With all the other challenges facing independent booksellers, a new source of concern is a squeeze from many publishers' collection departments—they want their money for outstanding invoices in 30 days on the dot. Many date the change to the beginning of 2007, just after Advanced Marketing Services declared bankruptcy, leaving publishers with millions of dollars in losses. At the same time, independents, some riddled with debt, continue to go out of business. The two circumstances have combined to make publishers determined to get paid for accounts receivable on time. The tension between the two sides led one bookseller, off the record, to label it “an undeclared war against the independents. Publishers are saying they're not sure they can make money on all these independents, so they're ratcheting up collections.”
And with $4 gasoline, a diminished dollar and glimmerings of inflation, it's no secret that times are tough. Generally, in tighter economic times, it gets harder for booksellers to succeed, said Hut Landon, executive director of the Northern California Independent Booksellers Association. Publishers look to smaller stores to make up the losses when big-name booksellers like Dutton's or Cody's close. On top of that, given Borders's much-ballyhooed financial troubles, Landon worries that credit will get even tighter.
If relations between booksellers and publishers' credit departments weren't already strained, last month three houses—Hachette, Penguin and Random House—claiming to be owed close to $387,000, filed to put Olsson's Books and Records into Chapter 7 liquidation. The case has since been converted to Chapter 11, and Olsson's is reorganizing to preserve as many of its remaining five stores as possible.
Changes in collections, coupled with an emphasis from publishers on frontlist and pub date, have led some booksellers to change their buying strategies. They need to sell more up front in order to pay off invoices fast. “Publishers are their own worst enemies,” said one bookseller, who asked not to be named. “Media, media, media—the Today Show, the Tomorrow Show, the Yesterday Show. There's so much frontlist now. We are tightening our criteria for backlist. I'd rather have 40 copies of The Story of Edgar Sawtelle than 10 copies of it and 30 copies of [backlist] books.”
Some booksellers question whether it's even possible to pay publisher invoices in 30 days, even if they make their stores frontlist driven. “Nobody can pay everything on time,” says David Didriksen, president of Willow Books and Cafe in Acton, Mass. “If you paid everything in 30 days, you'd have to turn your inventory 12 times a year, which isn't realistic. Many times you get the book two weeks before street date and you have to pay for it two weeks later. You can't order like you used to, and you can't stock like you used to.” And in the back of many independents' minds is this thought posed by Jonathan Platt, co-owner of Nonesuch Books and Cards in South Portland and Saco, Maine: “For a long time I've wondered whether publishers are giving better terms to the chains.”
Longtime booksellers are careful to distinguish between the sales and marketing side of the publishing business and credit. “The dichotomy between the marketing department and the collections department is important to focus on. They really are working at diametrical odds,” said Bill Petrocelli, co-owner of Book Passage Bookstore in Corte Madera, Calif. He maintains that publishers really do value the independents for developing new books and new authors, at least on the marketing and sales side. His more pessimistic colleagues worry that soon the distinction won't matter, because field sales forces, which tend to champion independents, will be eliminated as part of publishers' cost-cutting measures.
Chuck Robinson, co-owner of Village Books in Bellingham, Wash., is one of the booksellers who's observed that collections have gradually tightened up since the AMS bankruptcy. Over the years, he noted that his store has been proactive in keeping publishers informed if a check will be late. Unlike chains, independents tend not to return books for credit to pay off bills. And, in fact, returns from many independents have remained stable, and relatively low, even during tough times.
Mike Barnard, owner of Rakestraw Books in Danville, Calif., said, “We're trying to keep on top of returns. But we're also trying to buy less and buy more tightly, more ones and twos than threes and fives.” Part of the reason is economic—the cost of shipping. He cites an example of returning $600 worth of books for credit and losing $60, or 10%, on shipping. Although he understands that things are strained up and down the food chain—with the cost of paper and shipping going up—he feels the most pressure from the consolidation in distribution. With big houses distributing other big houses, in terms of billing, the two become one. Last summer, for example, if booksellers were on credit hold with Harper, which distributes Scholastic, they could not get the new Harry Potter.
Another difficulty, especially for smaller stores, can be meeting minimum orders from distributors. But at Trafalgar Square Publishing, now under the Independent Publishers Group umbrella, IPG president Mark Suchomel said, “We don't have a minimum to place an order with us. Ten copies gets 47%.”
Although both Random House and Penguin declined to comment for this story, Josh Marwell, president of sales at HarperCollins, emphasized that independents do matter. “The independents remain a vibrant and key channel to our publishing program,” he said. “We make every effort to work together with our accounts in the collection process and, as a result, enjoy very good relationships with our customers. That said, it is a challenging environment right now.”
Just how challenging it could become is anyone's guess. But with many stores' sales flat or a little below last year, there's likely to be more tightening in the months ahead.
