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Denise
Brown and I set up Carroll & Brown Ltd. as a ‘book packaging
company’ 11 years ago, and it’s now just over one year
since we also embarked on becoming actual publishers in the UK.
Throughout 2000 most people in the industry did tell us that we
had chosen probably the worst time ever to launch a publishing imprint
(combined with other problems of our own making), but if I had it
to do all over again, I would.
Our
core business is that of book packager. As such, we come up with
ideas for books, commission the text and illustrations, have the
material reproduced and finally deliver printed books to publishers
around the world. Responsibility for marketing and selling the books
falls to the individual publishers and it’s their respective
imprints that go on the book jackets. Our usual deal is to sell
each publisher a certain number of copies at a per book price, royalty
inclusive. Making a deal is not rocket science. Every publisher
has an idea of what he/she thinks the book should sell for and also
works to a mark-up - generally five times cost. Therefore, if the
book is to retail at £10, the publisher would want to pay
a packager £2 per book. Quantity, of course, does have an
effect; the larger the number of copies delivered, the lower the
price. Each deal should cover the cost of the printing and make
a contribution to the book’s origination. If we sell the book
sufficiently well and/or it reprints often, we should exceed our
origination costs and make money. Packagers contract to receive
monies at intervals, so cash flow can be maintained, and as long
as they make sufficient deals to cover their origination costs,
their investment in their books is relatively risk-free. A publisher
will make more money out of a successful book, but if the book does
not sell through, the packager still has his/her money though the
client publisher may not make a repeat purchase!
Too
many books, too few outlets
Deciding to become a publisher when one is already
a packager is very different from deciding to become a publisher
in the first place. I wouldn’t advise anyone (even if they
were rich and well-connected) to become a publisher these days -
so why did we do it?
First, although we had produced many best-sellers for UK publishers
- among them most of Dorling Kindersley’s Dr. Miriam Stoppard
books (Conception, Pregnancy and Childbirth, Complete Baby and Child
Care, for example), Anne Hooper’s books (The Ultimate Sex Guide,
The Kama Sutra, The Pocket Sex Guide), and Mary Berry’s books
(Complete Desserts Cookbook and Family Cookbook), Practical Feng
Shui for Ward Lock, Shortcuts to Great Gardens for Reader’s
Digest, and so on - we had found it increasingly difficult to sell
our books to UK publishers. Publishers mainly depend on trade sales,
but there are too many books and too few outlets. In the past, we
could sell 20,000 or even 30,000 copies to a UK publisher, now if
a publisher talks to us, he/she is talking only 3,000 to 5,000 copies.
Without English-language copies, we couldn’t hope to sell foreign
editions (the real bread and butter) and by publishing ourselves
we could ensure the books could be ready for translation sooner
rather than later (or never).
Second, we felt it would help build the company’s profile and
we could attract better staff and authors. Third, we believed it
would increase the company’s turnover substantially: even if
we
couldn’t push more copies into the trade than the people we
were selling to, we could earn more money from non-traditional book
outlets and direct sales operations by dealing directly and we would
have direct access to English export markets.
Also, I had been working at Dorling Kindersley Limited as Editorial
Director in 1983 when DK decided to become a publisher in the UK.
Previously, it had just been a packager, like us. I created two
thirds of their initial publishing list and over the years I continued
working there, I saw that publishing was good for DK’s bottom
line, so naturally I hoped it would be for us.
With these very good reasons encouraging us to go into the trade,
how did we make our entrance? Well, although we knew a great deal
about producing high-quality books and selling them to the international
market, we knew next to nothing about selling books successfully
in the UK. We also knew that it was financially out of the question
for us to hire a full complement of salespeople and a high-powered
marketing team. Moreover, it would be hard to find a distributor
(responsible for warehousing, shipping and invoicing) willing to
take us on at a reasonable commission. A distributor’s commission
depends on the quantity of books invoiced and as we had no proven
track record, we had to expect to pay the highest amount - 12% upwards.
Everything
we wanted...
