Tuesday, March 5, 2013

Bookstores can help authors go broke

Strangely, several independent bookstores in New England, Texas, California and Arizona use the same words to describe their "consignment" programs that allegedly help independent authors to sell books.

Here's how a bookseller in Massachusetts describes the program:

Our consignment program allows each of HugoBookstores to carry and feature a much wider variety of self-published and print on demand titles than we could through traditional purchasing. Our buyers have done a pretty good job over the last 40 years but they do occasionally miss titles that our customers would like. The consignment program is a back door to give authors whose books we don’t stock and who believe their works would sell well in our store to show us what we’re missing. When consignment books achieve a solid sales history, they become eligible for conversion to wholesaler fulfilled titles.

Upon sale, we pay 50% of retail to the consignor.

The basic administrative fee for a consignment is $50, the fee is per store. If 20 or more books are sold within the first six months, this $50 fee is rebated. 

If there is a six-month period without sales, we will return books by mail.

Twice a year we will send payment accrued from book sales to an address provided by the consignor. Payments will be sent in January and July.

We will pay only for items sold. Damaged or stolen items are the sole financial responsibility of the consignor.

For $100 we will feature your book for one email newsletter blast to all three store mailing lists, putting your book in front of thousands more potential readers.

For $250 you can have an in store standalone author event and signing — another great way to showcase your book for family, friends, and new book buyers.

They suggest an initial shipment of five books, and after sale will pay 50% of the cover price. Damaged or stolen items are the sole financial responsibility of the publisher. I'm not making an accusation, but there is no way a publisher can know if books were stolen or sold.

Some numbers to consider:

A book costs me $4 to print (at Lightning Source). It costs me $12 to ship five of them to the bookstore, for a total cost of $32 for the five books. The book has a cover price of $16. If the five books sell, the store collects $80 and I collect 50%, or $40. The $50 administrative fee lowers the gross revenue on the five books to negative $10. When I deduct the $32 cost of printing and shipping, I'm $42 in the hole.

If I invest in store promotion, I can lose up to $350 more. OUCH.

For comparison, if Amazon or Barnes & Noble sells the books, I collect 80% of $80, which is $64. If I deduct the cost of printing and shipping five books ($20), I make a profit of $44. That won't make me rich, but it's better than a $42 loss. Or a $392 loss.

If the store's promotions are effective and a major miracle occurs and the store manages to sell 300 copies, the $50 fee is waived. The store takes in $4800. I receive $2400. I pay $1200 for printing and about $100 for shipping, which leaves me with $1100 (if no books are lost or stolen). And I wait a long time for the money.

If 300 books are sold by Amazon or B&N, I make $2640 -- more than twice as much -- and the money comes in sooner, and there is no risk of theft or damage.

Unless your egomania is so severe that you must see your book on a shelf in a terrestrial bookstore, don't do a consignment deal.


  1. .. and you only get your bucks twice yearly. I loved this bit:

    "When consignment books achieve a solid sales history, they become eligible for conversion to wholesaler fulfilled titles."

    Bully for the author. But bookstores don't decide what books get taken on by wholesalers and distributors!

  2. Traditional brick and mortar bookstores, even those who claim to support the Indie author, are no friends to Indie authors. They are part of a dying niche business like the betamax videos in the age of DVD's and fax machines in the age of email. They will soon be gone, with a few dinosaurs still lurking about trying to force archaic rules on the indie authors.

  3. I suspect it is ego that gets in the way of common sense when authors agree to these types of arrangements. I've never been a fan of consignment programs for authors--and your numbers certainly prove it is a bad idea!

  4. We get 60/40 with no administrative fee and only place in local bookstores, or let them buy the books at 60% of retail. Local author presence in local bookstores is essential to our marketing platform, but we have no ambitions of consigning in places where we can't show our faces.