Monday, January 11, 2010

A Discussion of Sell-Through

I was talking to an author recently and we were discussing sell-through, something I realized that most first-time authors don’t know much about. We always discuss the importance of an author’s numbers, what kind of sales she’s getting, but rarely do agents explain that numbers do not necessarily mean how many books are sent to bookstores, but how well the book sells through; in other words, how many books actually sell versus how many are shipped.

Let me back up a minute. Publishing has some problems/hurdles to overcome, and despite what many of you believe, the query letter and agent response times have nothing to do with those problems. One of the biggest problems, arguably, is that publishers still allow for returns. That means a bookstore can order 5,000 copies of your book, not dedicate any time or effort to sell it, and return any or all copies that don’t sell to the publisher. How many copies are actually sold by the store is what determines your sell-through, and that sell-through is what the publisher uses to determine your success.

So a publisher will print books based on orders from stores. If stores order 20,000 copies, most publishers will print something around 22,000 to 25,000 copies of your book. They’ll ship 20,000 copies, which is your initial ship number. Within the next six months or so they’ll start to see returns. If 10,000 copies are returned, your sell-through is 50%. If 5,000 copies are returned, your sell-through is 75%, and if 15,000 copies are returned, your sell-through is 25%.

Still with me? What your sell-through percentage needs to be depends on the publisher as well as the format your book is printed in. Typically, the cheaper the book the higher sell-through percentage you’ll want to maintain. In other words, mass market paperbacks want something around a 65% sell-through at the minimum, trade paperbacks can be around 60%, and hardcovers around 50%. Reminder again, these percentages will vary from publisher to publisher and do change over the years, so the numbers I'm giving here are to be used as examples only. Do not take it as “the word.”

One of the reasons sell-through is so important is that it affects the numbers for your next book. Let’s go back to our 20,000 copy order and pretend your sell-through was 50%. That means that your next book is likely to only get orders of 10,000 copies. If things are going well you’ll likely sell all 10,000 copies, have gone back to press on the first book and eventually go back to press on the second. Each time you go back to press the orders on your next book, as well as the sell-through, should increase. However, if your second book also has a sell-through of only 50%, that means the orders on your third book are going to be around 5,000 copies. If you haven’t noticed, you’re going in the wrong direction in that case.

When looking at numbers I encourage all authors to be less concerned about that initial shipping number and much more concerned about sell-through.