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This is a story about book returns. It's also a story about the bookstore system and what's not working. You'll also hear how success can crush the self-publisher.

It's not my story. I didn't go bankrupt--but I could have. What I aim to do here is tell you my experience of publishing well-reviewed books and what you might do in this ever-changing publishing world to get ahead.

Here I can't get into is how to write a really great book. Let's assume you know what you're doing, and once you write the great book, you hire a professional editor and proofreaders. Then you make your decision to either go a traditional route and find an agent and publisher or you decide to forego that and publish it yourself. Either way needs a clean, well-edited manuscript.

A quick aside: Don't assume an agent will take a mistake-ridden manuscript and proof it for you because your story is so good. You're competing with top writers who have strong and polished manuscripts. If you self-publish, don't assume people will ignore the typos here and there for your really great story. Readers get pissed off at sloppiness.

This is where my experience comes in. I've been in publishing from many angles. Right out of grad school, I became a senior editor at a small publishing house and learned publishing from the inside. My assistant and I were vigilant with the manuscripts, and I'd hire proofreaders to make sure we didn't miss a thing. I saw what the book designer and layout artist did. I worked directly with printers. I saw the publicist work every day and whoop in cheer when he booked a talk show or received other major coverage. I went to book shows and major conventions. I talked with others in the business.

Later, when I left that adrenaline-driven world and became a writer myself--that's what I went to grad school for--I found an agent who believed in me. When that same agent didn't want to represent my manuscript of previously published short fiction, The Middle-Aged Man and the Sea, because he said "there's no money in it" (he's right), I created my own company, White Whisker Books, and published it myself.

That success with great reviews led to my publishing another short story collection, Months and Seasons, and, between agents, a novel, The Brightest Moon of the Century. This is where the idea of book returns first comes in.

After The Middle-Aged Man and the Sea was mentioned prominently in Entertainment Weekly, I happened to be in New York seeing my new agent, and I visited Barnes and Noble in Union Square. I found my short story collection on a shelf. I was so thrilled that I called the corporate offices of Barnes and Noble to see how I might do readings at Barnes and Nobles all over New York. After all, if it was in one store, it had to be in all stores. (Okay, so I was naïve, but that only fueled me.)

I spoke with a woman in the Small Press department who told me valuable things, specifically:

  • That single copy of my book was a fluke, perhaps a special order that was not picked up. No other Barnes and Noble had it.
  • They did not carry my book because it cost them too much. My $12.95 book cost them $11.00 to purchase--not enough profit margin.
  • My book not only was too expensive to buy, but it was also nonreturnable. She said for a bookstore to stock my book, I needed to satisfy two criteria: that the book have at least a 40% discount to them and that the book could be returned if it didn't sell. At Lulu, my book cost just over $7 a copy to print. With the distributor adding its take, my book was too expensive. Also all Lulu books were nonreturnable.
  • Thus, there was no way I was going to have readings at Barnes and Noble stores if they could not stock my books. Readings were up to the individual stores. Contact them if and when my books met the criteria.

Bookstores were important to me because that's where something like 70% of books were purchased. The year was 2006, and Amazon was only starting to build its now enormous market share. Also in those days, eBooks were not anything real. In another few years, Amazon's Kindle would capture a few percent of booksales alone. This year, 2011, eBooks represent over ten percent of all books purchased--soon, much more.

Still, if you think about it, 90% of books are still print, so print can be big. To recap, to get into bookstores you need to give them a 40% discount and make the books returnable. I found I could do both at Lightning Source, a print-on-demand (POD) printer owned by book distributor Ingram. My short story collections at Lightning Source costs just over $3 to print, my novel, just over $5. There's room for discounts and room for a small profit.

I was excited. In theory, my books would get into bookstores. In fact, it worked, thanks to good reviews, and I've done signings in Barnes and Noble, Borders, and elsewhere.

Before I leaped into publishing this way, I looked into the average percentage of books returned. In 2006, it was around 17%. (Now it's a crazy 25%.) For an added $2 per book returned, Lightning Source would send me the book. I figured I needed a few books to sell at readings anyway, so this all sounded like win-win. Boy, was I wrong. Here's what I've learned:

  • When a book is returned, I'm having to refund the distributor's purchase price, not my printing cost. Thus, 55% of my novel's list price of $18.85 is $10.42, which is what the distributor pays me for each book it sells. Add the two dollars shipping to me, and that's $12.42 per book I give back. One hundred books returned would be $1242.00. Imagine if you have 5000 copies returned. That would be $62,100. Would you have that much sitting around?
  • I have to sell three books at bookstores for each book returned. A 17% return rate would mean nearly half of any profits are lost. At 38%, I break even--no profits. After that, I'm paying out more money than I make. It's like in Catch 22 where Milo Minderbinder buys eggs for seven cents but sells them for five cents to army mess halls. I'm selling books in theory for profit, but if too many bookstores take a chance on me and then can't sell the book, I'm losing money.
  • I learned that, yes, good reviews will get bookstores to stock my books. All of my books have received great reviews--with each book, more reviews. (You can see the reviews on my Red Room page.)
  • I learned that when bookstores stock my books, if they show cover out as they often do at Vroman's Bookstore in Pasadena, they sell themselves.
  • I learned that most bookstores stock my book spine out, meaning the title is sideways and hard-to-read. No one knows me, so people aren't looking for me or likely to pull the book out.
  • My books are competing with large publishers who have ways to have their titles cover out. They also have a sales force.
  • I learned that my novel, so far, has had a 58% return rate. I'm dying. I called another friend whose celebrity book was published hardbound at Lightning Source through a small publisher. Her book was enormously popular at one point. It's now received a 50% return rate. It's crippling the company.
  • Months and Seasons has had exactly a 38% return rate. I've made nothing there.
  • The Middle-Aged Man and the Sea has had less than a 1% return rate. I can't explain it--a good title?
  • I have made all my books nonreturnable now.

