3 Tips to Help You Deal with Returns

FACT: The average return rate in the book industry is almost 30 percent—and it’s close to 40 percent for mass merchandisers like Wal-Mart and Costco.

Behold the Publisher’s Paradox: One of the best ways to increase book sales is to roll out big supplies supported by big publicity. One of the best ways to reduce book returns is to aim for steady, consistent sales and to be conservative with supply. Can these two truths find a way to coexist, to live together in peace, harmony, and net profits? The honest answer is . . . well, let’s just say it’s tough. To better understand the relationship between targeted promotions and returns, let’s take a brief look at the buying process.

National retail and wholesale book buyers use computer programs to evaluate recent demand and automatically generate new orders based on a simple mathematical algorithm. Spikes in sales that coincide with targeted publicity campaigns cause these computer programs to inflate orders in the weeks that follow a campaign’s conclusion—even though demand may have returned to normal levels. The result is overstocked shelves and, later, returns.

What to do: (1) Sequence your promotional campaigns to sustain the steadiest demand possible in a given region. (2) Understand that this return phenomenon is largely a function of a “dumb” computerized buying process, and adjust your forecasts, budgets, and mental expectations accordingly. Returns are an unhappy fact of life in the book industry, but they don’t have to catch you by surprise. (3) Always inform your distributor of publicity plans and media hits so they can manage the supply of books as efficiently as possible.