Thursday, June 15, 2006

Remainders

This morning, I finally got the letter.

Dear Mr. Konrath,

We are about to offer the hardcover edition of Whiskey Sour for remainder. We will be sending you twenty-five copies gratis. You may purchase up to one hundred additional copies at the courtesy price of $2.00 per copy, plus freight. Should you wish to purchase a larger quantity, we would be happy to discuss pricing and terms. Payment must be rendered by credit card at the time of purchase.

It's been two years since Whiskey Sour came out, and since just about everything is eventually remaindered, I can't feel too badly about the situation. In fact, there are several good things about it.

Before we get to that, let's explain what remaindering actually is.

After hardcovers are printed, they're warehoused. Warehouses are very large buildings with very many shelves which hold millions of books. Even though they're huge, shelf space is still limited, and therefore valuable.

A 20 copy carton of Whiskey Sour measures 10" x 11" x 16". By using a system known as math (it apparently is still being taught in schools) we can figure out that 2000 copies of Whiskey Sour would take up some serious space: 83 feet wide, and 91 feet high. That's a lot of unsold Whiskey Sours.

After the paperback is released (or after an undetermined length of time), hardcover orders dwindle down, and the book can no longer monetarily justify the space it occupies. It's time to be remaindered.

Remaindering is selling the books at a loss, to recoup printing and shipping costs. Authors get no royalty for remaindered books. They're sold in bulk to bookstores and discount outlets for about two bucks each, and then those outlets sell them for around $2.99 to $5.99.

The discount aisle in chain bookstores are all remainders. So are those strip mall stores (usually just called BOOKS) that have tables and tables stacked high with unorganized books. Borders also has a new concept called Borders Outlet which specifically sells remainders.

So what does this mean to you, the author? A few things. Let's start with the bad.
  1. You don't get paid for a remaindered book, even though it is sold.
  2. That edition of the book is no longer in print, and once it's gone, it's gone forever.
  3. A large number of remainders indicates the book didn't do as well as expected.
  4. Being in the bargain bin has a stigma that isn't pleasant.

But there are also some positive things about being remaindered that many authors don't consider.

  1. You get to buy copies of your book really cheap, but they have the potential to be very valuable later on--especially first book/first edition.
  2. People will discover your series on the remainder table.
  3. The more books you have in circulation, the likelier you are to be read.
  4. Any book you have on a shelf--remainder or otherwise--is an advertisment for your brand.

How many books should you buy? I've spoken to many authors, and they all have told me that they wish they bought more, with a few notable exceptions. The exceptions were the authors who bought every single copy of their remainders. This is a bad move for a few reasons:

  1. Where you gonna put them all, Einstein? Warehouse space costs money, remember?
  2. If you horde all the books for yourself, you're missing out on the opportunity to have readers discover you on the remainder table.
  3. How will you ever get rid of two thousand (or more) books? If you gave away a copy every single day, it would take you over five years to unload them all. If you're trying to sell them, to get your investment back, it will take you even longer, and every event you attend for the next ten years you'll be lugging around your books.

I've decided to buy the hundred copies, and let the rest hit the remainder shelves. I'll store these in my basement, and wait for the price to skyrocket years from now when I become a superstar (or I'll donate them to libraries as a tax write-off when my ship sinks--one of the two.)

Believe it or not, remaindering isn't the worst thing that can happen to a hardcover. Before we get to that, let's talk about shipping, and waste, and profit margin.

A $22 is sold to the bookstore for $13. If there's a distributor involved, they get a cut. That leaves $9. A $3 chunk of that gets paid to the author, and the book costs about $3 to print and ship (this number goes down depending on the size of print run, or goes up depending on the size of the book.) That leaves the publisher with a $3 profit per book... sort of.

Publishing isn't like other businesses, in that it allows returns. So if a book doesn't sell, the bookstore sends it back and gets a credit from the publisher to purchase other titles.

The book is returned to the warehouse where it is shipped again when it is ordered again--at the publisher's expense. Shipping is costly, and can be $1 per book or more.

