June 7, 2005

Is opposition to returns reaching critical mass? . . .

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While none of the reporting on the just-concluded BookExpo America so much as mentioned it, it’s one topic publishers talked about at the convention incessantly, as they do at every BEA, or almost any other gathering for that matter: Returns. But in a Wall Street Journal report, Jeffrey A. Trachtenberg observes: “Returns are the dark side of the book world, marking not only failed expectations, but the crippling inefficiencies of an antiquated business. It’s a problem that’s only getting worse.” Trachtenberg says the rise of the bookselling chains in the 1990s has exacerbated the situation—first instituted during the Depression—and the “reverse tidal flood of books hurts every aspect of the business, one already struggling with weak sales. Authors don’t get royalties on unsold books. Publishers sell returned copies at distressed prices after paying to truck them thousands of miles around the country. Books that can’t be sold at any price are pulped for a total loss.” Plus, he notes, “Worst of all, the increasing rate of returns has helped ignite a destructive cycle. So many books come back that publishers say they have raised prices to compensate for the anticipated lost revenue. That in turn makes many books harder to sell, creating more returns.” Almost the entire cost of returns is borne by the publisher, but the impact is creating so great a strain that now, reports Trachtenberg, even Steve Riggio, CEO of Barnes & Noble, says, “We’d like to see this practice discontinued. Any rational business person looking at this practice would think the industry has gone mad.” Even though retailers such as B&N bears none of the cost of returns, ending the practice, says Riggio, would “revolutionize the book business and revitalize the book business.”

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.

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