From veteran publishing consultant Mike Shatzkin:
Having been out of the day-to-day of book publishing for a few years now, and — like most people — cut off from most routine commercial conversations in the nearly two years of the pandemic, I took a look at some recent opportunities I encountered online to catch up with today’s book biz realities through conferences or seminars to see how they might update me.
I haven’t found it yet, but the trigger provoked me to think it through enough to identify what I’m looking for.
What has happened since the pre-21st Century publishing world I — and so many of the executives now running things in our industry — grew up in is that book sales have shifted and fragmented. As we concluded the last century, in the earliest days of Amazon and just before the achievement of commercially viable print-on-demand by Ingram’s Lightning, the supply of books came almost entirely from inventory printed by publishers in “press runs” and the customers found them (still, mostly) in bookshops that had invested their own cash in the inventory in their store to make it conveniently available.
The reality that produced — the reality of 20th century publishing which created the overall corporate infrastructure we still (mostly) have today — was that only publishers who could invest in inventory and had the sales organization and retailer relationships to put the books where the book shoppers would see them could compete effectively. “Self-publishing” meant “vanity publishing”: an exercise by which a (foolish) aspiring author printed books at his or her own expense to put them in their garage and sell almost none.
This created three truths which are now historical; they no longer apply. One is that the commercial publishers in the United States who invested in inventory and covered bookstores were able to routinely place some thousands of copies into the marketplace of just about any book they created. A second is that no publisher who didn’t invest in inventory and an organization could really compete. And the third was that publishing was primarily “local”; you published and marketed to consumers in your country and everything else was “export”.
That is not the world we live in today. Most book purchases made today are not from bookstores that invested in and presented a selection. The monopoly of the inventory-investing publishers over customer access is gone. It is safe to say that in every year of this century until the pandemic, the percentage of books sold in stores went down and the number of titles effectively available for purchase by consumers, increasingly through online search and purchase and printed one copy at a time “on demand”, kept rising. There are nearly 20 million titles available for delivery tomorrow in today’s world; there were certainly well under a million available 20 years ago. And with most customers not reached through inventory in stores, it is usually not relevant where a potential customer is: in your country or someplace else.
And while, particularly in the ebook space, players have proliferated (with giants like Apple and Google and B&N’s Nook and upstarts like Smashwords and the newly organized Legible.com — whose proposition is that ebooks should be readable in a web browser — all serving readerships that only partially overlap), there really are only two companies that define the book business today.
They are Amazon, a company that everybody in the world knows, and Ingram, a company that everybody in the book business — but few outside it — knows. Amazon and Ingram comprise the global infrastructure of the book business. Amazon has the single biggest share of the online print and ebook (through its Kindle format) markets. And Ingram reaches every other corner of the book world. It is hardly an exaggeration to say that every publisher, book retailer (online or physical), and library in the world transacts with Ingram. All the publishers must get to Amazon one way or another, but the rest of the retail world sees them as existential competition and would prefer not to support them in any way. Ingram is everybody else’s trusted partner. So for other bookstores and big players in the market like the mass merchants, Ingram is the major source of supply.
Both companies have always had natural interactions with the publishing community. Almost every publisher depends on intermediaries to put their books into the hands or devices of readers. Even publishers which have been building their direct-to-reader relationships and their database of customers for over a decade will still sell most of their books through somebody else.
Both Amazon and Ingram have branded programs to on-board small publishers and authors. Amazon’s is KDP (Kindle Direct Publishing) and Ingram’s is IngramSpark. There is a lot for any publisher or author to know to optimize their relationship with either company. Amazon is talking to book readers constantly and has all sorts of ways for book publishers to buy their way to likely purchasers. Ingram’s services are vast and much more complex. They can provide a full suite of “with reps and warehousing” distribution services and they are building a package of marketing tools under the banner of “Ingram Insights” that put their clients on a par with major publishers in using modern techniques to identify and connect with book audiences. Ingram’s marketing tools are built an a truly unmatched ability to “see” (and aggregate and measure) customers buying books. Amazon sees its own sales. Publishers see theirs. Ingram sees across publishers and vendors.
In fact, all publishers who plan to actively manage their titles in the marketplace — those who are starting this afternoon and those which have been around for years — need to begin their planning for the future by thinking through the role both Amazon and Ingram will play in their structures. For the smallest publishers, that could include deciding what aspects of their Amazon relationship are best managed through Ingram to simplify their lives and give them only one giant company to deal with rather than two.
This is an important distinction between the two behemoths. Ingram will accept it as part of their job description to help you optimize your sales through Amazon. The reverse is not true.
Link to the rest at The Idea Logical Company
Mike has a deep background in publishing. He also was one of the earliest voices from the publishing world to recognize the potential disruption Amazon could cause to traditional publishing and has followed that process through his columns for a number of years. As Mike has disclosed previously, he has worked as a consultant for Ingram.
PG hasn’t heard or read anything negative from indie authors who have used the Ingram Spark program, but admits that he hasn’t seen much at all about indies and Ingram from indies. He would be interested in hearing comments from those who have used Ingram via the Contact PG link at the top of the blog.
That said, PG’s understanding is that the only marketplace the Ingram offers and Amazon doesn’t is selling into the traditional book store world.
As PG has mentioned many times before, traditional bookstores are expensive places for authors to sell books because the bookstore needs a large enough markup between what a physical book costs them and the store’s sales price to pay for rent, utilities, employee salaries, advertising and promotion, etc., etc.
If a retail bookstore is your only option for reaching customers as it was for hundreds of years, you build your business, marketing and pricing around the costs of that sales channel.
Amazon is an alternative sales channel for indie and traditional publishers. Because of Amazon’s enormous size and revenue stream, Amazon’s costs to sell a physical book are far lower than Barnes & Noble or an indie bookstore’s are.
With respect to ebooks, Amazon has spent a lot of money building a huge computer infrastructure that it uses to sell all sorts of different products and services. Recognizing its expertise in this business opened up lots and lots of other markets, in about 2000, Amazon created Amazon Web Services to provide an online platform others could use for their ecommerce activities. Then Amazon expanded AWS into all sorts of related electronic and computing service markets.
In that growth process, Amazon’s ecommerce business moved from its own computer system and is one of the largest customers of AWS now.
In the most recent report PG read about AWS, its revenues were growing at a 32% annual rate. It provides computer services to a large number of very big and important customers. Earlier this month, PG saw a report that Great Britain’s MI5, MI6, and Ministry of Defence use AWS to host their confidential information.
For those who don’t read spy novels, MI5 catches spies from other countries who are trying to steal Britain’s important government and military secrets and MI6 is where Britain’s spies work stealing secrets from other nations and hostile individuals. (PG is happy to be corrected by those who know more about these two agencies if he hasn’t described them accurately.)