After Barnes & Noble was sold in 2019 and James Daunt took the lead, he quickly eliminated the practice of co-op, or cooperative advertising: publishers paying bookstores to promote specific books through in-store displays, endcaps, or advertising. Why? Co-op led to Barnes & Noble stocking the same titles across the country, regardless of community demographics or bookseller judgment. Daunt believes that approach entirely undercuts what it means to run a good bookstore, leading to high returns and lower sales.
When I worked as an acquiring editor and publisher, some of our most successful titles were able to gain traction because of that pay-to-play placement, but it did indeed generate a lot of waste when the displayed books didn’t sell. Daunt’s strategy for reviving the chain has seemed to pay off, although publishers have mixed views on the situation.
Given limited promotional opportunities via Barnes & Noble, I’ve been wondering if co-op dollars are being invested in other brick-and-mortar retailers. Are big publishers launching any initiatives to fill the hole created by Barnes & Noble? I’ll be honest: I had a hard time getting people to comment on the situation, but my overall conclusion is that the co-op dollars once spent with B&N are not being funneled to other bookstores, although co-op programs do exist.
For independent bookstores, big-publisher co-op typically acts like a rebate system or a cashback awards program for savvy shoppers, turning what might be regular operational costs into opportunities for financial recovery and increased profit. Through a simple online search, I was able to find Penguin Random House’s co-op policy from 2019. The amount a bookstore could receive was based on how much they bought from PRH during the prior year, but with caveats: The store had to get approval in writing and provide proof of any ads or promotion; in addition, the store received a credit on their account, not a cash payment. In the 2019 policy, the “rebate” from PRH ranged from 1.25 percent for mass-market titles to 4 percent for children’s books.
Indie booksellers typically find co-op programs too burdensome for the rewards. Co-op programs differ from one publisher to another, which increases the time and effort spent to understand and claim the benefits from each program. And if the store is on the smaller side, it may not order enough to qualify in the first place. The other problem is figuring out whether co-op money is even available—there is no single site booksellers can visit to learn about publisher co-op opportunities. Program information has to be found piecemeal, publisher by publisher, and sometimes stores know about an opportunity only because a sales rep brought it to their attention. Stacy Whitman, who opened Curious Cat Bookshop a couple years ago in Winsted, Connecticut, told me, “I can’t keep track of it all. … You’d think Penguin Random House would have a good system where you would know where all the discounts are—one thing on their website.” She said the situation becomes even more challenging if she’s not ordering directly through their website.
If co-op were more automated, it would be more beneficial, more doable for independent bookstores. Lane Jacobsen at Paulina Springs Books near Bend, Oregon, told me the best publisher programs offer a percentage kickback of total sales or the total amount that you’ve bought from the publisher every quarter. He praised Norton in particular, calling them a pioneer in making co-op straightforward to qualify for, with good-faith agreements (which don’t require proof that a book has been featured). The relationship becomes more antagonistic when publishers require proof that a book has been featured before the bookstore can qualify for co-op. “By definition, what we want to do is display the books [and] sell the books. That’s why we’re doing what we’re doing,” Jacobsen said. “What the hell do you think we’re doing for such a low amount of money? Those publishers that have demonstrated trust in indies—it’s appreciated by the indies.”
There are other types of co-op aside from getting a percentage back on sales. Stores can take advantage of newsletter co-op (featuring a title in the store’s newsletter), promotional title co-op, and event co-op. With frontlist in particular, stores are incentivized to buy more copies to secure a discount, e.g., a publisher might offer a $25 credit if the store buys five copies. Such promotions can be highly beneficial to the store when ordering for an author event. However, when I talked to Kris Kleindienst at Left Bank Books in St. Louis, she said even straightforward arrangements aren’t always worthwhile. “It requires a level of organization I’d say that very few average-size successful bookstores ever have time to do. … I liken it to filing a health insurance claim. It’s about as fun.”
Still, some stores have been able to benefit from co-op programs. In 2019, at an American Booksellers Association (ABA) event, Jenny Cohen of Waucoma Bookstore in Hood River, Oregon, presented a session on how her store’s profits were meaningfully lifted by investing the time to collect all co-op dollars her store qualified for. She said, “The amount of profit we made each year was relatively close to the amount of co-op I did, or more. So really, you can’t leave that money on the table.” Within several years of owning her store, she booked out $42,000 in co-op. Notably, Cohen previously worked as a financial analyst, and one thing Jacobsen told me is that participating in co-op, at times, comes down to the personality of the bookstore owner.
So how are publishers spending the money they once put into Barnes & Noble co-op? Largely, I believe those funds are being put toward online advertising, Amazon, and other digital marketing and promotion efforts. Paid placement is of course ubiquitous on Amazon; publishers pay Amazon merchandising and promotion fees plus targeted title advertising on top of that. Bookshop, the virtuous alternative to Amazon, accepts advertising on its site and in emails, as do various industry newsletters, such as Shelf Awareness (which targets independent bookstores), Lit Hub, and Book Riot. Publishers also secure visibility for titles at big-box retailers, where placement is part of a larger sales negotiation, though not called co-op.
Publisher dollars may also be going toward ABA’s Publisher Partner program, which allows publishers to get their key titles in front of booksellers at a very low cost, along with myriad ABA promotional opportunities, plus ABA’s annual Winter Institute (not to mention regional events), where publishers exhibit and promote their lead titles, sometimes paying for authors to attend and speak with booksellers.
Bottom line: Jacobsen told me, “I’ve been in the business now for 16 years, and I’m still to this day constantly surprised by how much of a bubble the New York offices are often in, for which I don’t necessarily blame them. [Indie bookstores] are 10 percent of the total market, though we have demonstrated we punch above our weight in influence and tastemaking. They just have no idea how precious of a resource time is for us. They already have really clunky antiquated bookkeeping systems and accounting systems, and their statements are difficult to parse even for retired CPAs.”
If publishers want to support the independent bookstore community through co-op specifically (and one could argue co-op isn’t the most beneficial option), they probably need to re-envision how these programs work, including the amounts offered. Kleindienst told me the co-op amounts that stores receive have remained the same over time, “kind of like the federal minimum wage. [It bears] no resemblance to real-life costs. It’s an ancient number.”
- Related reading: Learn about the history of co-op in this 2011 Publishers Weekly article by Judith Rosen.
- Meanwhile: Bookshop is launching a book sales division to collaborate with publishers’ sales teams. Nadine Vassallo-Frohne will lead the department. In a statement, she said, “Our goal is to build closer partnerships with publishers of all sizes, from major houses to independent presses. By sharing key updates like launch lists or book club selections, we can help ensure that every book has the chance to reach the readers who are looking for it—and in turn, support the independent bookstores that are at the heart of Bookshop.org’s mission.”
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
