the head of a new Harper Collins imprint said he'd like to do away with returns as well.

Still, no one seems to have a solution. Fordham's Professor Greco says the most radical idea may be to publish fewer books.

Mr. GRECO: Ultimately, consumers might have access to a smaller number of titles, which would reduce what some have called clutter in the marketplace. Does that mean, ultimately, that the next Hemingway or Fitzgerald might not get published? I don't think that's likely, because if you have something to say, and it's really compelling, the odds are an editor will probably take a chance on you.

NEARY: But in an industry filled with people who love to read, the idea of publishing fewer rather that more books may be a prospect no one's willing to contemplate. Lynn Neary, NPR News, Washington.

(Soundbite of Music)

INSKEEP: There's no return policy on this program. We'll be shipping you another one on Monday. It's MORNING EDITION from NPR News.

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