Feb 25

Five Reasons Why Today is the Best Time to be a Writer

Authors, publishing, Retail No Comments »

Last fall, I attended the ACFW (American Christian Fiction Writers) conference in Dallas Texas, and had the opportunity to present a seminar titled: ‘Authors and Retail – How does it all work?’ During the past 18 months, I’ve had the opportunity to speak to a number of author’s groups at industry events about the ‘business side of publishing,’ which is a subject that most authors do not understand.

Publishing, after all, is a business. Authors whether or not they are getting the opportunity to publish through a traditional publishing contract,

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or are choosing to self publish their work, need to understand how the business works, especially when it comes to retail. Authors have the opportunity to dramatically affect their sales by working with retailers and understanding their needs. I will write about this topic in next week’s post.

While at the ACFW conference, I had the privilege of hearing Michael Hyatt address a room full of authors, and his topic was encouraging. I recently ran across my notes from Hyatt’s session where he shared five reasons why TODAY, is the best time to be a writer.

  1.  It is easier than ever to do the writing. More than ever before, there are conferences to attend and books to read, that teach writers how to craft their projects. Word processing and other computer programs have made is easier to get the words on paper, and go back and edit and polish without have to start over.
  2.  It is easier than ever to do market research, and engage with readers. The internet has provided a virtually limitless supply of research tools, and Google has made it possible to find almost any information a writer might be looking for. Social media, through platforms like Facebook and Twitter, have made writing and engaging with other writers and fans, a personalized experience.
  3. It is easier than ever to get into print. Traditional publishing with its royalty advances, editing schedules, marketing cycles, and traditional distribution channels, is no longer the only option. Self publishing is a viable and thriving industry for writers who choose to go this route. Self publishing is not the best option for everyone, but the same can be said for traditional publishing. Traditional publishing is also far from dead, however, the model must continue to change with the times rather than run from new ways of doing things. Both of these models are providing writers with new opportunities, which translate to more readers in more places.
  4. It is easier than ever to build a tribe. Authors can talk to their fans and have direct access to them through blogs, websites, and social media. Reading has now become a social activity and people engage around content like never before. Authors are engaging readers around their book platform.
  5. It is easier than ever to build a business around author content. This is only true, however, if authors take the time to understand the industry, and how to build their business model. The first step in the writing process, before outlines, character development, and research, must be a business plan that helps an author identify a sustainable market (group of buyers), where they can be reached, and what they are looking for.

This is a great lead-in for next week’s topic on the publishing business. Would you add anything to this list?

 

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Nov 26

The five best reasons to launch your Facebook bookstore

Marketing, publishing, Retail, Sales, Social Media No Comments »

As many of you know, Snowfall Press has created a Facebook Application that enables you to launch a bookstore on your Facebook fan page. This sales tool gives you the opportunity to create an easy, online bookstore for anyone to buy from. In fact, you can send the link (URL) from a book to a friend, or link to an image on your own website, that will take a consumer back to the product in your Facebook bookstore, where they can place their order.

If those reasons were not enough, here are five ‘best’ reasons for using Facebook.

  1. As of press time, Facebook is still free. It is free to set up a fan page, and free to load as much information about your book and about yourself on that page. The actual cost to begin marketing your content to others is pretty low if this is part of your strategy. Use your website as your main battle camp, and Facebook as your nimble outpost.
  2. More than six BILLION minutes a DAY, (more than an hour per day per user) are being spent on Facebook. Are you able to generate that sort of traffic on your website? Be where your customers are, and learn to get their attention.
  3. The average Facebook user joins two new fan or business pages per month. These pages can be used to promote your business and your writing.
  4. Facebook tools like Facebook FAN BOX and Facebook CONNECT enable interaction with Facebook, from outside the social media tool. By setting up a Facebook FAN BOX, visitors to your website, newsletter, or YouTube can become a fan of your business page without actually visiting Facebook. This has proved to be a very effective way for business to gain more fans via their website, videos, and newsletters. Facebook CONNECT is a program in which enables Facebook to interact with other sites. There are 80,000 other sites that can be connected through Facebook Connect.
  5. Your Facebook posts can go viral. No, not in the disease type of viral, but in the spread rapidly and uncontrollably – viral. This is a good thing. How do you make your posts more viral? Most people post links to things. However, most people engage with pictures and videos. In fact, photos are five times more popular than links, and videos are TEN times more popular than links.

