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...