As the world deals with the specter of inflation—with energy, materials, and labor costs all increasing—representatives from Ingram predicted (safely, we think) that book prices are bound to increase in the year ahead. That prediction was part of a panel Ingram hosted earlier this month to review 2021 trends and performance and offer publishers guidance on 2022 and beyond.
Ingram is the biggest book wholesaler and distributor in the US, with a history going back 50 years. It distributes in the US and UK and has a print-on-demand presence or supply relationship in many countries. As such, it offers a global perspective on the challenges ahead. Senior VP David Taylor, based in the UK, said that the world hasn’t seen inflation hitting like this since the 1970s and that publishers must consider what costs can be cut. While nearly every country around the world is experiencing inflation, the US is rather far up the scale in terms of inflation percentages, ranking highest after Brazil and Turkey.
The effects of inflation and the tightness in the labor market are, of course, affecting all of the materials needed to manufacture books. There’s not any part of the book that’s immune to those pressures, said Ingram senior manager Janice Butler. Overall, there was about a 10 to 12 percent increase in paper costs in 2021, and there have already been increased costs in 2022. “It’s going to continue to travel upward for a bit longer,” Butler said, due to labor costs, shipping delays, and printers closing or shifting to corrugate (shipping boxes).
How much might prices increase? Butler said there’s not much data yet to offer insights into an average. Moreover, price changes will necessarily differ from catalog to catalog. A publisher with an enormous catalog of titles that move quickly might make modest price increases across the board and see a sufficient return. But a publisher with few titles may have to be more aggressive. And of course there are also category and format considerations. Some categories can better withstand an increase, while others have greater price sensitivity.
In addition to implementing price increases, publishers are shifting to local manufacturing. Butler said an increasing number of publishers are printing in the destination market to supply titles. That’s because the cost of container shipping has gone up 50 to 75 percent, with it now taking about 16 weeks to ship a container from Asia to the US. (In the pre-pandemic era, it was four to six weeks.) “Those transportation delays and the costs are all starting to drive new behaviors in our clients and publishers,” said Butler. On the positive side, such changes are seen as imperative for industry sustainability and to reduce publishing’s carbon footprint.
Publishers must carefully review their catalog when making printing decisions. Butler suggested that backlist titles might be better shifted to digital printing or print on demand so that publishers can reserve precious offset printing for frontlist (new) titles. Ingram director Pete McCarthy emphasized that it’s important to think about and work the whole list, not just frontlist, when it comes to both supply chain and marketing. “Consumers in the US now buy two backlist books for every frontlist book,” he said. “The rewards can speak for themselves pretty quickly.”
Publishers may also need to reduce the size of print runs—which leads to price increases as well, since the unit cost goes up as the print-run numbers go down. Butler advised “printing to sales” rather than “printing to stock.” That means publishers should print what they can confidently sell in the near term. “If you don’t have a big amount of stock sitting in a warehouse, you’re not going to incur excess inventory fees. You’ll have more flexibility if you need to change pricing or change paper stock.”
Bottom line: Unlike some other sessions we’ve attended on supply chain issues and print costs, this one actively discussed how publishers should invest in digital formats for the increasingly likely scenario when a print book isn’t available. Ebooks and audiobooks have doubled in market penetration in the last 10 years, and most Americans are omnivorous in their format choice: only a third buy and read print alone. While some industry stats (like those from the AAP or BookScan) show ebook sales declining, such stats can be deceptive. McCarthy said a lot of publishers enjoyed ebook sales growth in the last year, and he believes digital reading definitely grew once you factor in library lending; subscription services like Kindle Unlimited, Kobo, and Scribd; and reading platforms like Wattpad. This activity “is happening in a place that’s very difficult for us to see. But it’s digital reading. And it’s a consumer trend and it’s a massive one,” McCarthy said.
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.