Why do you use Facebook?

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Oct 31

Facebook Bookstore Application

Authors, Marketing, Retail, Sales, Technology, Uncategorized No Comments »

Snowfall Press is first and foremost, a technology company. We produce technology for printers who want to be part of the Snowfall Print Network. We produce technology that makes it easier for authors and publishers to print their own books. We produce technology that enables authors and publishers to distribute their books across the globe, whether it is to readers or retailers.

One of the key technologies that Snowfall has recently released is called the Snowfall Facebook Bookstore Application. This application is available to any Snowfall Press customer who has both books for sale, and a Facebook Business or Fan page. The application creates a bookstore on the fan page, where fans can purchase the book directly from the author or publisher, and the order is printed-on-demand through Snowfall’s system, and drop shipped directly to the customer.

I was recently interviewed about new technology, and I talked about this new Facebook feature for authors and publishers.

 

 

For more information about the Facebook Bookstore Application, click here.

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Oct 15

How to sell to book retailers…and which ones work best

Authors, Distribution, Marketing, Sales No Comments »

For many independent publishers, the reality of getting books placed in most or even some retailers is an uphill battle. I recently presented a seminar to a group of authors, about some of the realities of selling to book retailers, how each retail sales channel works, and what retailers (from my own sales experience) need from authors.

Realities of bookselling

On average, the local independent bookshop might carry 10-20,000 titles in their store. These would be both frontlist (new titles each season) as well as backlist titles that have been out longer than six months, and warrant still being on the shelf.

On average, large chain stores carry around 100,000 different titles in their stores, including both front and backlist.

If a bookstore brings in 25% of their inventory, as new releases (which is high, but let’s use that number for this illustration) then the local independent might have 2,500-5,000 new titles for the year. The chain will stock more based on their capacity, and might have 20-25,000 new titles in their stores.

Last year, according to Bowker, the leading publishing statistics company, there were more than 347,000 new titles released by traditional publishing houses in the market. This means less than 10% of new titles made it to the CHAIN stores, let alone the independents. Add to this traditionally published number, the number of independently published titles, which Bowker lists at more than 1.1 million new titles in 2011.

It is easy to see, that landing a book, traditionally published or not, in a bricks and mortar retail outlet, is pretty close to the same odds as winning the lottery.

Different retail channels

So what is an independent publisher or author to do? Authors should spend their limited time and resources building a platform and a tribe. A lot has been written about both subjects. I would recommend the following two books to start: Platform by Michael Hyatt, and Tribes by Seth Godin.

Retailers, no matter what channel, EXPECT an author to market to their own tribe. If you build a following however, these fans are just as likely to buy direct from you, or from an easily accessible online retailer like amazon.com or bn.com. I was surprised to recently learn, that christianbook.com is the third largest online bookseller in the world. Authors can work directly with amazon.com by using their Advantage Program which allows independent publishers to sell to Amazon on consignment.

In some cases, I have seen Christian Book Distributors, or christianbook.com, work with smaller independent publishers direct. If they choose not to work with you, they will work with distributors like Advocate Distribution Solutions to purchase product from independent publishers and authors. Either way, you can still offer your books through these retail outlets to augment the sales that you are doing direct.

What do retailers expect?

Retailers expect to work with publishers and authors who create great products, from both an editing and design standpoint. And, these products need to sell. Books that don’t sell, aren’t going to stick around. Retailers also expect to work with a professional who know THEIR business. They expect to see the following information:

  1. What is your business plan? Who is your market? What marketing do you need to do? When do you release the book? Where do you concentrate your sales efforts? How many do you need to sell?
  2. What is your promotional plan? Retail is ruled by demand. If a product is in demand, the retailer wants to sell it. If a product is not in demand, the retailer does not have the time (in most cases) to help create the demand for a product. How do you make your book stand out in the middle of the hundreds or thousands of other books that are on a similar topic?
  3. What is your release plan? This timeline is one of the most difficult concepts for authors to understand. Retailers usually need 6-9 months to plan for new titles, although online retailers can be more flexible than that. Marketing and publicity needs time to implement and planning this at the last minute usually means wasted effort and resources. For more on how independent authors might look at publicity, see my recent post called ‘Don’t rush your publishing plan…especially if you don’t have one.’

