Supply Chain Woes…Traditional, Indie, And More

From Kristine Kathryn Rusch:

This morning, a regular reader of my blog forwarded a tweet to me from a bookseller and writer about supply chain issues for books. He then suggested I blog about those issues.

I had planned to, but I had a vague hope that they would improve. The bookseller’s tweet disabused me of that notion.

The tweet is below. Read the thread, and note that she does have a book coming out. In fact, I had initially thought she was a writer, not a bookseller and this had happened to her. (That’s what I get for reading things early in the morning.)

Well, it had happened to her, but her as a bookseller, not her as in her current release.  Here’s the link to the tweet.

For those of you who won’t bother to read the thread, she goes on to say that this is extreme red alert territory, because the book comes from Random House. Others chimed in with knowledge about other books going through similar issues or the way that they’re dealing with this.

I know some of you live under rocks and/or have decided not to pay attention to anything right now (and boy, do I relate), but surely even you all have noted the supply chain issues.

Your favorite grocery store doesn’t stock the same things it used to. My cats’ usual cat food has been discontinued (after years) because it includes some kind of tuna that’s no longer available. (Every supplier I know suggests I get them chicken, but Cheeps loathes chicken. I know. He’s not really a cat.) Fortunately for the cats, I found a variety pack of other food that they like better (even though that has supply issues as well), so all’s well that ends well there.

But half of what I usually buy, whether in person or online, has had some kind of delay due to some missing part. In 2020, we bought a new living room set, and that included 2 ottomans. The couch and loveseat were in stock, but the ottomans weren’t. It took four months for those to be delivered.

So, when we bought another new furniture set because of the move, we instructed the poor sales person to show us only items that they had in their warehouse. That took forever, because most sets had only one or two items in the warehouse, not everything.

We also somewhat optimistically partnered with another company on a game for a 2020 Diving Kickstarter. The game manufacturer went to China for his product, which hadn’t been a problem in the past. Then…well, you know. After a year, we will be refunding the game money. We’ll do the game when we have it in our hot little hands and not before.

The game manufacturer is dealing with this kind of delay on many of his products. I can’t imagine what that’s doing to his bottom line.

The New York Times had a pretty good article on the supply chain issues. (I’m sure you can find others.)

Paper books are no exception. In fact, Ingram sent out a series of warnings about the problems it anticipates in the Fourth Quarter. As those of you who follow several indie publishers on social media probably already know, one of those changes that Ingram Sparks has implemented are price increases, effective on November 6, 2021.

These increases are not small. The U.S. market will see a 6% increase, and the U.K. and Australia will see a 3% increase. As one publisher noted, that will make some of his hardcovers $40 or more. Ingram helpfully adds that they will be “We will also be identifying titles that will move into negative publisher compensation because of these price changes…”

In other words, they’ll let publishers who are going to lose money with the new pricing structure know before the new structure hits.

That’s just one way this is impacting publishing. There are other ways.

Let’s start with traditional first, because traditional publishers are making some amazing and difficult decisions. I actually have some empathy for them, because they’re not built to absorb this problem. Then I’ll move to indie, which can deal with the problem, with patience and a bit of creativity.

Traditional publishing, as I have written many times, is built on the velocity model. Books must sell quickly out of the gate, and then taper off later. Sometimes books that sell quickly sell faster than expected, and the demand is higher than originally thought.

In the past, the solution (though not ideal) worked well enough: the moment it became clear that the traditional publisher would blow through their inventory, they would sent in an order for reprinting. In the unlikely (but joyful) event that the first reprinting wasn’t enough, there would be a second, third, fourth and fifth.

Those days are now gone. As you can see from the tweet above, a book published two weeks ago has sold very well, but the publishing representative, talking to the bookstore that wants more copies, had the unenviable task of telling the store the book would not be reprinted.

At all.

Sounds like a stupid thing to do, right? And it is. If traditional publishing had a different business model, they would simply tell booksellers to be patient. The reprint would come eventually.

But that’s not happening.

This is because traditional book publishers must reserve time with their printers. Because everything is new, new, new, the new books get the most attention. Their printings are scheduled months in advance—a practice that has been part of traditional publishing forever.

Because of the supply chain problems and worker shortages and driver shortages and a whole bunch of other things that have an impact on paper books, there is less time to be reserved from printers, not more. That means that traditional publishers are pretty much guaranteed to get their first printings on their latest releases…and nothing else.

Even those first printings are delayed. As Ann Trubeck of Belt Publishing noted, it used to take two weeks to get a book printed. In July, it was taking her eight weeks.