Here's what to take from this. You're not likely to beat traditional publishers in the bookstore. Why risk the returns? Why go bankrupt over good reviews?

Additionally, if you sell your book on Amazon's Kindle, you can make a 70% royalty. My books at $2.99 earn me $2.04. While those books, too, can be returnable for a few days, few ever occur. If you want to make printed books nonreturnable, you can do so, and they'll still be sold on Amazon, the place most independent publishers are finding as the great equalizer.

One other thing: there's a way to go both the traditional route and the independent route at the same time. Let's say you've finished the New Great Book and want to find an agent who will then find you a big publisher. The best scenario is that it will take you three months to find an agent, and the agent will take three months to find a publisher. You're up to six months at this point. The publisher will bring your book out in 18 to 24 months.

If you've added that up, that's two to two-and-a-half years for your book to appear, and that's under the best conditions. If you don't add an ISBN number to your book (Nielsen Bookscan tracks book sales by their ISBN numbers), then your sales won't be tracked. It's as if your book doesn't exist to the publishing industry. In other words, it's unpublished as far as agents and publishers are concerned.

Boyd Morrison had huge sales on Kindle for his book The Ark, and then a big publisher came along where he now gets big sales, both print and eBook versions. His book has been translated and sold all over the world, and he's traveled America on a book tour.  

Thus, as I'm looking for a new agent, I'm going to offer my new novel Love at Absolute Zero on Kindle starting May 16. Additionally, I may sell print copies at Lulu Press--the place I left--where I can have a storefront and sell printed books to people who want it in print. I'll hold off Amazon print sales until I have a big publisher or commit to self-publishing it.

Remember, it's not likely you'll make a killing in publishing, but if you keep quality in mind and don't just give your book away, you can make the rent. It's a variation on myth-specialist Joseph Campbell, whose years of studies led him to the belief, "Follow your bliss." Or take the Field of Dreams to heart: "Build it and they will come." Just build it right.

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That was a great explanation. I have a traditionally published book and whenever I get the bi-annual print out of sales it doesn't ever make any sense. Perhaps with your insights here on returns I can figure it out. My book has made me money though as I have an lucrative speaking career about bears that was spawned by the book.
Linda Jo Hunter
Author of "Lonesome for Bears"

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The challenge of the mid-list writer

Linda Jo, let me add to this is see if what's happening to you is clearer. In traditional publishing, when a publisher signs you up, you're given an advance: 1/3 on signing, 1/3 on an acceptable manuscript after your editor has gone through it and you agree to changes, 1/3 on publication. Let's say you're given $5,000 advance, total, and let's be generous and say you get a 10% royalty on your book that retails for $20. That means for every book sold, you get $2. To pay back your royalty, you have to sell 2500 books.

These days, that's an acceptable seller. I've spoken with respected publishers such as McAdams/Cage, and 2500 copies they expect. Five thousand sales and they're happy. Twenty thousand, and it's a great seller. Beyond, and they're making a profit.

Still, they have to expect returns, and your royalties are often held back to see how many returns there are. With returns, you lose royalties.

NPR did a great story on how publishers want to change the rules on returns--which average 25%--which you can read here: http://www.npr.org/templates/story/story.php?storyId=91461568

The people who make money in publishing seem to be the printers and the the shippers. It's crazy how books are shipped back and forth.

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Now I understand it. Books on bears sell steadily for years and years, slow steady sales, so for the bookseller this might mean they will send them all back and then someone comes in and asks for it again. Such a business! Interesting NPR piece on publishing as well . . . it sure would be fun to be able to get a preview of the writing and publishing industry in ten years. I have started writing a fiction series of about six action adventure books based around tracking that I can't help but write but I wonder. My over active imagination can picture them published into paperbacks with snazzy foil covers, or, on the other hand, perhaps found on my aging harddrive by a computer archaeologist in some dusty closet of the future, unpublished, hot property only when I no longer leave tracks on the earth.
Linda Jo Hunter
Author of "Lonesome for Bears"

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Linda Jo,

If you end up writing your fiction series, you have a few choices with what to do with it. The first is send your first book to agents, which you can find online or in "The Novel and Fiction Writers Market 2011." If your series is more appropriately children's fiction, then you don't need an agent but can submit directly to publishers, which you'll find in "The Children's Writers and Illustrators Market 2011."

If that doesn't work, you can turn them into eBooks and sell them for as little as 99 cents each on Kindle, Smashwords, and elsewhere.

And if you want print versions, you can publish them through such self-publishing venues as Lulu Press, iUniverse, and Author's House. Perhaps the best place for information on this is www.selfpublishingreview.com, which has also printed my article above.