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E-books promote publishers’ financial security
November 7, 2008 | 4:09 pm
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By Paul Biba
Borders has suspended payments on its bills for two months, according to The Bookseller.
US-based distributor Independent Publishers Group (IPG) has told The Bookseller that the majority of its publisher clients plan to continue supplying books to the US bookseller Borders, after IPG issued a "special alert" asking its clients to accept cover for "printing costs" only, in the event of a default by the retailer. The move was prompted by Borders US’ decision not to pay its invoices for two months. Instead, the troubled US bookseller was anticipating making "excessive returns”. As a result IPG president Mark Suchomel, which distributes books for 300 trade publishers in the US, said he had told the firm’s clients to either stop supplying Borders or accept the reduced cover. Suchomel said he was asking clients to "share the risk", indicating that another independent distributor recently took a similar position with its clients.
I would remind publishers that e-books have no inventory carrying costs or need for returns or requirements for up front payments. Be your own distributor/reseller for a minimal investment cost. No need to worry about credit terms, late payments or bankruptcies. There are a lot of benefits to e-books that might only become apparent in these hard economic times.
Related: Galley Cat item on Borders. The impact of Borders’ woes on small presses could be especially harsh.
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Comments:
As someone who markets her own work both in print and ebook, the benefits of the ebook business model have always been totally obvious to me.
Selling print books through wholesalers to retail outlets is a grind with vanishing profit margins for the smalltime content producers whereas selling ebooks is easy. I get paid and the customer gets his or her ebook. No muss, no fuss, everybody happy.
Small presses that use POD may be somewhat insulated, as well. I was wondering if Borders would go under (I had pegged it as 35% likelihood within a year). This is definitely going to change bookselling for the long term.
Although Borders’ problems are pbook related, its problems bode poorly for the publishing industry as a whole. Should Borders succumb to bankruptcy, it will leave only Barnes & Noble (speaking about in the US) as a competitor to Amazon. Should B&N stumble, publishing will be dominated by the demands — no matter how outrageous or bankrupting — of Amazon.
There is a delicate balance that needs to be maintained, at least for the near-future, between p and ebooks. Should Amazon gain such power that it can dictate pbook terms, that will readily translate to ebook terms and will reduce competition in both arenas. With Amazon trying to vertically integrate the industry, this becomes a more pressing problem.
It is because of this problem that I avoid buying books from Amazon and would not recommend a Kindle to anyone. What I would like to see is B&N offer the instore capability to purchase an ebook in a number of formats, including the Kindle format, so that Amazon’s market power is at least somewhat checked.
I agree with Rich that our industry is best served by vibrant competition at all levels–from authors, to publishers, to distributors, to retailers. If one entity gains monopoly power in any of these areas, the rest of the industry, and definitely the reader, suffer. (I don’t see only Amazon as the danger).
I’d hate to see Borders fail, just as I’ve hated to see so many dozens of independent bookstores close over the past few years.
Rob Preece
Publisher, http://www.BooksForABuck.com
As usual, the Sony Reader is forgotten.
Sony recently stopped supplying Circuit City stores with new goods (trucks *in transit* were recalled!). If Sony ever does that with Borders and the Reader, *then* you’ll know things are capital-b Bad.
Circuit City recently announced that it is closing over 150 stores, so that might explain why Sony stopped shipping to them. Sony is just protecting its product from going someplace that it will only get lost, damaged, or returned.