Ingrams is encouraging booksellers to stock up early on the “hot” books of the season (whatever you guess they might be). But Ingrams is also encouraging publishers to print more books than usual, so that they will have books on hand, rather than run out.

But that traditional publisher, Ann Trubeck of Belt Publishing, included something quite savvy in her post. She wrote,

It is entirely possible to lose money by selling more copies than anticipated because an algorithm or overoptimism or “just in case” caution leads to large orders that force publishers to print more copies, only to have that demand evaporate, and all those freshly printed, last minute copies are sent back to the warehouse in a tsunami of bruised, tired cardboard boxes.

Remember, in traditional publishing, returns get eaten by the publisher. Booksellers who over-order can send books back for full credit, if they do so in the right amount of time.

So the traditional publisher put a lot of money into the product and find that they can’t sell it.

This is hard enough for the publisher. And Trubeck isn’t the only one dealing with this, quite obviously. If you read through that thread on Twitter, you’ll see Random House authors mention that their first printing sold out in 2020, they were promised a reprinting, and it never happened.

It won’t happen.

There’s not enough room in traditional publishing right now. I like Trubeck’s voice, so I’ll show you once again her publishing perspective. She notes that on Ingram, many of her books show no copies available. But readers can order from her directly because they have copies stashed at the office. (I have no idea how big her offices are or how many direct sales she makes. Probably not enough.)

Here’s what she says about that:

It’s as scary to anticipate losing sales as it is to be too late with an additional print run, but we will have books available for those who do an extra google search. This line of thinking leads, of course, to this thought: “boy I hope CBS News does NOT cover our October release, and nothing is nominated for a major award this fall!”

Now imagine that from the traditionally published writer’s point of view. They believe they hit the jackpot. Their book came out and got reviewed positively in every single mainstream publishing venue. Their book is the book of the moment—the kind of book that gets a crapload of attention, like so many political books got last year. Suddenly everyone wants to read that book, so folks who like paper order paper…and are told the book is out of print.

Then the book gets nominated for every single major award in publishing (that the book is eligible for). There’s no way, with a minimum of an eight-week delay on printing and time reserved ahead for the new, new, new, that their book will ever be reprinted in time to catch the wave.

Their publisher, who has been around the block a few times, knows that. Knows it very well in fact. So well, that after all the early COVID returns in 2020 (for full credit from closed bookstores) and because of all the supply chain issues and everything else, the publisher won’t even try to reprint.

The publisher will pat the author on the head, congratulate them for a job well done, and move to the new, new, new.

And the writer’s big perfect and wonderful launch—in which everything went right according to the traditional publishing gods—will result in a ruined career, because the books will not sell because there are not enough copies of the book to sell.

Worse, the people who read ebooks don’t like ebooks priced over $10. So, ebook readers will hear about this book, click on it, see that the price is $14.99 and will not buy. The paper book buyer will pick up the ebook, if forced, but will look at the price and think, “What the hell am I getting for my $14.99? I want something to put on my shelf. Ebooks should be cheaper.”

As a result, the ebook sales will increase, but not enough to cover the lost print revenue. Not by a long shot.

(And if you think I’m exaggerating the ebook prices of traditional books, I’m not. I did a spot check on books released this month—books that I preordered in paper from traditional publishers—and the cheapest one I found (from a non-bestseller) was $11.99.)

Sadly, this pandemic and the supply chain problems that will be with us, according to one estimate I saw, until early 2023, will tank a lot of traditional writers’ careers.

Yes, traditional publishers will know that a book that came out in 2021 will have lower print sales than a book that came out in 2019, but honestly, they won’t care. Because there are always new, new, new writers lining up to be fleeced. I mean, traditionally published.

Sigh.

Link to the rest at Kristine Kathryn Rusch

29 thoughts on “Supply Chain Woes…Traditional, Indie, And More”

  1. The second half of the post is pretty good too.

    Now, one thing missing from the whole article is POD.
    On (ahem) paper, POD is the answer to small print runs. And that is why the BPHs have increasingly gone to smaller launch print runs. Thing is as bad as the printer time problem is, the paper supply problem is bigger and will be longer lasting. No paper, no POD.
    And as we discussed in tbe other thread, book paper is inherently more expensive (and more ecologically damaging) than other uses of dead tree pulp.

    So tbat $40 price point KKR mentioned?
    It won’t be the end of it. $50 isn’t out of tbe question.

    And the time will come that even a $15 ebook will be, to fans of BPH authors, acceptable.
    Another alternative outcome will be tbe shift of TPB to cheaper paper (but not lower prices).

