Once & Future

March 17, 2010

The B-Team

It has just come to my attention that Oxford University Press is going to be outsourcing all of its independent bookstore distribution to H.B. Fenn & Co.  An understandable maneuver, I suppose, but one which saddens me anyway, as I’ll explain below.

First, a little Bookselling 101 for those of you who’ve never been on the supply side of things.  Books are sold, generally, along a publisher -> distributor -> bookstore chain.  While many publishers often have their own distribution division (Random House, Penguin, Harper Collins, Simon & Schuster, etc.) this is generally a cost-saving measure provided by a big publisher who can afford to diversify like this.  Smaller presses usually opt to have a bigger company do their distribution (Anansi, for example, is distributed by Harper Collins).

In the strictest technical sense distribution and publishing are two different businesses – one side creates and markets a book, while the other physically gets it into bookstores (and back again, if the case may be).  In cases where the publisher is not owned by the distributor, there is generally some arrangement between them to ensure that the distributor gets a cut of the books they distribute.   In some cases, this is an additional discount offered to the distributor and in others, the distributor limits the discount given to the bookseller.  In any case, the distributor is another actor in the “book chain”  who needs to be paid.

I don’t think it’s any coincidence that distributors who are also publishers tend to offer bookstores bigger discounts than than distributors who have to get their books from an out-of-house publisher.  For a big publisher-distributor the cost of distribution is just a flat cost spread out over their entire publishing effort (which, in the case of a huge company like Random House, is a lot of books).  Outside distribution on the other hand costs the publishers a bigger discount than if they can sell straight to a bookstore, or costs the bookstore more in the form of a smaller discount.  The extra step is paid for by someone.

Oxford is a big enough publisher that they do generally handle their own distribution.  They own a warehouse in Toronto and have books shipped here from the US or the UK or whatever they’ve been published.  They will continue carrying these costs in the future because they are going to continue distributing to large customers.  H.B. Fenn will, it seems, only be taking over their small accounts, which means all Oxford is saving is the man hours and shipping costs of a portion of their distribution.  This is Disturbing News Part One.  This means that Oxford thinks they will lose more m0ney on a dude packing up boxes, some cardboard and some CanPar shipments than they will lose by discounting all their independent Canadian sales to Fenn.

Oxford isn’t some tiny small press.  Among other things, they sell dictionaries.  Everyone carries dictionaries.  By cutting distribution to small bookstores it looks to me as if they are saying they were making less money in a year selling dictionaries to every independent bookstore in the country than they were paying a guy to pack them up and ship them out.

Now, there’s another, more sinister option which is that Oxford isn’t going to be cutting Fenn an extra discount at all, and instead Fenn will be selling the books at a lesser discount to independents, which is terrifying.  But I don’t think Oxford could get away with this and so I don’t think this is the case.  Their discount isn’t fantastic to begin with, and Fenn generally has a decent discount on both their own and their distributed titles, so the idea that indies will suddenly have to pay another 8-10% on Oxford titles seems improbable.

No, what this means is that independent bookstores aren’t selling books, or, at least, aren’t selling Oxford books.  This is annoying to me; I know many people who split their book shopping in arcane ways to justify a “supporting the little guy” stance while still getting those nice Chapters/Amazon discounts on big purchases.  But if it’s going to encourage moves like this one, this is only a bad thing.  Splitting “big” from “little” distribution won’t benefit bookstores at all.  Because the outside distributor needs their cut the extra cost is more likely to be passed on to the store, a pressure the in-house distribution won’t feel.  Not to mention other annoyances like the extra time it will take to process an order from a third party compared to ordering it from the source.  As if the bookselling world isn’t a hazardous enough place for independents these days – two-tiered distribution like this is just another straw on the camel.