Act 3, Scene 1
As a small publisher, we are humbled by the age-old decision facing publishers “how many books should we print of any particular title?” The obvious answer is “enough to meet sales demand”. If only determining sales demand were that easy.
With book sales in a constant state of flux due to changes in formats preferred by consumers (hardcover, trade paperback, eBook), fierce competition between booksellers (Amazon vs. Barnes & Noble vs. Independent Booksellers), and competing leisure activities vying for the same consumer attention span, the challenge of predicting what book quantities will be required has never been more difficult. Book buyers, both wholesale and retail, are unsure about how many to order. Conservative buying strategies such as, “buy what sold last time”, are often used as defensive, cash conserving tactics. But the First Law of Retailing is immutable – “you can’t sell what you don’t have in inventory”, so the Catch-22 still looms large today— lower inventory levels translate into lower sales revenue and lower sales revenue forces ever smaller inventory levels on subsequent buys.
It Was the Best of Times…
There was a time when publishers would use the printing press as a marketing weapon – blanketing the retail landscape with hundreds of thousands, even millions of copies of a single title. Stacks of books in large chains, warehouse clubs and independent booksellers would call out to readers entering the establishment “Buy Me, Buy Me”. Book returns equaling 50% of shipments were commonplace. Back then, transportation costs were lower. Paper costs were lower. There were more alternative channels to place “remainders” – newly printed but unsold books.
… and the Worst of Times
Fast forward to the present. Amazon has become the dominant player in book retailing – achieved through their massive online retail presence and, until recently, sans retail bookstores. Book stores (both independents and chains) have closed. Shelf space previously devoted to displaying books at mass merchandisers (WalMart, Target, Costco, supermarkets) has now been allocated to other products. There are fewer places to erect towers of newly printed books and fewer readers walking past those scarce displays. More and more consumers now discover books (and other retail products) via the Internet, facilitated by search engines. Physical displays in stores are less important than before. Coupled with a more challenging retail environment, the supply chain itself has gotten tougher as well. Distributors financially penalize retail accounts for returns, and many limit the amount of returns as well. So print runs have declined significantly, as sell-throughs (publishing-speak for the percentage of books that are actually sold) are now in the 90+% range. With so little spare inventory in the supply chain, publishers are faced with the choice of printing and inventorying extra books to prevent a potential stock-out situation, or printing close to initial orders and losing sales if a title happens to do well and exceeds the initial orders placed by buyers. Neither scenario is good for the book business.
Further complicating the risk/reward calculation on setting the size of an initial print run is the economics of printing, where the first copy printed is enormously expensive and each successive copy gets cheaper and cheaper, until it asymptotically (math speak for closely and gradually) approaches the cost of paper and ink. Little has changed since the 15th century when Johannes Gutenberg developed a system of movable type and combined that with screw presses to form the commercial basis of placing ink on paper that we now know as the printing industry. Even though much has changed in 500 years since Gutenberg’s innovation, much remains the same. It still takes a lot of time, effort and money to set up a printing press in preparation for that first copy to be printed. No longer are metal slugs hand-selected, inserted in wood frames, arrayed in reverse order for printing. Today all those steps are digitized and handled by software. But the skills of the typesetter and the press operator are still required, albeit in a different form than centuries ago— software rather than hardware. But despite automation, digital presses and technology advances, the initial set-up of a printing press is still a major cost driver and dominates the economics of print runs.
Why, Sometimes I’ve Believed As Many As 6 Impossible Things Before Breakfast…
- Why can’t the first book in a print run cost the same as the last book in the print run?
- Why can’t books be printed and bound in one day rather than one month?
- Why do I have to err on the side of a larger print run to avoid the secondary set-up costs of a smaller, second printing?
- Why can’t a successful book title be printed and restocked at distributors and retailers within one week rather than one month?
- Why can’t specialty titles be forever “in print” because I can have a print run of “one” each time a customer orders it?
- Why wait for the future when these things are available today?
Some are Born Great, Others Achieve Greatness:
Lean, Mean Book Printing Machine…
As someone schooled in the science of advance manufacturing techniques (Six Sigma, Lean Manufacturing), the publishing industry was one of the last places I expected to see these principles being applied. Publishing is very traditional, and those tenets have guided the industry for centuries. But with book industry revenues (and profitability) declining, self-publishing growing as Big 5 publishing volume is shrinking, the industry will be forced to change its printing and inventory practices to better satisfy book demand.
When world class management practices (Lean Manufacturing) are aligned with state-of-the-art printing technology (HP, Indigo) and combined with a whole lot of book binding savvy gleaned from working with libraries and restoring rare books, the result is a unique company with a special value proposition: Bridgeport National Bindery, or as I refer to them, our Lean, Mean Book Printing Machine.
When I visited their production facility in Agawam. Massachusetts, Kent Larson, Vice President Print on Demand Division, proudly took me through the facility, pointing out all the tools of Lean Manufacturing that they were in the process of implementing. The language was familiar to me, the metrics were as well. Bridgeport National Bindery’s mantra about the “Book of One” was something that I had heard in the context of other products, in other industries, but never in the book printing/binding industry. Although the devil is in the details, I will leave out the lesson in Lean Manufacturing and get right to the bottom line.
All’s Well That Ends Well…
So, what does this mean to Bonnie Meadow Publishing? Today, it means that the print run threshold for publishing projects has gotten smaller. While we would be thrilled to publish Harry Potter and the Cursed Child, the latest book in the epic Harry Potter series, sometimes you need to start very small with a great manuscript and a killer marketing plan to bootstrap an author and your company to the next level. Tomorrow, it means that we can trim our print runs closer to the initial buys of our customers and, in an emergency situation, be able to resupply our distributors and major accounts within one week or less, so as not to lose sales due to a stock-out condition. And in the future, as the cost of printing a “Book of One” continues to decline, the print run itself will be redefined, allowing publishers, distributors and retailers to focus on growing and satisfying consumer demand for books. Inventory dollars will be replaced by printing and binding processes that deliver speed, quality and efficiency in printing and delivering books that consumers want.
So in closing, please consider this:
“Whether ‘tis nobler in the mind to challenge convention and tradition or suffer the waste and cost of outrageous print runs.”