    A lot will hinge on whether western investors are willing to invest in printing plant expansions outside of China or whether they see the book paper shortage (and price hikes) as limiting tbe value of such expansions. (Or if the real estate drama going on in China explodes, now or later.)

    I don’t see the old, flat, status quo returning. Period.
    The new normal will take time to shake down but pbook prices will go up and stay up.

    • This is sort of what I didn’t understand – while it is true that no paper = no POD, it’s not like we’ve just run out of paper *yet*. I believe the POD machines are still humming. As Mike has said, it’s easy to set up for POD and at least you get something for almost no work as opposed to leaving money on the table. Has the cost of paper made it untenable, or is it just a blind spot?

      • The article isn’t just about tbe availability of paper but also about paper pricing.

        And unmentioned there, book paper is being “outbid” by alternate pulp uses. That’s a big part of tbe shortage. Book paper is more expensive (and complicated because of environmental concerns) to produce than unbleached box paper and as demand/pricing for packaging goes up, book paper has to get more expensive to hang onto its production share. Otherwise more paper mills will cut back book paper or drop that market altogether.

        POD prices will also go up with paper prices, which is probably part of Ingram’s warning of higher prices; if their paper costs go up so will POD prices, which are already higher than China based print runs. So POD is no answer. Not for authors or readers.

        And since KKR interest is author impact…

        Publishers? As long as the print runs sell out at the higher prices they won’t lose money, just potential sales and those might be offset by “lost” returns. They might even come out ahead.

    • In Sam’s Club yesterday I saw a rack of books from big-name authors, all at least 15 years from copyright date. They were printed and produced as cheap paperbacks. Felt like newsprint. Priced appx $7.

      On the other side of the rack were recent books by the same authors, with much higher production quality. $10-$15.

      • SAMS and Costco books are deep discount (little if any royalties to the authors) so they are generally way cheaper than bookstores. And rarely new releases, right?
        The question would be how much are bookstores charging for the new releases by the same authors.

        • If there was a serios paper crunch would publishers drop down to the newsprint level for new releases, or print fewer? Would they all move in lockstep, or might one break ranks?

          Sams did have new releases. That’s what my experiment was. They were a paperback quality like we are used to seeing in B&N. On the other side of the same rack, a totally different quality reigned. Newly produced, lower quality cover, and newsprint. And older, but the same authors.

          I look to the margin on these things. When I see newer books in newsprint than I saw yesterday, I will suspect a trend.

        • That’s due to contract terms imposed on the authors by the publishers when the publishers know damned well that a substantial part of their market is to deep discount. (It’s actually even a problem with the ‘zon… for contracts entered into the 1990s, with “deep discount” being triggered at 50% and sometimes less. But that’s for another time.)

          That said, at least the returns systems doesn’t make things worse… oh, wait…

            • I should have been clearer:

              The returns system as it is managed in “reserves against returns” often reduces the compensation credited to authors to barely above that of deep discount sales… on lower-priced books like mass-market paperbacks, the difference is almost always less than $0.15 per copy, and all too often less than $0.10 per copy. Now throw in that deep-discount sales are almost always accounted in the royalty period in which they occur, whereas returns-system-full(er)-price sales are usually finagled to a later period…

              So I always raise my eyebrows at the assumption that deep-discount necessarily means lower compensation to the author.

  2. This could be a catalyst for more authors to consider audiobooks. Not every audiobook has to be $5,000 or a 7-year royalty share deal. There are many other options to produce quality audiobooks.

  3. Worse, the people who read ebooks don’t like ebooks priced over $10. So, ebook readers will hear about this book, click on it, see that the price is $14.99 and will not buy.

    The fallacy of our times.
    Given the situation set up by Rusch, what reason do we have to think publishers will insist on $14.99 when other vital factors change?
    Just for fun, watch the current pricing scramble in the UK and EU as green energy failure cascades through the economy.

    • No hard evidence, no.
      But the BPHs long held disbelief in price elasticity points at ebook prices remaining high. After all, books are “special”.

      Also, at the peak of the pandemic lockdown last year, they held firm on new release prices. This year the bookstores *will* be open and they *will* have pbooks in stores. Just at higher prices. They’ll make quota, so no pressure on them. KKR’s point is that less books at higher prices may not hurt the BPHs but it will hurt the authors’ long term prospects.

      The EU energy situation–with north sea windmills stalling and the russians holding back on natural gas–will settle down as soon as Putin makes his point: with the US stepping back energy production and back to net imports at high prices, the continent is at his mercy. They were warned but Shröeder’s gang had the upper hand. Now GAZPROM calls the shots. Winter is coming, so no more talk of stopping Nord Stream 2.