A book can be shipped back and forth several times, and then it starts to get ripped and worn. When that happens, it can be sold at a discount as damaged, or it can be given a fresh new cover and shipped out again.

As a business model, this stinks. And the savvy among you will see that after the third back-and-forth, the publisher is no longer making a profit.

This can open up a discussion about why publishers print more copies than the market demands, but that's a blog entry for another day.

Even after a book is remaindered, and sold at a loss, it can sometimes be returned yet again. It's a wonder that publishers ever make money.

If that happens, and there are too many books left over after the remaindering, a book's final fate is assured---the pulping machine.

When I visited the Time Warner warehouse last year, a spoke to one of the higher-ups about the pulping machine. Entire pallettes of a Stuart Woods title were being dumped into this giant machine, and the guy proudly remarked, "It pays for itself in recycled paper."

I was horrified. Horrified at the huge waste of money to print and ship those titles. Horrified at the destruction of perfectly good books. Horrified at the matter-of-fact way he spoke about this, because the pulping machine worked 9 to 5 and was rarely turned off.

Suddenly, remaindering doesn't seem all that bad...

35 comments:

M@ said...

Apparently math isn't being taught very well. 100 cartons of Whiskey Sour would take up 176,000 cubic inches, or a stack about eight and a half feet wide and deep, and thirteen feet high.

That's still a lot of warehouse space, though, when it's jostling for room with a few hundred other books.

christopher said...

Joe -

"Whiskey"'s been on the remainder shelf here in Massachusetts for about 2-3 months now at the local Building 19 (a chain of very cheap discount stores). So I've been snapping up copies here and there to pass out to friends. It's a good way for me to spread the Gospel of Joe.

Bill, the Wildcat said...

A very interesting entry. I worked in a Barnes & Noble, and I still didn't quite understand how the bargain section worked... at least in terms of what happens to land the books there at such a reduced price.

Your points to the positive are very valid, especially the point about promotion for a writer and series. I think one of the drawbacks, speaking as a reader tight on cash... I have on occasion seen a book I want in hardback and said to myself, "Y'know, I'm just gonna wait for it to become a bargain book." That's risky since not all books get there, but it's a mentality I'm sure others share.

Have you ever done an entry on stripped paperbacks? Talk about horrified! The first time I was told to strip a paperback, I was aghast at the fate of these books.

PJ Parrish said...

Damn, I shelled out good money for Whiskey Sour. NOW you tell me.

Seriously, I wish I could say I feel your pain, Joe, but one good thing about being pubbed in paperback original is my unsold stock goes RIGHT to pulp. So there's less existential angst.

But I DO fear your frustration. What a stupid stupid waste this system is. I hate to say this, but print on demand may be the only thing that ends up saving this business. (The technology NOT self-publishing.) It makes great sense to be able to walk into a bookstore, pick out a cover facsimile, take it to the clerk and five minutes later, a machine in the back splits out Rusty Nail.

I doubt it will happen in our book lifetime, sad to say.

Soldier on, dude.

Richard said...

Joe (if as a newbie I may call you that?)--

You might want to offer some on ebay as "signed by the author." You could even customize it for each reader who orders a signed copy. Then, you can turn a profit on each sold. About twenty years ago, I went to a reading and book signing by Harlan Ellison at a college and he was hawking several boxes of remainders, all to his profit--very shrewd!
--Richard

JA Konrath said...

Hi Christopher--

Previously, 500 copies of Whiskey were sold at a discount to various otlet stores, marked as 'returned and damaged.' I've seen these in stores before, and they didn't look damaged in the least...

But this letter signlas the official remaindering, which means I'll soon be in bookstores all over.

Thanks for spreading the love! I encourage others to do the same. And often.

JA Konrath said...

Bill & PJ--

I've talked to two bookstore employees recently, and they've told me that paperbacks aren't being stripped much anymore--that they're being returned intact.

I don't know if this is widespread, but if so it's a good thing.

A better thing would be the POD technology PJ mentioned. I don't believe it has to be a printing kiosk where you pick titles. I think POD machine can be back at the home office, and books could be printed to order.

