There have been a few questions about the options for paying publishers outlined in the Open Letter, especially the third one, so I am going to give an example.
Also, for those of you who currently sell books through Central Books or another distributor, we are, of course, happy to go through them.
The figures in the example are, as the dodgy payday loan ads say, for illustration purposes only. The margins in mainstream bookselling vary greatly, but the average, as I understand it, is around 40% (i.e. the bookseller makes 40% profit, before paying tax, rent, wages, etc., on each copy sold; the other 60% of the cover price goes to the publisher). However, I know, because of poetry’s unique reliance on very small presses, that this sort of margin will not always be possible, and I am willing to negotiate with publishers individually.
That said, here is an example of how the three options would work in principle:
Say that you want to supply, and we want to stock, ten copies of a specific book, the cover price of which is £10.
We could arrange to buy these outright, at a comparatively low price, on the understanding that they might not sell and we may end up having to offer them at a discount. So we might offer to buy them at 40% of the cover price, knowing that there is the possibility of us still having them taking up space in a year or more’s time, and having to sell them at a discount. If we end up having to sell them at half their cover price or less, once our costs are paid, we would almost certainly be making a loss on them.
Advantages for you: you would, in this case, get £40 up front, and not have to worry about having to promote and sell those copies yourself, either in the first place, or at the end of a sale-or-return period; depending on how much it costs you to print and post your publications in the first place, this may be an acceptable margin.
Disadvantages for you: obviously, the margin for you might be very low, or even result in a net loss.
Why might you choose this option: This option would probably work best with older stock which you feel is no longer likely to sell through your own website, etc. Alternatively, if you have a relatively low profit threshold and you don’t want the hassle of sale or return.
Straightforward sale or return. You post us the books with no up-front payment from us, we agree to stock them for, let’s say, three months, but agree to pay 65% of the cover price on any copies sold. So potentially you would receive £65 for your ten books, if we sold out, but you would not receive that money until the three months are over. On the other hand, if we can’t sell the books, you get them back at the end of three months, with nothing to show for the time when they were out of general circulation. With this model, because the profit margins would be extremely low for us, it would be difficult for us to offer discounts on the books.
Advantages for you: A high profit margin.
Disadvantages for you: Potentially nothing to show for having stock out of general circulation for a set period of time.
Why you might choose this option: If you are confident that your books will sell quickly, and are not concerned with being paid immediately, then obviously this would work out well for you.
So this is the confusing one, but I think it is potentially the best option for both parties. We agree to, if you like, “rent” your books for a set period of time, on a sale or return basis, like Option 2, but this time we pay part of the costs up front. So, we might pay 30% of the cover price up front, to stock your books for three months, on the proviso that we pay 60% on all copies sold. So, in the example above we would initially pay you £30 for your ten books. If they sold out, we would pay an extra £30 at the end of the three months, meaning you make 60% of the cover price in total. However, if we only sell 7 of the books, at the end of the three months, you would get the three unsold copies back, plus an extra £12 (7 copies, at £6 profit to you per copy = £42). If we only sold five, you would get the other five back and no extra payment (five books at £6 profit for you a copy = the initial £30 we paid out). If we sold fewer than half the ten books, you would have to return some of our initial outlay of £3 per book – e.g. if we only sold three of the ten copies, at £6 a copy profit for you, this = £18, so you would have to return £12 to us when we sent the remaining seven copies back.
Advantages for you: you get some money up front; you get a healthy profit margin if the books sell. There is less initial risk to either the publisher or the bookseller than there is in the other options.
Disadvantages for you: you won’t get the full profit until the end of the sale or return period; you have to make sure you can return our initial payment if the books don’t sell.
Why you might choose this option: If you are reasonably confident that the majority of the copies you send us will sell, and need some cash up-front to pay for print/postage costs in return for having them out of general circulation for a period.
All of these options are open to negotiation. The figures quoted are not set in stone – the margins and the sale or return period are both hypothetical. There will also be room to negotiate extensions to sale or return periods, ordering extra copies, and things like offering to buy outright some copies of publications initially ordered on sale or return, at the end of the SoR period.
We want to be as flexible as we can be, since there is no point in opening this shop if it is not going to be as representative of modern UK poetry as possible. That said, the shop will cost money to run, and is going to be run as a business – rent must be paid; staff will be paid – so if you are currently running your press as something which makes a loss or barely breaks even, you will have to weigh up whether the extra copies you are likely to sell through the shop, and the extra promotion which we will give your work, are worth the drop in profit per copy sold. I would say that they are, as schemes like this increase the profile – and therefore saleability – of poetry as a whole, and are going to be good for your press in the long term. Selling poetry should not have to be a hobby, a scrabble, a second, third or fourth job. Treating the selling of poetry as seriously as we treat its writing and printing is the most effective way I can think of to change this.