      • They do preach books are immune to price elasticity. It revolves around the idea that since each book is unique, no given book is affected by the price of any other book. Books are special.

        However, they are leaders in practicing price elasticity. Their entire paper/eBook pricing structure relies on elasticity to manage the sales mix of paper vs digital. Cross elasticity supports their eBook prices. Here, books are widgets.

        What will they do? I don’t know because I don’t have the economic certainty Rusch has. But I am a firm believer in Widgets.

  4. I just ordered print books for 20Books Vegas (November) for the author signing at Bally’s. I ordered them about 2 weeks ago and 1/2 the shipment will arrive next week. After reading this article, I’m glad I gave myself such a long lead time, but most of all I’m glad I’m Indie. This latest snafu for trad writers feels like the 70’s song -50 ways to leave your lover, but in this case it’s 50 ways to be screwed by your publisher.

  5. “the people who read ebooks don’t like ebooks priced over $10.”

    Anecdatum: I read both ebooks and paper books. Which I favor has mostly to do with what sort of book it is. The price is not, within reason, the issue. I buy ebooks priced over $10 routinely. To the extent that I am price sensitive, it is what I will buy on a whim, mostly older books that might or might not prove interesting. (Currently reading “My Life in Court” by Louis Nizer, first published in 1961, having paid $4.49 for the ebook. It was a good purchase.)

    I think what we have here is the trap of seeing the word “book” and thinking “commercial genre fiction.” The market for the $3 self-published ebook is not the same as that for the traditionally published book in either paper or ebook format. I see a recurring blind spot within the self-publishing world about this distinction.

    • “ebook* means different tbings to different folks. To folks like the autbor of the recent “abomination” article ebook = Amazon. To indie author/publishers, it’s where their bread is buttered.

      It is also a market that would not exist but for the BPHs own miopia re: maximizing revenue vs maximizing reader spend and Agency. (C.f. the steady deprecation of MMPB vs TPB.) It is generally understood that Indie, Inc only took off and became a commercial force because of Agency pricing and the BPHs active deprecation of the cheaper formats. (Never mind tbe higher ebook margins.) Also, because Agency neutered (if not killed) interactive epub as a commercial force. For all tbeir whining about Amazon market share, their conspiracy *gave* it to Amazon.

      Realistically, genre is the only significant *retail* ebook market (US billions) and that is split between Indie, Inc and the BPHs. The rest of the book world lives either in print, audio, or subscriptions.

      Retail books is also a price sensitive market, hence the stagnation of the new book market all century, the lockstep growth of used book sales, and the decline in new book unit sales pre-ebook. Sure, tbere is a not-inconsiderable part of the market tbat is price insensitive, but those $3-5 genre ebooks (and KU subscriptions) by now constitute the majority of ebooks actually being *read* for entertainment. It might even be a dominant share of all books being read if we include library and PD books. Notice that the primary benchmark the BPHs advertised on is gross revenue pre-inflation and year after year any reported growth is smaller than inflation. Pre Agency they constituted two thirds of the market, these days under a third.

      Note that I specify being read, as opposed to sold, because consumption behavior is significantly different between ebook-first and pbook-first shoppers. And that is reflected in the KKR piece above: what’s the prescription for the supply chain shortages? Pre-order. Buy, sight unseen or risk missing out. Most pbook fans will do just that because with limited supply, they can always recover most of their investment by selling off the used book. Historically, tbat was the required behavior pre-ebook: buy before the book went out of print. Today eBook readers don’t need to stampede and instead, for the most part, buy for just in time reading. Or subscribe to KU or Scribd, or wait for tbe public library.

      Bottom line is the bias you cite is founded in a very specific outlook which is the result of current retail book market realities. That is where KKR lives and that is what she addresses, not the broader book market or the broader still content world. And in the world she lives, a great deal of BPH prospective sales are being lost because of ebook pricing. MACMILLAN said as much when they whined that 25% of their ebook reads are on library copies. Add to that the folks who walk away from tbe title altogether. Their solution? Window library releases until people forget about their “precious”. They are truly divorced from the realities of readers.

      East is east, west is west, yadda yadda. Those camp biases will endure unless and until pbook economics become untenable in the retail market and things actually change. I doubt it will be soon.

      • I am totally OK with writing about one’s particular scope of interest. It is entirely natural for someone in the self-publishing world to write about commercial genre fiction. But it is at best sloppy to write about it in the language of universality. This is how White American Evangelical Protestants use the word “Christian.” It gives me the hives. Even when meant innocently, it leads to sloppy thinking.