What is your own experience with selling books to retailers?

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Oct 08

Authors can drive ‘discoverability’ with their books

Authors, Marketing, Retail, Uncategorized No Comments »

I ran across this information in a news post, put out weekly by Rob Eagar, owner of WildFire Marketing. He can be reached at Rob@StartaWildFire.com. In his post, Rob mentions being at a recent conference and hearing Kelly Gallagher from www.Bowker.com, comment on a survey that Bowker recently did. Here is what he said:

“A survey of 3,000 book buyers found that women, ages 30 – 44, (a coveted key demographic) discover new books in this order:

  1. In-person friend referral
  2. In-person retail store display
  3. Visit author website
  4. Review bestseller lists

What does this research mean to you?

  1. Create tools, such as free resources, that make it easy for people to tell their friends about you.
  2. Get published with a traditional publisher who can get you shelf space in the major stores.
  3. Build an effective author website.”

Of the three recommendations, both ‘1’ and ‘2’ are doable and the author is in the driver’s seat. What are ways you can help your ‘fans’ tell others about you?

  • Use Facebook to engage fans
  • Use Facebook to physically sell your product
  • Create contests and encourage your fans to share these
  • Give away content from your books
  • Engage your fans in the writing process – let them see your progress
  • Create a ‘street team’ of loyal fans who get access to special deals/content if they do certain things to help you ‘get the word out.’

Getting published by a traditional publisher is a great goal, but not something you can build your plan around. I call it the Field of Dreams strategy. Just writing the book doesn’t mean that people are going to come publish it, and eventually come read it. This solution is becoming increasingly difficult as the number of writers in the market continues to grow.

Learn to put your time and energy behind the things that you can control and that will pay dividends for you NO MATTER which publishing direction you might take.

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Aug 16

Interview with Terry Draughon at ICRS

Distribution, Industry Events, Marketing, publishing, Retail, Uncategorized No Comments »

Terry Draughon is another industry veteran who has worked at the management levels of both large publishers and distributors. His expertise is helping publishers get their books placed at retail, and being the advocate for the publisher/author in the retail channel.

Terry is the Vice President of Sales for Send The Light/Advocate Distribution Solutions and calls on all of the large booksellers and chain retailers.

I asked Terry to share some of his experience with small publishers.

For more information about Advocate Distribution Solutions, click here. For more information about how Snowfall Press partners with Send The Light (STL) and Advocate to offer expanded distribution solutions, click here:

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Aug 14

Interview with Sarah Bolme at ICRS

Industry Events, Marketing, Retail, Uncategorized 1 Comment »

Sarah Bolme is the founder of the Christian Small Publisher Association (CSPA). Sarah invited me to share a seminar with her group the Sunday before ICRS started. I had the opportunity to talk about how retail works in the publishing supply chain, and what small publishers should do to be successful with sales channels like Amazon, Barnes & Noble, other chains and independent retailers.

Sarah provides great perspective on the industry and valuable marketing tips for publishers to use to be more successful. Visit her blog for marketing tips and the CSPA website for more information about how this organization can help you.

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May 17

What does a book distributor look like?

Distribution, Retail, Sales No Comments »

The ABA (general market booksellers and publishers) has long embraced the distributor as an important way to supply books to the bookstore market. Some of the leading players in this sector include Publisher Group West (PGW), National Book Network (NBN), and MidPoint. Publishers large and small are using these ‘consolidators’ to sell and distribute their books.

Consolidation can eliminate overhead

This phenomenon is increasing for three reasons:

  1. Retailers want to use fewer vendors, not more.
  2. Retailers are free to spend more time with their own customers rather than more time receiving product, paying invoices, and processing returns.
  3. Publishers can consolidate their sales and distribution to drive costs from their own supply chain management.

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The CBA (Christian market booksellers and publishers) has been slower to see the benefits of the distributor as a long-term solution although there have been spurts of activity in the past. In more recent years Send The Light/Advocate Distribution Solutions has become an important vendor of this supply chain solution.

