An Interview with our Sales Director for Trade, Library, and Wholesale

CM: Jeff Palicki is IPG’s Director of Sales for Trade, Library, and Wholesale. This is a conversation about working with the national and regional wholesalers. Let’s start with the national wholesaler Baker & Taylor.  Jeff, describe how you work with them.

P:  I will start by saying that they require a long lead time, very similar to how the national accounts like Barnes & Noble work. For example, in December I went to Baker & Taylor to present all the titles we have coming out in April, 2015. That amounts to five months of lead time.  And when I arrive at their offices, all the information their buyers need must already be loaded into their system.

CM Do they have multiple buyers?

JP: Yes. I have appointments scheduled with seven or eight category buyers, and I will spend 15 to 30 minutes with each of them.  Depending on the time of year, I will have between a dozen and 100 titles to sell each one.

CM: That does not sound like you have much time to sell individual titles.

JP: I don’t.  That’s why the sales call needs to be tightly choreographed. They have a tool called Publishers Alley, which is a web-based portal that I can go into and create what they call a “buy report.” Before the sales call I load the new titles I am going to sell. Then I input competitive or comparable titles and the Pub Alley system supplies Baker & Taylor’s own sales history for each of those comp titles.  So when I sit down with the buyer we are working with rich and relevant data to determine the buys.

CM: If you’re a small independent publisher, can you use Publishers Alley?

JP:   It might be difficult. Publishers Alley is a subscription-based function that IPG purchases on an annual basis. We pay to use this sales tool.

CM: Will the Baker buyers sit down with indie publishers?

JP: One of my category buyers is the small press buyer as well. Small presses have access to her, but routinely she come to us and says, “Here’s a press you might want to move into one of your programs.”  Baker appreciates the efficiency we bring to their buying process.

CM:  Selling Baker sounds a lot like selling Barnes & Noble:  metadata way ahead of time, category buyers, a strong insistence on comparable title information.

JP:  That is true, but there is however an importance difference: I am not competing against another book already on a shelf.  To get a new title on the shelf at Barnes & Noble you usually have to push an old one off. But when I am selling Baker, I am not arguing that my new title is better than one they are currently stocking. Instead I am trying to establish a pattern or velocity for how a book will sell for them based on their actual sales data for comparable books. The comps they will accept must have the same format, a similar price, and have been published within the last few years. Their experience has taught them– and I agree – that if three comparable books,  A, B, and C, sold from five to fifteen units at each of their four warehouses, that is a very strong indicator of the quantity we should put in of our new title. Saying that you’re selling to a national wholesalers is a bit of a misnomer; in fact, it’s much more of a service we provide to help them achieve optimal sales and supply chain efficiency. Wholesalers are really a part of the supply chain rather than an end customer. Baker & Taylor’s aim is to put a book in at its ideal quantity to cover its first 30 days of sale. They want to get something like 75% sell-through in that first 30 days and close to 90% sell-through in 90 days.

CM:  So the period for which they’re stocking is basically 30 days? That’s certainly much shorter than it used to be.

JP: Yes, they used to keep a lot more inventory on hand. Neither we nor they want high returns.  On the other hand nobody wants to have to ship or recieve more books the following week either. They have refined their approach, and their buying is quite accurate. After the initial buy it is their replenishment team that maintains the proper inventory levels.

CM: Is there some sort of minimum buy?  If they can’t buy say 50 copies, do they just say “forget it”?

JP: No. Actually, they want the right amount regardless. It could be five copies. There are titles on our list where the right initial buy is very minimal.

CM:  Is it true that for low buys they will just go with your recommendation?

JP: That’s correct: for buys under 100 units I just fill in their order electronically without speaking to their buyer.  But you have to earn the buyers’ trust to have this privilege.

CM:  We’ve covered Baker & Taylor.  How about Ingram?

JP: Ingram and Baker are similar in that they are both national wholesalers that service independent bookstores, libraries, international customers, and various other customer types.  Ingram’s focus is more on the retail side; Baker’s emphasis has always been on library and that’s still a very important part of their business. Ingram, in some ways, is slightly simpler to sell. We work with just one buyer there rather than with a number of category buyers. They also have a similar threshold approach: if our recommended buy for a title is below 40 units, the buyer will accept our suggestion and enter it into their system.

CM: Will Ingram, like Baker & Taylor, work with small independent publishers?

JP: They do, but again I think that they’re also looking for efficiencies in the process, and they would much rather have one rep come in and present a large assortment of titles from a group of publishers than deal with many individual small presses.

CM: What sort of book metadata does Ingram require?

