Please weigh in on my book distribution quandary

I had quite the education last week about processes and realities I didn’t want to know much about. It revealed to me, at a very personal, soul-searching level, just how difficult it is to break from the status quo while running a business.

The entire time I spent researching, interviewing and writing Latinnovating, I planned on being my own distribution and marketing firm for this title. The thinking went like this: “I am a skilled marketer. I can create and fulfill demand. I’ve done it before with a wide variety of other products. I can certainly do it for my own book!” I had avoided learning the realities that hit me in the face last week.

Now, I know why I had avoided them. In learning what I learned, I have arrived at a point where I have to make a very tough decision, just like the people I have profiled in my book.

Will I be forced to play in the existing book distribution game that is truly unsustainable and ridiculous for the simple reason that alternatives do not exist?

The question is this: do I sign an agreement with a major, national book distributor to reach the nation’s libraries, schools and bookstores or do I reject the agreement and distribute this book entirely through my own efforts and with those willing to help me out?

Few small publishing houses would think twice about saying yes to a national distributor, given the opportunity. But I only make major strategic decisions with all the facts in front of me. I consult with people I trust with extensive experience in these matters. And, I know that I’ll stand by my decision after I make it. So there has been a great deal of work to do before I could decide this one.

I consulted with my attorney friend who questioned various parts of the contract. I discussed those with the account manager at the distribution company until I was satisfied. That turned out to be the easy part!

I then called on a very successful entrepreneur who makes his “living as a speaker collecting high speaker fees, selling a couple dozen books in the back of the room as gravy.” He said he had never considered a distribution agreement for his self-published books. He sounded intrigued that I had the opportunity for national distribution but was actually considering turning it down. He made a phone call to some friends that had gone that route and brought back not-so-great news: they were unhappy with the arrangement and ultimately terminated the contract. So I leaned heavily in the direction to reject the contract and for the moment returned to the “I can do this myself” thinking.

I called a trusted adviser on the publishing team that created my book. She suggested there might be a way to get in directly with the wholesaler, the agent from whom libraries, schools and retail bookstores order books. It was worth a call.

I called the wholesaler and was told, “If you don’t have at least ten titles on the market, you are not eligible to deal directly with us.” Ooooohhhh…”eligible.” So it IS like a special, private club after all, I began to realize. Now, I felt that I HAD to find a way in, because my personality type does not like to be excluded from places I deem important to my cause and my business.

Next, I checked in again with the market directly. I visited my city library and was told, “If you’re not visible to me in the xyz database, I cannot order your book. There are no exceptions. It’s just how our funding is set up.” This revealed the bureaucratic reality of the institutional buyers I want to reach.

I visited my independent book store in downtown Hayward. “We only order from xyx wholesaler’s database. But since you’re a local author, I can make the exception if you sell books to me for the same discount rate AND agree to do a book signing.” DEAL – a glimmer of hope. But, what about the rest of the national retail market?

I visited my county library and was told, “Our books are purchased centrally by the county. If you’re not visible to that person in the xyz database, they cannot order your book.” When I explained that I was local, I could offer the same discount as the wholesaler, I could deliver the books more efficiently and with far less carbon emissions involved than the established process, she said, “I’m sorry. That’s how it is.” And then she added, “You know if you don’t sign with this national distributor, you’re shutting out the entire library market.” My memory tells me there are approximately 168,000 libraries in the country.

Then she added, “By the way, any small publisher would be insane to turn down the opportunity to sign with a national distributor like the one you’re talking to now.”

Great. I’m leaning quickly towards insanity, and justifying it too.

Disheartened, confused, I felt I should be doing either marketing or even tax preparation, something more productive and satisfying. So I called the college bookstore in Texas that had already expressed interest in buying after my lecture there. I offered to sell for the same discount as the wholesaler. “Nope, can’t do it. The university procurement system only lets me order from established vendors. I have to order from the xyz wholesaler database.”

This is why this decision is weighing on me. I said to the college bookstore lady, “Look, the books are being printed in Missouri. If you can find a way to order directly from me, I can arrange for them to ship directly from the printer in Missouri to Texas – a nice short trip – creating minimal carbon emissions to move my book. If instead, you’re locked into this system, the books will have to move from Missouri where they’re printed, to the warehouse in Ohio. From there, they’ll be move to the wholesaler’s location (Tennessee). Then when you order, the books will be trucked from Tennessee to Texas. Does this make any sense to you?”