Cost is still a problem--it's still cheaper to print a gazillion copies and destroy half than print each copy individually. But there is already a business model in place for no remainders/destroyed product.

My audiobook publisher, Brilliance, is self contained.

From one location they manufacutre, store, and ship their audiobooks.

They keep a small stock on hand for orders, and then produce small batches of recordings as needed. When audiobooks are returned, they are placed back in stock to be resold.

No waste. No remainders. No loss of product.

Now here's the problem if print publishers were to try this:

First, a large print run means a large number of books shipped. If a bookstore gets 50 titles, they'll display them, and these displays are self-fulfilling--they sell books.

Second, the return system allows bookstores to buy in quantity without fear of losing money. if there were no returns, bookstores would be more choosy, they would order less, and they wouldn't have the large displays. This could potentially hurt sales, and drive midlist authors even further out of the business.

If POD was used, there wouldn't be a lot of books shipped *hurting sales) and they likely wouldn't be returnable (hurting sales.)

Unless the business model changes dramatically, we're stuck with what we got.

JA Konrath said...

Ah, that math thing. I had too many multiplications. Fixed it, thanks.

David J. Montgomery said...

Don't forget the inventory tax, which made the stocking of old books even more of a money-losing proposition.

I discovered several of my favorite authors over the years, including Ross Thomas, from the remainder bin. Ultimately, I think it's an excellent way to reach new readers. So, although it can hurt, it's another pathway to the audience.

Stacey Cochran said...

This can open up a discussion about why publishers print more copies than the market demands, but that's a blog entry for another day.

It is interesting how many people have told me what a bad thing POD is -- especially for new writers.

But I stand by this line, if you POD your first few novels (even your first fifteen novels) and you build a readership you can count to buy your books each year, then when Big Traditional offers you your first book contract, you've got that readership you can count on to buy out your hardcover print run.

It may seem like the absolute slums, but a writer could do worse than building a readership with a POD printer like Lulu.

Stacey

P.S. I'm holding onto my signed first edition Whiskey Sour and Bloody Mary. Those suckers are gonna be worth a fortune one day!

Richard said...

I've just referred to this post on remaindering on my blog at http://satorikick.com if that's okay! Also, I'll be at TFest and hope to get a signed book or two myself.
--Richard

Mary Stella said...

Not all of the books at the Borders Outlets are remaindered. The Outlet I walked into also stocked some new release paperbacks.

I love collecting first edition hardcovers. Even though I already own Whiskey Sour in pback, I may have to look for one of those hardcover copies, too.

JA Konrath said...

On an unrelated note, thre's an article about me at http://www.wired.com.

Richard said...

That's an excellent article! Here's a hyperlink directly to it:

JA and his GPS...

JA Konrath said...

My Amazon numbers spiked for almost twenty minutes after the article went live...

Jim Michael Hansen said...

Being in the bargain bin has a stigma that isn't pleasant.

Joe, this is the only comment where I'd take issue with you. I don't think there's any stigma associated with the fact that a book goes though a life cycle. Former bestsellers get remainered every single day. In fact, the remainder table is usually the best place in the bookstore to find good reading.

Steve said...

Sing along with me Joe.

"Bargain book Good!"

Some people only buy bargain books of authors they're unfamiliar with. These folks then become hooked on said author and when they see there's one or two (or twenty) other non-remaindered books available, they buy those too.

Then, they don't want to wait the year for the next paperback release, so BINGO! you've got them on an annual hardcover purchase buying cycle.

"Bargain books are good!"

Amra Pajalic said...

I don't think there's a stigma with bargain books either. I'm one of the readers that Steve referred to. I've found plenty of authors via the bargain bin and become addicted to their writing. Because there are so many huge authors that appear in the bargain bin it doesn't really mean anything, apart from the opportunity to buy bargain book.

Richard said...

Hey Joe--Could you explain how you know about the Amazon spike? Just curious!

JA Konrath said...

Hey Joe--Could you explain how you know about the Amazon spike? Just curious!

Four Pack of Jack jumped up from 50 something to #5, and is now still in the top ten. Since I'm not doing anything new on the promotion bandwagon, I can attribute that to the Wired article.

