Distribution anomalies at Baker & Taylor and Amazon may affect short-term revenue for publishers and authors
In May, Baker & Taylor, one of the biggest book distributors in the US, announced it would stop serving retailers and instead focus on the library market. In effect, the change leaves the US industry with one national book wholesaler: Ingram. (Here’s our item about that.) At the time of the announcement, the main concern was how independent booksellers might be affected; however, both Ingram and publishers quickly mobilized to offset any immediate costs of the change, and we’ve seen no further commentary.
However, what we didn’t discuss in May was the potential negative aftereffects on authors and publishers. And those have now arrived. We heard from a New York Times bestselling author that Baker & Taylor’s returns of her most recent book (released this year) began in August and now amount to 60 percent of their original buy. Previous books by this author were returned at around half that rate.
Returns during third and fourth quarter are fairly unusual, as stores are gearing up for the holiday season—the best-performing time of year for most publishers. Heavy returns are more common in February, after the shopping season. So we checked with numerous industry sources—agents, publishers, industry organizations, and service companies in a position to see actual numbers—and while they weren’t willing to go on the record, they confirmed high Baker & Taylor returns. (One publisher used the word slammed.) The returns are related to Baker & Taylor’s closure of two warehouses in Reno and Bridgewater.
If there is a silver lining, the issue may be less about lost sales and more about adjusting to a new cash flow, as one publisher noted. Meaning: the revenue will still come, but it will be from different sources and over a more varied timeframe. One assumes or hopes that any book sales normally fulfilled by Baker & Taylor will now be fulfilled directly by publishers or by Ingram, or maybe even by smaller operations, like Bookazine. We asked publishing consultant Thad McIlroy about the problem. He wrote us, “Unless stores begin to report that they can’t get their orders filled in a timely fashion, there’s not necessarily an issue. We did see a report last week that book sales at retail are continuing their modest 2019 downward trend (2.3 percent in September). … Wholesale data often is a leading indicator of troubles down the road at retail, but the retail data is what I find most concerning.”
Speaking of retailers, publishers have been holding their breath as they wait for Amazon orders to pick up again. Jim Milliot of Publishers Weekly first reported on Amazon’s reduced orders from publishers, a result of “congestion issues at its warehouse” ahead of Black Friday. For some publishers, orders were down by as much as 75 percent. But after a couple weeks, by Nov. 21, everything had returned to normal. Milliot ran an update, and the publishers and distributors we reached out to said their year-to-date sales numbers are now catching up with where they should be.
Still, Anne Trubek of Belt Publishing devoted an entire newsletter to the order blip, which reveals the dependency of the entire publishing ecosystem on Amazon. She writes, “Over the past 12 months, Amazon is responsible for twice as many net sales as the #2 customer on our list (Ingram), and Ingram has sold twice as many as #3 and 4 (B&N and Baker & Taylor, respectively). #5? Amazon again, this time for ebooks.” IBPA, the independent publishers association, released a statement prior to Amazon reopening their order spigot, saying, “This event should be a wake-up call for publishers to diversify their sales channels, to push consumers to other retailers, to advocate on behalf of local independent bookstores, and to be mindful about their own purchasing decisions as we approach the holiday season and beyond.”
Bottom line: The author who raised the red flag with us noted that this is a one-time hit, but a big one with some potential to affect year-end numbers. We’ll be keeping an eye on publishers’ year-end reports. Authors receiving royalty statements should expect a higher returns rate if Baker & Taylor has been a significant account for your publisher. As for Amazon, we’ll leave you with some calming words from McIlroy, who told us that lower stock levels don’t necessarily mean out-of-stock situations. “Clearly lower stocking levels correlate with that risk, but Amazon does a great job at inventory control, so this doesn’t strike me as super high risk.”
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.