“I’m sorry Graciela,” she replied. “That’s the way I have to order the books for the store.”

Do you see my dilemma? I’ve written a book about entrepreneurs who questioned the status quo to create new opportunities, to intentionally reject the status quo processes that they deemed unsustainable. Yet, here I am, faced with having to go to market using our archaic, unsustainable, extremely wasteful, multi-layered national book distribution system.

Not only are the processes and infrastructure slow and the opposite of green, but because they involve so many layers, many parts of it take bites out of my book’s revenue. Crunching the numbers leaves me concluding that it barely makes any business sense to participate in this system. Lucky me, I get to give up almost all my profit AND contribute to a wasteful, ridiculous book distribution system.

Kicking and screaming I signed the contract on day four of exploring the opportunity. I simply could not get myself to close the door to the potential sales that may happen as a result of all the awareness work I am doing.  Worse yet, I have already created demand at two middle schools, three college book stores and two public libraries….none of which would be able to order copies of my book (they say) if I turned down the distributor.

To do so would mean that I’m spending energy, time and money to raise awareness about my book, its message and its unique purpose. But, if I reject the distribution contract, I would be unable to meet the demand that I had created. How stupid would that be?

People in the system tell me, “Your book will be much more credible if it’s in the existing distribution system, visible to all book buyers who might hear about it.” Really?

A book’s credibility is determined by the method used to deliver it to the end consumer? Really? I thought a book’s credibility (and its author’s credibility) came from the substance of the work, the actual quality and content of the product. What do you think? I think people who tell me this have been brainwashed by the status quo. But I also know that people’s perceptions are their realities and I’m bucking the system they know and trust.

So when the distributor came back and asked me for a $1500 deposit (“to mitigate our risk working with a small publisher”) I backed away. Now I’m leaning towards doing what the courageous people in my book have done: rejecting the status quo and finding another way to deliver the goods to the market. I’m almost certain this is what I will decide.

However, here’s the question: do I really turn my back on this national distribution system, with all its flaws and unsustainable practices, and shut the door to our nation’s libraries, schools, college bookstores and retail stores? In other words, do I make it difficult to impossible for them to order because I’m not visible in their xyz database from where they’ve ordered for the last three decades?

I know the book industry is changing. I know that many titles only go to market as e-books. You’re getting a good look now as to why this change is happening. But those that choose to use the existing system are made to pay dearly for the privilege with a host of “fulfillment fees, restocking fees, pallet storage fees, administrative fees, etc.” And, here’s my favorite part: you get paid only a fraction of the money within 30 days of when the distributor gets paid by the wholesaler, meaning receiving a fraction of the money within 90 days and the rest…wait for it…within nine months. Yes, nine months, due to the agreements in place regarding the possibility that books could be returned from wholesaler to distributor. Seems everyone’s risk is covered, except the person who created the work and the publishing house taking it to market!

So e-books are great, yet still a small fraction of the book market today so it’s not the right time for me personally to make the e-book only call. Plus some of us just LOVE books. Those of us who write books, who love to hold them, put a bookmark in the pages, keep books in our bookcases, this is our dilemma. (If you’re wondering, Latinnovating is going to market as a book AND as an e-book. Both formats will be available at Amazon.com in mid-May. You can still pre-order the book at the book’s website and order it from there after the May 14th launch as well).

You probably guessed that there is no interest from anyone in this book distribution chain to streamline the process and to reduce layers of complexity and inefficiency. Who wants to lose out on their guaranteed 18% commission (distributor) or their 40% cut of the retail price (bookstore)? Anyone?

Sandra Artalejo, one of the stars profiled in Latinnovating said to me, “Graciela, this is your moment to take a stand against Goliath. Now you see how hard it really is to do.”

Please weigh in: do I apologize to the environment and sign with the distributor, to be able to address demand from the available market in the way that they are locked into buying?

Or…do I reject the distributor and go at it alone, putting all the pressure on myself and my business to find alternatives to address the market? What would you do? I welcome your comments!