What Will Take SPD’s Place in the Literary Community?

Distribution for small presses is inherently challenging because distribution is all about economies of scale, and small presses are by their very nature more expensive to distribute. They don’t typically publish many titles per year, books aren’t sold or shipped in high volumes, and prices may be low for some types of literary work (poetry, chapbooks, short stories, novellas). SPD charged the highest rates of any distributor by a large margin but still couldn’t stay in business without donations and grants.

Commercial distributors’ costs and requirements can be challenging for small presses to meet. And none offer the hands-on, forgiving approach of SPD. David Wilk, a publishing industry expert who runs the Booktrix consultancy, says commercial distributors today exist not just to serve publishers, but to serve retailers and wholesalers, whether that’s Amazon, Ingram, Barnes & Noble, or others. “Distributors provide a service as much for them,” he says, and moreover the rules of today’s book distribution business have been created for them.

Distributors work by taking a percentage of the publisher’s net sales. Wilk says historically distributors take 25 percent, but that cut has increased over time to as much as 30 percent. Publishers can negotiate a lower rate than 25 percent if they have a high volume of sales, but they will ultimately pay a higher effective rate due to additional fees: shipping, warehousing/storage, marketing fees, returns processing, and so on. “If I was doing a P&L [for a publisher], I’d probably put down 35 percent for distribution,” Wilk says.

Distribution power in the US has largely consolidated under Ingram, and a handful of independent companies remain in operation alongside bigger publishers who provide distribution for smaller publishers (which can lead to awkward situations). The most valued distributors have nationwide sales reps and help sell clients’ books. Others do not. Wilk says each distributor has its own formula for deciding whether to take on a particular publisher; some of the key factors are total dollar sales per year, returns rates, number of titles published per year, the reliability of the publisher, and marketing efforts. If a publisher’s average retail price is low, that makes it less economically viable as a client—the same amount of work must be done to distribute a $10 book as a $20 book.

Community of Literary Magazines and Presses (CLMP) hosted an emergency session immediately after SPD closed to get counsel and hear from two key alternatives to SPD: Asterism and Itasca. Founded by a small press, Asterism is a new distributor that charges no fees, pays immediately upon final sale, and takes a 24 percent cut. One quirk is they don’t sell into “discount retailers,” which means no sales to Amazon or Bookshop. Nor do they work with Ingram or take returns. However, they don’t require exclusivity, as do most distributors, meaning presses can still sell through Amazon or elsewhere, whether on their own or with another partner. Some during the emergency meeting wondered how a distributor could survive like that. The answer from Phil Bevis at Asterism: “We just sell the books. It is a model that works.” Asterism has already signed more than 20 new clients previously with SPD. Alternatively, Itasca works as a conventional distributor that gets the books to where they need to be, but it does not have sales reps or marketing support; exclusivity is required. They currently handle about 150 publishers.

	Distributor cut	Amazon/Ingram distribution	Sales & marketing support
SPD	40%–50% depending on annual sales	Yes	Limited
Itasca	varies	Yes	No
Asterism	24% flat rate	No	Limited
Consortium	varies	Yes	Yes
IPG	varies	Yes	Yes

Should small publishers try to do their own distribution? Joe Biel, founder of Microcosm Publishing, a successful independent publisher, thinks so. However, he already doesn’t play by the rulebook—his company refuses to sell to Amazon, for starters. He says that in 2002, he experienced the “most motivating moment” of his entire career when he received a rejection letter from SPD, the distributor reputed to take everyone. “Perhaps that was the problem” with SPD, he says, that they did mostly take everybody regardless of sales potential or business aptitude.

Biel has worked with multiple distributors over the years, but now Microcosm handles distribution in-house, and he is encouraging independent publishers to build distribution co-ops, despite skeptics saying it won’t work. “[Small presses] don’t know what’s involved in this work and thus can’t envision how easy this would be. And then the publishers would own the means of production. But it’s mystifying to them, so they stand back.” Biel recently launched WorkingLit software to help other small presses run their businesses, and he is turning the effort into a cooperative, with other solutions in the works.

Anne Trubek, founder of Belt Publishing, has also suggested (subscription required) small presses work cooperatively and look at owning the means of production in the form of digital printers or printing. She also believes SPD’s existence may have been preventing small presses from innovating and finding better ways to survive, even thrive, as nonprofit grants and university settings can sometimes reinforce outdated processes, or at least not spark needed change.

Biel believes the small presses who used SPD “saw distribution as a cost center, rather than a value chain.” In Biel’s opinion, many of SPD’s clients “didn’t understand the industry and hadn’t looked outside to see how big the world is. Yet it was all they could hope for, to hold onto this relationship at all costs.”

Adam Robinson has been running Publishing Genius Press since 2006 and published dozens of literary books over the years. His press left SPD a few years ago to self-distribute, and he wrote in a recent blog post, “If I didn’t have a new book come out one quarter, there was very little payoff from [SPD]. More importantly, they messed up their accounting a lot.” However, in a phone conversation, he described SPD as a valuable community hub that offered connections for small presses. “A publishing company wants to create as many relationships with organizations as they can,” he says—whether that’s independent bookstores, libraries, other presses, or literary nonprofits. And such relationships are critical if small presses want to be recognized and accepted, he pointed out.

But in the long run, SPD wasn’t innovating and didn’t really recognize the publishing world had changed, Robinson says. It just kept doing what it always did and became more broke over time. SPD’s new partnerships with Ingram and PSSC were supposed to bring change (e.g., better access to print-on-demand and short-run printing), but it was far too little too late.

Biel says, “I think the solution for all publishers is educating themselves on how the industry operates and how all parts of the distribution mechanism are intended to function. … As soon as I demystified these processes myself in 2018, I realized that it would be less work to do our own distribution than have a distributor. Our sales increased 59 percent in our first quarter and more than doubled in our first year—all on backlist.”

A real conundrum is that so many small presses who used SPD are run by people who have day jobs or don’t otherwise have the ability to handle distribution in addition to all the other core publishing operations. Any cooperative efforts will take time, money, and organizing—and small presses seek solutions right now.

Bottom line: Wilk says there’s a frustrating paradox these presses will always have to deal with when it comes to distribution: “The smaller you are, the higher your costs are.” While literary publishers may see their work in terms of art, not business, he says, “You’re still subject to all the rules and economics that apply.” Lependorf is optimistic we might be at an important moment in funding for literature that will echo other formative periods, such as the late 1960s and early 1970s (when the National Endowment for the Arts and National Endowment for the Humanities were created, followed by the CLMP and SPD) as well as the early 2000s. “We’ve just seen the birth of Asterism. That’s a particular model that’s going to be great for some small presses, but not all,” he says. “We might have a period of a number of other small distributors with different models being created. … If we can just get through this, hopefully good things will come of it.”