Wholesale replenishment business is key to a healthy retail business. Leonard Shatzkin, in his excellent book, The Mathematics of Bookselling (Sun River Press), shares his own research of booksellers who buy into the wholesale replenishment model and see their turns go from two or three times to six or more times per year. The result is a healthier business with more choices for customers, more staff time devoted to helping the customer find what they want/need, and more cash flow.

Shatzkin spends considerable time talking about the importance of inventory and the importance of measuring how quickly a store can turn the inventory dollars on the shelves into cash flow for increased investment opportunities. He says that inventory in the average store represents more than 65% of the store’s investment, or more than four times more than any other investment a store makes. It makes sense to maximize the turns by using the supply chain to do so.

The new paradigm combines wholesale replenishment with publisher distribution. This concept brings the best of both worlds to retail – selection, speed and service – along with discounts and freight options, all combined in an easy, one-source solution. Retailers can conveniently place one order with one supplier, receive one shipment and one invoice, and are provide one address for returns. Retailers can order many types of products including products from the largest publishers in the industry at competitive wholesale discounts along with some products at publisher discounts, while always receiving the maximum discount by publisher or manufacturer. Finally, the entire order combines to give the retailer the best deal on freight and payment terms.

Send The Light (STL) Distribution offers both the wholesale model and the distributor model in one-source to retailers. Some distributors offer only a handful of publishers in one box, which doesn’t allow booksellers to conduct supply-chain management across the wide range of products they need to source. In addition, other wholesalers offer order consolidation, but don’t offer replenishment on the wide range of product that retailers need (i.e., gifts, remainders, homeschool products, etc.). And most wholesalers will go to great lengths to match discounts offered by other wholesalers.

In the end, the difference will be the best combination of selection, service and speed. For authors and publishers, this is an important part of the supply chain management strategy that needs to be deployed to help booksellers be more profitable with your books.

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Mar 13

The Mathematics of Bookselling; part two of two

Distribution, Retail No Comments »

In the previous post, we looked at two bookstores run by Phil and Turner. These characters were running their stores based on two different purchasing philosophies. At the end of the year, they both ended with the same gross profit.

However, Turner had some distinct advantages.

  1. He had more  titles (breadth of selection)
  2. He ordered more often, and could meet changes in demand more quickly
  3. More selection led to higher dollars per sale at the register
  4. Fewer units per title meant less overstock and fewer returns
  5. Faster turns meant faster cash flow, and cash is king

But wait a minute, what happened to the old adage, ‘stack-em-high and watch-em-fly?’ Certainly discount is more important on hot best selling items…right?

Let’s look at a hypothetical best-seller called Laugh Out Loud (LOL). The retail price is $20.00. The publisher is promoting the book heavily, and is offering the bookstore 52% for an advance order of 150 units. The book is successful, just like the sales rep said, and the inventory sells out in six months.

Phil loves discount and he jumps at the deal.

His sales are $3,000 (150*$20)

His cost of sales is $1,440 ($20*.48*150)

His gross profit is $1,560 ($3,000-$1,440)

Phil’s average inventory investment is 75 books for six months (150/2) at a cost of $720 ($20*.48*75). Average inventory investment means the cash is gone. It can’t be used for anything else.

Phil’s inventory turn is four times/year (150 book sold in half a year).

Phil’s ROI is $1.08 for every dollar invested in inventory on the best-seller. (gross profit/cost of sales) or ($1,560/$1,440)

Phil’s annualized return is four times the ROI (4 turns/year) or $4.32 for every $1.00. Phil earned $4.32 for each dollar he invested in the LOL promotion

Turner, being a different sort, says no to the discount and buys 25 units from his wholesaler at 40% discount. He continues to order 15 units every time the inventory falls to 10 units on the shelf.

His sales are $3,000 (150*$20)

His cost of sales is $1,800 ($20*.6*150)

His gross profit is $1,200 ($3,000-$1,800)

Turner’s average inventory investment is 18 books ((25+10)/2) or $216 (18 units*($20*.6)

Phil’s ROI is $.67 for every dollar invested in inventory on the best-seller. (gross profit/cost of sales) or ($1,200/$1,800). This is considerably less than Phil’s ROI! Not only is the ROI less, but the gross profit is $240 less too!