        • Fair enough.
          Just remember KKR and DWS are very clear they speak to *authors*, not publishers or readers. Beyond that, they’re equally clear their focus is on the business side of writing. Less clear is their oft-stated focus on “professional writers” looking to build a business out of genre writing. So a subset of a niche.

      • I attribute the Indie Inc launch to the decision by the publishers to reject Amazon Select. When Amazon then opened it to Independents, 80,000 independent books were added to Select in two days. Subsequent free days made gobs of money for independents, and drew in even more.

        It was an amazing thing to watch zillions of books moving so fast into Select. That demonstrated wild economic power. Nobody was in charge. Amazon was smart enough to get out of the way, let it run, and enjoy the benefits..

        • Could you clarify? Select as in KINDLE UNLIMITED?

          ‘Cause what I recall is that KDP Select was hardly a success from 2011 to 2014 and Indie Inc really goes back to 2010 when Amazon switched to 70/30 from 50/50 (a year before Select) and it really took off in mid 2011 as Amazon market share went from their low of 54% to its modern 70%+. Select was an attempt to lock in Indies to KDP exclusivity but didn’t offer enough of an incentive before KU.

          KU cemented that market share by cherry picking the most avid readers from the open market, in the process pretty much killing the bandwagon effect behind the likes of 50 SHADES. At that point the visibility advantage and the payouts (reduced as they are) started to outweigh for many authors the sales value of the epub markets. The resulting virtuous circle has institutionalized KDP in readers’ minds as the largest ebook catalog.

          Add in the monthly Prime freebies and Prime reading and Amazon has a deathgrip on the avid reader market and through them to the greater retail book market. By most existing economic theories they are (barely) on the safe side of antitrust. Their biggest exposure (aside from criminalizing large market share itself) would be the ties between KDP and KU but so far they are careful to keep the consumer side of KU and KDP separate.

          The BPHs not playing in KU has helped Amazon with indies but Indie, Inc was significant before KU was launched.

          • Select, not KU.

            Select was a howling success for authors. In those years. The way the free days were set up by Amazon, authors could set a book to free, give away a few thousand, and then get a few thousand real sales. It became a numbers and scheduling game.

            They changed it. It’s gone now. Sad. Never had it so good.

            I agree Indie Inc goes back to 2010. But I see the Select event as what really propelled it. Amazon initially offered it to publishers. They refused. Then they talked to high selling independents, but ended up allowing everyone.

            They opened it on a Thursday. That night 40,000 independent books were enrolled. The next day it rose to 89K. By the end of the next week it was 500K+.

            KU was just as significant, materially offering independents a venue publishers didn’t have. Sure there were a few who tried with published books, but they failed to make a meaningful mark. That wasn’t the struggle between independents and publishers like we saw with Select. It was a struggle between independents who wanted KU, and those who saw it as toxic.

            I’d say Select launched, and KU has kept it in orbit.

    • I don’t give a damn if the book is indie or trad pub, but I’ll only spend >$5 for a fiction e-book if I absolutely know I’ll love the book, and $10 is a hard limit.

      For non-fiction, I’ll spend more, but then I’m probably buying paper (or both). Most of the time paper is both cheaper (e.g. used) and better for me.

      • APub ebooks are tradpubbed and run $4.99.
        Quite a few small and even medium tradpubs live in the $4.99-9.99 ebook space.
        Conversely, quite a few Indies have success in that same price band, depending on genre and author fanbase.
        eBook pricing is a lot more flexible than generally presented but Amazon’s $9.99 benchmark looks to be as valid a psychological tripwire as $299 is for consumer electronics. Both mark a significant volume sales border.

  6. Terrible as it is, I only care about ebooks. If hard covers cost $100 at minimum, I just don’t care as I’m never buying another. Ebooks and their prices I do care, and I’m one who will pay $14.99 for only my 3 favorite authors. Just recently an indie author whose every book I’d bought evidently got picked up by a publisher. Books that had been $4.99 are now $14.99. Too bad, I’m done with that author unless the library picks up his books from now on, and that’s my solution to all the overpriced ebooks – library or do without.

  7. The notion that ebooks should be cheaper then paper rests on the physical production costs. It rarely considers consumer preferences for eBook features that paper doesn’t have. Consumer tastes and preferences don’t march in lockstep.

      • Exactly.
        Each genre and subgenre comes with a history and expectations all its own.
        (This applies to both content and pricing.)
        Pricing expectations are reflected in different sweet spots for Indies, mostly according to genre. It helps books find their audience.
        The BPHs single-price strategy for new releases runs only works when “comparable” is other BPH titles. Out in tbe real world, small and medium tradpubs are more flexible.

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