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.

Jessica

23 comments:

Anonymous said...

I've read posts here about what an author can do to market themselves, but what can they do to increase their sell through? I'm assuming that having a good website and going to local bookstores and getting to know the person in charge of ordering helps...maybe stopping by a few times and offering signed copies etc...but you can't vistit sellers all over the States or the world. How will reaching out to the few stores in your area (which aren't many if you live rurally) help in the grand scheme of sales? If a book sells through one major chain location, do they communicate and push it through other locations?

In other words, is there more an author can do, other than what they normally do to self-market, to specifically up sell-through?

Fawn Neun said...

As someone who has worked in business and specifically in resource management, for many, many years, this system makes my teeth ache. Just sayin'...

MeganRebekah said...

Do you see the publishing ever changing/improving this system?

Bonnie said...

Does this still apply if the author's first published book was non-fiction and a publisher is considering a fiction project? It seems to me that non-fiction and fiction are so different that sales of non-fiction wouldn't be relevant to fiction.
Thanks.

Will Entrekin said...

"One of the biggest problems, arguably, is that publishers still allow for returns."

I'd say that's an easy argument to make. I'd also say that makes one of publishers' biggest problems their own business model, and self-created. If we writers are going to consider the business aspect of writing, I'd argue it makes little sense to align with a corporation whose model is so out-dated.

Anonymous said...

Very succinctly said. Thankyou.

ryan field said...

I'm curious about how increasing digital sales will affect this.

Donna Gambale said...

Thanks for this info! Many aspiring/debut writers don't know about this concept, and it's definitely where their focus should lie. I'd heard of sell-through, but it's great having those percentages!

Vivi Anna said...

I think the system needs to change, but if publishers stop the return end of it, what will happen is, the bookstores will order less copies of each book.

So a debut author that a bookstore may have ordered 5 copies of their first book, maybe will only order 2.

In my opinion the only books the stores will order will be the ones they can sell...for example the bestselling authors, and give little to no support to a new author or a midlist.

It is a flawed system but we need to figure a way to fix it so that debut and midlists are getting the shaft.

Vivi Anna said...

Whoops I meant to say, AREN'T getting the shaft. LOL

Lisa Desrochers said...

Jessica--
You mention that the initial print run is tied to orders. Is there any correlation to the author advance, or does that more tie into marketing the book so orders will be bigger?

Watery Tart said...

I would agree with you and others that the publishers agreeing to take back books is at the core of the problem. It is the largest 'waste' in the whole system, and seems the logical place to save money and return us all to profitability.

What about the model of sending out a SMALLER number to book stores, but enabling them to do PoD for books they run low on, so if a book sells more than that first order, they can fill the void easily? This just seems like a no-brainer to me... books for display, but a back-up plan if that runs low.

Dara said...

I never even knew of sell through. Thanks for the informative post. I always learn something when I read your blog.

Anonymous said...

Thanks for your explanation. Very easy to understand and helpful to an aspiring writer.

Kate Douglas said...

None of this made sense to me until I got my first royalty statement and saw the "reserves against returns," the money your publisher holds back to cover the returned books that you'd otherwise be paid for if they actually sold. It's amazing how explanations are easier to understand when they're illustrated with your income--or lack thereof!

Mira said...

This is helpful. I'd heard the term, but didn't quite know what it meant. Jessica, I've noticed that you vary your post for people at different stages of the process - I think that's cool - thanks.

I also think that Ryan Field has a very interesting question.

Gordon Jerome said...

Good primer on sell-through. Of course, in three years, none of that will make a hill of beans of difference, as it will all be e-books, at least as far as fiction goes.

As for XYSTUM Publishing, I suppose we'll analyze it as units sold over time. A graph of that would indicate success and marketing efforts would be rationed accordingly.

Gordon Jerome said...

Oh, and as for the fairness of returns. Without that model (granted it's an old model that came into place when there were no chain bookstores but it still applies), all the risk would be put onto bookstores, and they would all go out of business, and the publishers would follow right behind.

Returns are a part of the nature of selling paper books, because every new book is utterly new to the market. Jello would have to do the same thing if every year it put out all new flavors of Jello.

But e-books are going to end all that.

Poison Ivy said...

As stupid and tree-wasteful as the returns system is, it saved the publishing business during another financial crisis--the depression. That's when returns started. Offering the option of returning was the only way publishers could convince booksellers to take a risk on ordering books when they weren't sure any customers would be buying during a period when unemployment was 25%. And it worked.

As for shipping too many copies, I think it's Malcolm Gladwell who explains that people want to do what they see many others doing. So the overkill of displaying so many copies of a popular author's book in a store can produce more sales simply from this copycat impulse. Why else did so many of us read The Da Vinci Code or Harry Potter or Twilight? We wanted to have an opinion on something that so many people were talking about.

Even though it can be disastrous for the author to have a low sell-through, any retailer will tell you that if you sell every copy, you've missed some sales you could have made. Bookstores routinely over order just in case.

This is will all change once POD and ebooks are firmly the drivers of the book market, but we're not there yet.

ali said...

This was educating ~ thank you!

Sean Patrick Reardon said...

This was very informativE

Jaycee Adams said...

Ironically, I haven't read any of those three books Poison Ivy mentioned.

Do Best Buy and Walmart and the rest get to do this, this selling back to the manufacturer at purchase cost anything that they can't sell themselves?

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