Book Trade 101

NATIONAL CHAINS AND WHOLESALERS

The large chains—Barnes & Noble, Borders, Books-a-Million, and Indigo (Canada)—and the large wholesalers—Baker & Taylor, Ingram, and Bookazine—are intensively serviced by BookMasters’ in-house staff or by a combination of independent representatives and in-house staff. These salespeople are all well prepared, calling on all of these accounts on a monthly, if not daily, basis. As our relationship with each customer is very strong, we will work with them to build appropriate promotions and merchandising programs to support our publishers’ ongoing needs. Managing inventory is a necessity in this channel. As such, we will not only sell, but also sell at the appropriate level to maximize opportunity, while at the same time limiting returns.

Selling to the national accounts takes place 4 to 6 months prior to publication or in-store date. If these schedules are not followed and books are not presented accordingly, there is a chance the buyer may not purchase the book.

Buyers work from an open-to-buy schedule. Every buyer has a history of what his or her average sales are by category for each month. The buyer tends to look at their key accounts first. Then they will go down through their stack, from their most important accounts to their discretionary purchases, until they have used up that month's budget. Once the budget is gone, they would have to go to their boss and make a case for why they would need to stock another title. This is especially true if they are done buying for that month.

Appointments generally last no more than 30 minutes. As such, it is better if publishers can provide succinct information to BookMasters. Average buys at the national accounts can range from as few as 50 copies to as many as 5,000 copies depending on the title. Some titles are passed on altogether at the store level, but all titles are listed on the respective Web sites and are available for sale. If a title is selected for a promotion, the customer charges a “co-op” fee that will be passed on to the publisher, assuming the publisher approves in advance.

When selling these accounts, the representative uses a sell sheet and advance information. Each category has different buyers. These buyers are experts in their category and are well aware of both the market and other titles in that particular category. Meetings with these buyers can sometimes be only 15 minutes long to present five or more titles. This is very little time when compared with the time spent researching, writing, marketing, and even manufacturing the title. When the meeting time is up, the buyer must move on. This is why it is so important for publishers to provide sales representatives with concise information that they can use to present the title. As a publisher, you should keep the time limitations the representatives have in mind. Try to condense your information down as much as possible. When setting up your title information, indicate what you will be doing to build consumer demand for the retailer. Focus on key points that will drive sales at retail.

The buyers are used to buying prior to publication, so a cover image, table of contents, color photos, competitive titles, and author information (credentials, other books written) can be enough for them to make a decision. Missing any one of these key elements will hinder the buy. The representative usually gets one shot, so if the information is not available, it is best to wait until you have it. Another thing to keep in mind is that buyers are buying based on monthly budgets or open-to-buy periods. If we try to push a buy after the open-to-buy period has ended (i.e., trying to sell a book with a publication date of May when the buyer is now buying for July), it can cause the buyer not to have any money left for that buy, resulting in no buy at all.

When a title is presented to the buyer, a discussion around the title will sometimes take place. The buyer may mention what he likes or doesn't like about a particular title, and they may pass. If the buyer says he doesn't like something specific—the price or cover for example—the sales professional can communicate with the publisher and help them to make a change more to the buyer’s liking so a buy can still happen. When the sales professional gets feedback, he will pass it on to the buyer.

With a buy, a buyer will often buy a test amount of the title and give it 4 to 8 weeks on the shelf. If the book does not perform to their specifications in that period, it will be pulled and returned. It is very important for the publisher to time his marketing around that period to help maximize sell-through so the title performs well enough to stay in the stores. With a successful test, the buyer could expand the number of copies and number of stores the title is in. At that point, he may model the title, meaning setting a minimum amount of inventory to be maintained in the stores. This helps keep the sales going so the stores are never out of stock. This model can and will be revised. Also, please note that there is no such thing as a chain-wide buy for a major retailer. It is stratified, and region does matter.

Another thing that may come up in a meeting is the issue of co-op. Depending on the type of promotion, there will be a charge for placement. This is something that is earned and cannot be bought. Our representatives can suggest that a title might be good for co-op, but the buyer has the decision to offer it or not. Your sales professional will stay on top of sales and work with the buyer on promotions on your behalf, but the publisher makes the final decision.

With competition being fierce and shelf space limited, most books will not continue to sell forever. At some point, the publisher needs to consider publishing a revised edition or updating his bestselling title so as not to lose momentum.

MATERIALS NEEDED IN ORDER TO PRESENT TITLES TO NATIONAL ACCOUNTS

Missing any of these materials may hinder the buy:

The national chains like to keep 8 to 12 weeks' worth of stock on hand. They use the first 12 weeks past a title's publication date as a model. This is why it is so important to focus publicity in those first 12 weeks.

The chains will also constantly evaluate and balance their stock levels. So they may make a return from one store while placing an order for another.

AMAZON

BookMasters sells directly to Amazon and will ensure, through state-of-the-art systems, that all data and title information is up-to-date at all times. Amazon likes to keep 1 week's worth of inventory on hand. They do not buy speculative amounts.

