Your Snarkiness,

While lounging at the bookstore today, browsing through the tables of "Was $25, now $3.99" books, I wondered... who takes the loss on these huge discounts? The publisher has sent the books to the bookstore, but I know the bookstore can get its money back if it returns the books to the publisher. But if the bookstore instead sells them at what I presume is a loss, is it the bookstore that takes the hit? Or does the publisher somehow not get its full price?

Basically, I'm just hoping it's not the author, but I have a bad feeling...

My two cats send a wary greeting to Killer Yapp and wish him a pleasant afternoon, as far away from them as possible.

Killer Yapp is safely passed out cold on the sofa after a busy day at Grandmother Snark's gnawing on roast beast and fetching a red rubber ball that seemed to always be bouncing around (silly humans, losing things, you don't notice poodles losing their toys).

I think I know the answer to this but I'm going to foist it off on Ben at BleakHouse for his podcast.

Ben...would you school us all on remainders?


Don said...

Short version, a publisher can only deduct the cost of printing a book once it's been sold. Something that's not moving gets remaindered: They sell it to a remainder house at a steep discount which then gets it out to stores (there are some stores, in fact, which sell only remainders). A publishing contract typically specifies that the author gets a percentage of what the publisher gets for each book sold, so they get a much reduced royalty on remaindered books, although it's somewhat moot since a book that gets remaindered is probably not earning out its advance either.

Lynne said...

I don't know exactly how the pain is shared on remainders, but speaking as an author, I can tell you that I get nothing at all.

Anonymous said...

Some contracts give you small royalties for remainders, but it might as well be nothing--if a book's remaindered, it's going out of print. I have one book that's been out for 9 years and sold about 50,000 copies in that time...the publisher for that book is now remaindering it.

So it can be remaindered even if it sells more than a handful.

On the other hand, my latest book sold 50,000 copies in three months. Big difference there in incentive to keep something on the shelf.

Simon Haynes said...

Stores get remaindered books at a special low price, and part of the deal is that they're non-returnable.

One of the problems with a big table full of cheap books in the front of the store is that it can prevent customers going inside where the full priced books are. I guess that's why stores have a sale now and then, rather than a permanent display of remainders. (It's also why the remainder-only stores came into being.)

Andrew said...

If things still work as they did when I worked at a bookstore, remaindered books don't come from the bookstore's stock--that is, they don't take a $25 book and mark it down. The store sends the $25 book back to the publisher. Then the publisher puts a mark on the edge of the book, packs it into a box with other random remaindered books (including those which never left the warehouse) which it will then send to any bookstore that has a $3.99 table.

Marion Gropen said...

Most publishing contracts specify that authors get no royalty on books sold at less than cost. Most remainders are sold for less than the printing cost, so they would be royalty-free.

The process of remaindering runs like so:
--Sales slow
--Inventory noticed to be high
--Remainder dealers contacted, and if you're lucky, bids come in.
--Publisher writes off printing cost, development cost, etc. and takes 2 aspirin for the pain.
--Deal made, books sold to dealer.
--Dealer re-sells to stores.

As for remainders cannibalizing other book sales, I would be dubious about that. Consider: the Riggios (B&N) are very smart guys, and they have lots of remainders up front. They wouldn't do this if they were losing money thereby. And their margins on the other books are much higher, in general. I suspect the remainders are the loss-leaders of publishing, and actually encourage further impulse buying.

CherylStJ said...

I tagged you for a Thinking Blogger Award. I enjoy your blog.

Sha'el, Princess of Pixies said...

I don't sell new books. From an antiquarian bookseller's point of view a "remainder marked" book is less desirable. I wish they would stop the practice.

What is "remainder marked?" They take a black marker and draw a dash on the bottom edge of the text-block. Why not just put a "sale sticker" on the dust jacket? That comes off with lighter fluid, leaving no damage to the DJ. (No, silly, not a deejay, the dust jacket.)

We also hate price clipping. That nasty practice can make it hard to distinguish an original jacket from one borrowed from a book club edition. Clip the corner and they're often not distinguishable.

Do pixies buy remainders? Sure. Cheap is good, that is for my own personal use.

Anil P said...

It cannot but be the Author. The last in the food chain.

Eric Riback said...

Actually, the margins on remainders are, for bookstores, pretty good. Even though the dollar amount per book is low, what retailers look at is profit per dollar of product and then sales per square foot. Remainders move faster, thus the extra "turns" make them more profitable in some cases than selling new books.

As others have said, it's the publishers' only way to recoup a portion of the printing cost for books they will never sell. And as some comments indicate, authors get little or nothing on them, but remainder always represent a loss for the publisher, so that's not unfair.

Now, mixed in with the remainders are "promotional books." These are often books that were authored on a "for hire" basis and went out of print, or were never published in this country. The original publisher can get some value from the book if another publisher prints it and pays them something. They are typically printed in Asia and so the economics allow them to look like a good value and still everyone makes something.

The other interesting phenom, as alluded to, is hurt books. Some of them aren't really hurt. A lot of publishers have figured out that it costs more to sift through returns than it is worth for the copies they find that are unharmed, so every returned boook goes into the hurt pile to be sold at remainder prices.

But aside from the promotional books, the remainder table represents failure for the publisher and profits for the retailer.

Book Fan said...

One place that sells remaindered books and hurts is the Green Valley Book Fair

A lot of hurts I have seen at Green Valley look just fine just as Eric Riback said.


Anonymous said...

Some heartening notes for authors living in fear of the remainder table:

1. Seeing your book on a remainder table does not mean the book didn't do well at regular price. As mentioned, sometimes these books come from returns (entire companies live to sort returns and sell the books at low prices to retailers). And of course, demand for a hardcover drops significantly once a paperback is released--you'll notice a lot of Nora Roberts and James Patterson on remainder tables, and believe me, it's not because their sales were flat, it's because their hardcover print runs were huge and there happened to be some left over by the time the mass market was launched.

2. Remainder customers are often people who wouldn't have bought the book at full price, but will take a chance on it at $4.98. If they like the book, they're much more likely to pay full price for the author's next release.

3. Many of your favorite stores are kept alive by remainders. It's a high-margin, high-turn business and that can make all the difference to a struggling independent bookstore. The money earned from remainder sales helps keep alive the people who hand-sell your books.

4. Some customers know all of the above. Not everyone looks at a remainder table and thinks that the books didn't work. Some people are just thrilled to get interesting titles at a good price.