Apr 24

What kinds of distributors are there?

Distribution No Comments »

In my last post, I talked about distribution being an equalizer in the publishing industry.

In the CBA (Christian Booksellers Association/ and publishers) market, the terms ‘distribution’ and ‘wholesaling’ are used interchangeably to describe a supplier, or middleman, who buys books from publishers and manufacturers and then resells them to retailers. And while the supply-chain function of the distributor and wholesaler are similar, there are some important differences suppliers need to know to make their businesses more profitable.

Wholesalers bridge the gap in the supply chain between the supplier and the retailer. Wholesalers provide a service for retailers. The strengths of the wholesale model are the tens of thousands of titles that can be purchased from one source, in one box, on one invoice – many times shipping with free freight. The most important factors in determining whether to use a wholesaler or which wholesaler to use are:

  • Selection (or fill rate – plenty of titles to draw from and the inventory available to fill them)
  • Speed (how fast you can get your selection form order time – wholesalers average 2-3 days, publishers 7-10 days)
  • Service (low minimum orders to qualify for free freight)

Distributors provide an additional important service to the industry by representing product lines. Here are some benefits to look for with a distributor, or company that handles a publisher’s third party logistics (3PL):

  • Distributors take publishers’ and manufacturers’ product lines and combine them with the best services of a wholesaler. (speed, selection and service)
  • Discount (all of the above at a publisher discount)
  • Direct representation (may include a sales team calling on retail clients)

Both types of supply chain companies are important to a supplier’s success. Suppliers/publishers need to consider the costs of trying to do their own distribution and juggling all that it entails, against the benefits of partnering with professional distribution companies. Sometimes, you can find both a wholesaler and a distributor under the same roof, which can be a huge benefit.

Tagged with: • • •
Apr 19

I want distribution, now what?

Distribution 2 Comments »

What does distribution really mean? In traditional publishing, the larger publishers do their own distribution to multiple sales channels, usually from a warehouse that they control. Smaller publishers may use a smaller warehouse combined with a contract distribution facility.

Distribution can be a great equalizer. The larger publishers have direct distribution relationships with retailers, where they ship directly from their own warehouses to a retailer. This works well if the publisher has a large list to present, or well known, best-selling authors. The retailers feel like they don’t have a choice, but to order direct for the extra discount that they perceive as more important than broader product breadth.

The large publishers also use wholesalers to ensure that their retail partners can get rapid replenishment on titles, and to stock the ‘long tail’ product where a store may only want 3-4 units per year.

A small or micro publisher can usually get access to a wholesaler like Ingram or STL Distribution, but this doesn’t mean they are being ‘distributed’. This simply means that a book might be sitting on a distribution shelf, and listed in the database. Many times, it means that the major retailers have the title listed on their own databases and can order the title, even if they don’t have it in stock. But the book has never been ‘distributed’ so that the end consumer can find it at a retailer and buy it.

I spent two years as the Senior Vice President of STL Distribution, the largest Christian book wholesaler and 3PL (third party logistics or contract distribution) distributor in the country, if not the world. At the time, they had a huge European operation that has since been sold. STLD purchased FaithWorks in 2005, which at the time, was one of the first Christian 3PL distributors in the industry. This is the model that helps the small publisher get closer to the true distribution.

Successful 3PL operations have true sales and marketing components and represent the services that most large publishers have internally. I know the team at Advocate Distribution Solutions (the 3PL division of STL Distribution) pretty well. I hired some of them. If you think that is a fit for you, let me know and I will make an introduction.

In my next post, I will talk about the differences between wholesale distribution and contract distribution. Each is a good model, but built for different purposes. But, they both become really powerful when combined in the same box, which is what STL Distribution is doing.

Tagged with: • • • • • • • •
preload preload preload