 

Now the rest of the story.

Because Turner operated on a Just-in-Time (JIT) inventory philosophy, his inventory turn is 16.68 times/year (150 book sold in half a year divided by average inventory of 18*2 to annualize). Because of these turns, Turner’s annualized jumps to an astounding $11.34 for every $1.00. Turner earned $11.34 for each dollar he invested in the LOL promotion!

Turner was also able to use the available cash on hand due to less inventory investment ($216 vs. $720), which was more than $500 more than Phil had to work with, to buy other titles. If Turner invests this $504 at the same rate of return, he will generate nearly $3,000 MORE in gross profit during the same six month period than Phil will earn, from the same inventory investment.

Even if Turner’s additional titles only turn twice on each dollar invested, instead of the eleven turns he sees with LOL, he will generate another $334 of gross profit during the six month period, easily wiping out the perceived discount advantage that Phil thought he had

As with retail, the publisher has to consider this same math when deciding on a print model. The old ways of ‘stack-em-high and watch-em-fly’ don’t work for the publisher either. The new model utilizes short run printing and true print-on-demand options. Retailers are maybe less important for some publishers, but engaging sales through direct-to-consumer tools are becoming more important. How does this sort of math help a publisher be more nimble? Profitable?

Something to consider.

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Mar 08

The Mathematics of Bookselling; part one of two

Distribution, Retail, Uncategorized 3 Comments »

I found this post to be challenging, mainly because the process of analyzing numbers is quite a ways down the list of things that I love doing. Don’t get me wrong, I love looking at top line business numbers, especially as they relate to sales growth. But margin analysis can quickly make my eyes cross, even in the midst of being a key to business growth. However, this information is key for booksellers and I had help making is as simple as possible.

During my stint as head of sales for a major book distributor, our CEO took our leadership team through what turned out to be a crash course on the mathematics of bookselling, which we found out later, he had adapted from a monograph by Leonard Shatzkin with the same name. By asking a simple question, he helped us understand bookselling better than most people in the industry. Buckle up. I am going to share my notes from this session in two posts.

What is more important in determining financial success? Gross margin percentage or inventory turns?

Let’s look at two bookstores run by Phil and Turner. Each has $100,000 to invest in inventory.

Phil purchases his inventory from publishers at publisher discounts – we will assume 50% for this exercise. Phil has to carry more units per title to make sure he doesn’t run out when the publisher takes a week or two to fill the order, and to make sure he can meet the minimum order requirements from the publisher. Phil is happy when he achieves four inventory turns per year.

Turner is a bit of a rebel, and decides to forgo the extra discount and orders his product from a wholesaler at 40%. Turner orders a lot more often because the order processing time is much quicker with the wholesaler – his orders ship the same day he orders. The other important benefit the wholesaler offers Turner is that all of his publishers can be added to the same box and shipped together. This allows Turner to stock more titles, even though he is carrying less of each title on the shelf. As a result, Turner achieves six turns per year.

Here is where we break out the math.

Assume that Phil and Turner both sell their books at full retail, and assume their costs (rent, financing, etc.) are the same. Which is better off financially? Let’s take a look.

Phil gets 50% discount.

Annual purchases are $400,000 ($100,000 x 4)

Inventory sold four times at retail equals $800,000 ($400,000/.5)

Sales = $800,000

Cost of Sales = $400,000

Gross Profit = $400,000 ($800,000-$400,000) or 50%

 

Turner gets 40% discount.

Annual purchases are $600,000 ($100,000 x 6)

Inventory sold six times at retail equals $1,000,000 ($600,000/.6)

Sales = $1,000,000

Cost of Sales = $600,000

Gross Profit = $400,000 ($1,000,000-$400,000) or 40

In this exercise, they are equal. They both end up with the same gross profit. Does this surprise you? It surprised me. I assumed that more discount meant more gross profit. This same inventory turn concept applies to publishers who work with short run printing. The more turns, the better the cash flow, even with less ‘margin’ on a book. Reducing risk, by printing less (especially true print on demand) is not only profitable, but the way of the future.

In the next exercise, we will see some interesting things happen with the numbers that our two retailers are experiencing.

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