Allison Brennan said...

I picked up BLOODY MARY today. Not my fave drink, but your book was on the new releases table AND my Borders had ordered 12 copies total, so that's a good order.

I can't promise I'll read it in the near future (you should see my TBR shelves) but at least you can add another 59 cents against your advance.

Wesley Smith said...

Thanks for this post, Joe. I've always wondered about bargain books in either the local B&N or Half-Price Books. Especially with H-P, I'd wondered how they'd suddenly gotten three dozen copies of a five-year old hardcover written by some mid-lister.

And since almost all my books are purchased at used book stores, maybe I'll pick up that hardcover edition of Whiskey Sour now.

Barry said...

Joe, could a body be disposed of in the pulping machine?

Jude Hardin said...

I troll the remainder tables frequently. A few weeks ago, I scored a first edition hardcover copy of Michael Connelly's THE NARROWS for six bucks. So cheer up, Joe. You're in pretty good company there in the bargain bin.

Jude Hardin said...

Barry: LOL. Talk about a slush pile...

Maia said...

Congrats on the Wired article, Joe. That's Nerd Nirvana!

Maia

JA Konrath said...

Barry and Jude: talk about Pulp Fiction...

Thanks for pickign up my book, Allison! And thanks to all who offered their insights on the remainder table.

S. W. Vaughn said...

Let's start a "Save Joe from the Pulp Machine" campaign. Everyone run to their nearest bookstore and buy Whiskey Sour remainders. Give them away to friends and get people hooked on the series.

Joe, if I send you a hardcopy will you sign it? :-) I'm afraid Thrillerfest is a bit outside my budget...

Abe Munder said...

Congrats on the Wired profile, Joe.

I'm sure I don't understand the ins and outs of this, but it seems to me that where you would really lose is if a paperback goes out of print, stripped, remainder, etc. That's an irrecoverable loss of real estate, as you put it, on the bookshelves. The eventual termination of a hardcover title would seem to be part of the normal publishing cycle; that is, a natural migration once the paperback becomes available.

But I keep reading here and hoping to learn more. Thanks for sharing your knowledge.

Aimless Writer said...

I found Evanovitch on the clearence section of a bookstore years ago. Now I stand in line salivating for each new book as it comes out.
I might never have seen it when it was in the back on the shelf. . .

J. Carson Black said...

Congratulations, JA! It's always great to have another book coming out, and yours looks like it will go gangbusters. You're doing everything right, and I think your karma's going to be excellent, especially because you've helped so many of us in so many ways. You are a truly generous person, and deserve all the good things you get. I'll be out buying my copy of RUSTY NAIL the week of the 5th.

Go, Rusty Nail!

J. Carson Black said...

Dang, I scrolled down to the bottom of the latest blog---where you're talking about RUSTY NAIL coming out--- and must have scrolled down too far. I just answered the wrong post. :(

Anyway, my congratulations on your third book coming out remains the same, even if it does seem to be off-subject.

Jimmie Hammel said...

Maybe you could pass your remainders out at restaurants with the waitress's tip tucked inside. Even if she doesn't want it, she might pass it along to someone else.

Lenore said...

Thank you for this post, really worthwhile data.

LearnDogGrooming.com said...

Hi Joe K.
Read your article "Remainders" which is really timely for us since we are faced with the same problem on a personal basis. We have succeeded in selling 4000 books, that we have self published, via supply catalog dealers Amazon.com, and through our web site www.LearnDogGrooming.com Its a $34.95 retail paper trade manual. The bulk of our supply sits in the book printers, note I didn't say publishers, storage building awaiting our fulfillment orders. For some unknown reason orders for this self training manual have stopped like a light being turned off, snap!
At this point in time we have been wondering about slashing the price to allow "investors" to get in on the profits. You see this first edition is the only book of its kind to have ever been recommended by BOTH he National Dog Groomers Association of America AND the PA SPCA , as well as other notables for its superior educational content. Just wondering if any other elf publishers have ever tried packaging up lots of 12 to sell for under wholesale price. Any marketers interested can get in touch with me at prospecial@protectiveSpecialties.com