Through a 3% co-op advertising program, Amazon will also insure our publishers’ titles are recommended to targeted consumers. This is called the Amazon Personalization and Customization Program. Amazon tracks user preferences and past-purchase history to make recommendations. For example, if a customer frequently looks up art books, there will be recommendations for him for other art books that he might be interested in when they next visit the Amazon home page.

There are other opportunities available as well.

WAREHOUSE CLUBS

Costco (United States and Canada), Sam’s Clubs, and BJ’s Wholesale have the ability to buy big quantities, but do so with very limited SKUs. SKUs (Stock Keeping Units) are made up of a combination of books, usually in a similar vein. The success of the SKU depends upon the success of the whole lot. Each store must hit an average weekly per SKU amount, and if they don't meet the goal, the product is cut.

The buyers have very little discretionary choice over the SKUs, probably less than 20%. The SKUs are mostly dominated by bestsellers.

Of the three, only Costco buys direct. Both Sam’s and BJ’s now purchase via wholesalers. BookMasters Distribution Service (BDS) has very good relationships with both the warehouse club buyers, as well as the buying teams at the wholesaler level. We will no doubt ensure that our publishers’ product is presented on an ongoing basis.

MASS MERCHANDISERS/SUPERMARKETS

The Mass Merchandisers and Supermarkets are serviced by various wholesalers, and BookMasters has relationships with all of them. The major customers in this channel are Levy Home Entertainment, News Group, and Hudson News. The customers they represent are Wal-Mart, Target, Kmart, Kroger Supermarkets, Toys R Us, and Best Buy, among many others. In addition, there are many more regionalized companies that service the smaller regionalized chains. Both BookMasters and our sales representatives call on these customers multiple times throughout the year to ensure they are aware of the appropriate product for their respective planograms:

*For placement allowances, think of renting real estate. The rack allowance charge is the equivalent of co-op for getting into stores, i.e., paying for the book’s shelf space.

SPECIAL SALES

Special Sales is defined as any customer who is not a “book-focused” entity. It is made up primarily of the following channels:

At BookMasters, we service all four channels through our in-house sales force and select independent sales representatives who have a specialty in a respective area (gift, photo trade, etc.).

Some of these outlets require 9 months lead-time before publication date. They tend to buy very few titles, but they buy in large quantities of the titles they choose.

The Special Sales opportunities are limitless, and at BDS, we are always aggressively seeking to further expand our reach into these markets.

INDEPENDENT BOOKSTORES

BookMasters’ U.S. and Canadian field sales representatives cover independent book retailers and regional wholesalers.

Our BookMasters’ sales representatives have been carefully selected and understand the needs of a distributor. They are among the most focused salespeople throughout the country. In most cases, each group only represents a handful of lines, which allows them to concentrate on our publishers’ needs, essentially acting as house representatives. Since most have been in the business a very long time, our representatives have strong relationships with the booksellers on whom they call. The recommendations they make to their buyers as to appropriate titles and quantities are always given careful consideration. The BookMasters Sales Department is in frequent contact with our representatives, and we pass on all appropriate sales and publicity information to ensure they are up to speed and can sell effectively.

We believe our representatives are the best in the business. In fact, three of our sales representatives have won “Representative of the Year” in their respective territories in the last 5 years.

By employing independent representatives, we can field more than five times the number of sales representatives and see many more accounts than distributors or publishers with only an in-house sales force. Unlike many publishers, our sales representatives visit each store at least twice a year, and even as often as twice a month if necessary for certain key customers. We do not put a limit to the number of times a representative should call on an account. We base the number of calls on a particular account’s needs.

Since all of our representatives also have longstanding relationships with our in-house team, they work very hard for us and thus we get excellent results. At most distributors and publishers, the decision to employ house representatives is made in order to reduce overhead, not to sell more books. At BookMasters, we believe in getting the product to market first and foremost. Our sales representatives allow us to do that.

IMPORTANT QUESTIONS BUYERS ASK WHEN MAKING PURCHASING DECISIONS

Selling to the independent bookstores is very important. They are more willing to stock local authors and support their local community. Start talking with the bookstores in your area. Though these stores are smaller and the buys are smaller than the national accounts, the bookstore buyers—who many times are the owners—can be very strong advocates for your title. They will hand sell your title to their customers and help build demand for it. They are heavily involved in the community and can really help you gain notoriety on a local level.

Although the stores are smaller and the shelf space is less than the bigger national accounts, the buying principals are similar to the nationals. These buyers buy from the catalog we provide to the sales representatives which features all of the new titles for the season. The sales representative meets with the buyer and goes through the catalog, discussing titles as appropriate.

During the presentation, the buyer may ask herself these questions:

The independent stores have more of an open-to-buy issue because they are often working on their own cash flow, which means that they take fewer risks. This is another reason to set your publication date out in accordance with selling seasons and to stick to that publication date.

Buyers don't care as much about content as they do about how well the book will sell through for them. Reviews on the book and having a consumer-marketing plan can be very effective.

These are the factors she will consider when making her decision. Our professional sales representatives will work with the buyer to help answer these questions and others along with letting the buyer know that they will be there to help if there are any questions or concerns.