Barnes & Noble and the Writer: Friend or Foe?

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Here’s a hint: they are not a writer’s friend. Walk into any Barnes & Noble and this might seem counter-intuitive given their very existence rests upon the backs of tens of thousands of writers – past, present, and future – whose works line the shelves of every store. As a company, Barnes and Noble does all in its power to cultivate a strong consumer/membership base. You can’t check out of the store without being quizzed about membership status. The recent trend is for staff to hawk a Barnes and Noble MasterCard as a means to build customer loyalty (the carrying cost of credit notwithstanding as compared to the free $25 gift card and 5% cash back). Their overall approach is to offer discounts (from 10% to 40%) off the retail price of books through risk-free acquisition of titles and demanding deep wholesale discounts from publishers in order to give it away to their customers.

It is especially painful for small indie presses and self-published authors. If the small press department is willing to stock the title, their terms generally require a 55% discount from the retail price, so if a trade paperback book (not the smaller dime store mass-market size) was to retail for $10.99, the publisher would get $4.95 to cover their profits, the cost of production and printing costs, the marketing and publicity costs, and a small amount as a royalty to the author after their agent withholds a fee of 15%. Barnes and Noble keeps $6.04, so they’re happy to start discounting to their customers – no sweat off their back. But it doesn’t end there. If after a few weeks, and rarely longer than three months, the title doesn’t sell, Barnes and Noble simply returns the unsold books to the publisher for a full refund – again, no sweat off their backs – the loss is absorbed by the publisher. This, in turn, makes it more difficult for a publishing house to stoke the fires of creativity as cash flow is diverted back to warehousing “unsuccessful” titles and is now unavailable for even modest advances to help struggling writers get their product to market. This is one of the reasons why POD (print on demand) books are becoming more and more common; it alleviates the need to devote large blocks of capital to pay for lower cost print runs for books that might only sell a few hundred copies at worst and a couple of thousand at best. As a policy, Barnes and Noble will not stock POD books. The best an indie press or self-published writer can hope for is to have the title made available for ordering through BN.com or via their in-store Bookmaster program should a customer happen to ask for it.

The problem is compounded in one additional way. If a customer orders a title that is by POD, the Barnes and Noble system passes the order to Ingram books (one of the two major book distribution companies) who in turn orders the book from Ingramspark, the company which actually does the printing. Ingramspark’s charge for printing a book is at least 21% higher than Amazon’s company, Createspace, to produce the exact same product (based on the identical print ready files) which further diminishes the compensation that might eventually trickle down to the author. In a recent analysis of a title from a small indie press, a young adult novel was priced at $10.99 – the upper limit for the majority of similar trade paperback offerings at Barnes and Noble. The 55% discount of $6.04 plus the printing cost from Ingramspark of $6.30 meant the net to the publisher was a negative $1.35 – a loss for each copy sold to Barnes and Noble. The publisher, who could not afford the alternative investment of $6,000 to produce 2,000 copies at a much lower per book cost that would most likely be returned anyway, was forced to offer the book at a discount rate of only 40%. The mathematics turned the sale profitable, but only to the extent that the publisher and the author would share a mere twenty-nine cents per book while Barnes and Noble gets to play with $4.40. The publisher/author is further penalized under this scenario by forcing a customer at the store to prepay the purchase should they wish to order a copy – not so with most all other titles on their system. It’s a stigma that leaves a poor taste in the customer’s mouth and nine times out of ten, the customer simply declines.

There is no lack of popularity for brick and mortar bookstores, eBook sales have leveled, and the attractiveness for holding a book in hand is as strong among customers as it ever was. It seems strange that Barnes and Noble fails to take the opportunity for championing the writers who feed its income-stream instead of penalizing them through extra profit-taking and posturing for their customers. As of this past Tuesday, the nascent CEO, Ron Boire, was released by the company’s board of directors as not being a “good fit.” Leonard Riggio, the businessman who purchased the company back in 1971 has taken back the reins for the time being. It can only be hoped that Mr. Riggio comes to recognize the value of the creative people whose efforts have lined his pockets for over four decades before the company is eclipsed by Amazon who offers much greater breathing room for writers.

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