JP: We send them our ONIX feed ahead of time, and we also prepare the list of titles we are planning to present to them and send it to the buyer’s assistant the week prior, to make sure that the ONIX feed was successful. One of the key differences between Ingram and Baker is that when we are presenting the titles to the buyer at Ingram, she’s physically keying in the order right there; and the very next day that order gets transmitted electronically to us. So there’s a certain immediacy to this procedure, and if you’re there and try to present a title that is not in their system, you will find you have missed the boat, and it will be hard to recover from this mistake. Preparation is everything.

CM:  Let’s talk a bit about the terms of trade with these big national wholesalers. How much discount do they require? What’s the freight situation? Are there other financial issues?

JP:  We are not quite at liberty to disclose the discounts they require, but as for freight both of them now require publishers to cover some part of the freight charges. This is not a high cost for IPG because we send a semi-trailer load of books to each of them every week. The cost is pennies a copy. But if the books had to be shipped UPS or FedEx, the cost would be a serious burden

CM: Are there co-op fees or advertising allowances?

JP: They’ll certainly take our money. Ingram and Baker want us to spend a modest percentage of our total yearly business on their advertising programs. For certain titles this sort of advertising can be quite effective. When we had a book about the new Pope, a full page ad in the Ingram Religion Advance Magazine got the word out to the right customers.

CM:  In these conversations we always have to bring up the distressing question of returns. What’s our experience of returns with these national wholesalers? How bad are they? Do they really sometimes order from one of their distribution centers at the same time they are retuning copies from another one?

JJP: Their returns are higher than 20%, which is our overall average. But let me go back to what I was saying about how we sell the books in. We use hard data to accurately gauge the right amounts to start with, and there is just no point overselling wholesalers. If you do, the books will come back in 60 to 90 days, and then you will have an irritated buyer to deal with. It does appear that they are looking to hold less inventory, overall.

This past year in particular, I’ve seen what seems to be a marked increase in the speed and frequency of returns that are coming from both Baker and Ingram; and where in the past you might have seen a reduction in that return volume in the run-up to the holiday season, that doesn’t appear to be the case this year. They’re constantly evaluating their inventory positions and cleaning out titles that aren’t meeting their internal metrics. As for buying a title for one DC and sending back returns of the same title from a different one, yes they do. No doubt it is just a question of efficiency.

CM:  We send lots of data to the national wholesalers. Do they send data to us?

JP: IPG collects detailed sales information from Ingram and Baker & Taylor once a week. We know what they have in stock in each of their distribution centers, what they have shipped in the current and previous week, in units and as a percentage of what they have on hand, and what they have on order. This information–together with the similar point-of-sale data that we collect weekly from our twelve largest retail customers– allows IPG to accurately anticipate needed reprints for its client publishers’ titles and also to head off reprints that are not warranted or are premature. We know how many copies are out in the market and their rate of sale, which is far more valuable information then what we used to have, which was simply the number of copies we had shipped over some period.

Moreover, both Ingram and Baker & Taylor have websites – Pub Alley for Baker, I-Page for Ingram–that allow for even more frequent and deeper analysis. You can run sales reports by category, customer type, region, or almost any parameter you can imagine. Such information is vital when major publicity breaks. A starred review in Library Journal, for instance, will have an impact on sales, and as soon as we get the news we check to see that the wholesalers are adequately stocked, and if not, we pass the publicity news on to them with a buy recommendation.

CM: Do they respond to such news?

JP: Yes they do. Both request, and we provide, as much information as possible about publicity happenings. And Ingram will gladly stock-up in response to author events in a given part of the country if we provide the tour dates and venues. If for instance we have an author touring the Pacific Northwest they will make sure that their Roseberg warehouse is appropriately stocked. That way the bookstore can either order from Ingram or direct from us.

CM: Let’s take a quick look at the regional wholesalers

JP: There are still some regional wholesalers, but not as many as there used to be: Book-a-Zine on the East Coast, Partners, Partners West are still important parts of the supply chain, particularly for regional titles. They focus on regional offerings–books they know will move in their part of the country. They are closely aligned with independent booksellers in their territories, and they can be an important way for indie publishers to get the word out about their regional titles.

CM:  Why don’t the bookstores always just order from us?

JP:  Ingram and Baker are like the Super Wal-Marts or the Super Targets of the grocery world for books. They stock almost everything, so the bookstore can pull up their sales from the previous day and order IPG books, and Random House books, and some titles from Phaidon, and they will receive the whole order the next day with just one invoice to process. The bookstores do not get as good a discount from the wholesalers as they do when they order directly from us, but the wholesalers make whole-store replenishments very efficient. The national wholesalers are an essential part of the supply chain. They are not about to disappear any time soon.