The distribution agreement between Macmillan and the Ingram Content Group plays to the strengths of both parties, Macmillan senior v-p and COO Peter Garabedian told PW in an interview about how the relationship announced Tuesday morning will work. While Macmillan will remain focused on shipping large quantities of frontlist books, “Ingram is better at short run distribution than I am,” Garabedian said. “This plays to their sweet spot.” The agreement is a way to make sure that physical warehousing constraints “don’t get in the way of publishing decisions,” he said. By moving slow selling titles to Ingram “we add additional capacity for long tail titles and keep them in print as long as possible without taking up warehouse space,” Garabedian said.
While the print-on-demand part of the agreement kicks in immediately, the “3PL” (third party logistics), part will be phased in over the next three to six months, Garabedian said. “We will have to learn how to manage the supply chain in different ways,” he explained. Macmillan will be testing various algorithms to determine at what rate of sale books will be moved to Ingram. While Garabedian wouldn’t disclose how many titles may end up in the Ingram warehouse he said “it’s not immaterial.” Likewise Garabedian wouldn’t say how much money this may save Macmillan, but noted he doesn’t expect to have to build any more warehouses; a proposal to build a new warehouse several years ago was priced at $13 million.
Since Macmillan has never outsourced fulfillment before, Garabedian expects a few glitches along the way, but is sure they can be ironed out. “I’m confident we can smooth out whatever bumps come up,” he said.