So we decided to find another publishing company
to represent us - one with a sales force, distribution house and
marketing expertise already in place. The choice wasn’t large;
most of the publishers to whom we broached the subject felt we were
too small to bother with, and with one that was interested, there
wasn’t enough synergy with the books they published. That left
only one other company (hereafter referred to as ‘X’),
but we thought it had everything we wanted. X had a similar list
- cookbooks, health books, how-to books - but only in paperback,
whereas we mostly produced comprehensively illustrated hardbacks;
it had an impressive and apparently go-getting MD; a hardworking
marketing manager; a freelance sales force that liked and felt they
could sell our books; and it had negotiated a very agreeable rate
with its distributor, from which we would benefit. Moreover, we
had a financial advisor look over the company’s set-up and
he assured us that it was selling its books well. Our main feeling
was that if this company was doing okay with its list (which we
thought far inferior to ours), imagine what it could do with our
great looking books? Well, we soon found out...
Breaking
down the print costs
I began to do some financial planning. We were lucky
in that as packagers, we’d generally be printing ‘our’
books for someone else and we could run-on with the printing, thus
saving ourselves a substantial amount on print costs. Even so, we
began life as one of those publishers who opts for 3-5,000 print
runs. In addition to being out of pocket on the print costs for
as long as it took to sell our books, I also had to add on costs
for publicity and marketing materials (400 book jackets, 300 sets
of colour proofs, etc.) and factor in sales, distribution and marketing
commissions. We had agreed to pay an advance for these and so, instead
of being quids in by selling to another publisher, we were now paying
out monies every month. My estimates showed we needed to sell at
least half our print run at a 45% discount in order to break even.
Things started out well. By the end of December 1999, we had six
good titles to sell in for spring 2000 and another six planned for
the autumn. We had settled on print runs, marketing plans, possible
publicity. Everybody seemed focused and enthusiastic. I had been
worried, however, by a sales trip to W.H. Smiths when the buyer
suggested, without ever opening it, that A Natural History Of The
Unnatural World, our spoof cryptozoology book, belonged in the pets
department! And in early January, things happened that were going
to impact greatly on our success. X, the company we’d gone
in with to act as our sales, marketing and distribution agency,
had been badly let down by its distribution house and so severed
connections with it, as well as with the independent sales company
it had been using, plus its in-house sales manager. ‘Nothing
to worry about’ X’s MD assured us, especially since she
was hiring another in-house sales director who was putting together
a freelance sales team. Also, she was in discussions with a new,
and better, distributor.
Our first sales conference took place in February. As book packagers
we generally only sell to one representative of a publishing firm;
now we had to convince a roomful of disparate individuals how great
our books were and how easy they would be to sell. It’s a whole
different world! Although one touches on similar subjects - content,
author, price - with the former the ‘idea’ of the book
prevails; with the latter, it’s merchandise. You have to encapsulate
the book in a few words, give the reps plenty of ammunition against
rival publications, and most of all, talk discounts. Somehow the
print quantities proposed by the initial sales team were looking
a bit optimistic. All the current reps took their opportunity during
lunch to tell me how bad trade sales were and would continue to
be.
Nevertheless, we decided to announce our arrival with some fanfare
at the London Book Fair in March. Le Cordon Bleu, with whom we create
books, agreed to send some chefs to our stand with canapés
and we would supply the drinks. We were, however, taken aback when
in the middle of hectic meetings, a team of caterers arrived with
trays and, commandeering one of our sales tables (the stand was
only 2x5 metres), proceeded to pipe gourmet spreads on biscuit bases.
Before too long I was imprisoned between book shelves and sales
tables frantically opening wine bottles for some very thirsty publishers.
I quickly made a note to myself to rethink any plans for the Boy
George cookbook we would be launching at next year’s Fair.
Anyhow, at least we achieved one of our aims - a photograph of Denise
and myself, plus chefs, in Publishing News and a brief notice of
Carroll & Brown Publishers’ arrival on the scene.
April 2000 and the first books are out in the UK under the Carroll
& Brown publishing imprint. Nothing earth-shattering but we
begin to see our name in the press, mentioned at the bottom of the
features and/or reviews some of our books are garnering. Often,
however, the references are incorrect, but what can you do? Books
continue to come out during the summer and then we start on our
autumn titles. In July, we received our first money from the distributor
- £1,628.51 - but our records show we have spent £94,744.97
on printing, advance commission and a marketing assistant, and there’s
more trouble back at the ranch... X’s latest sales director,
the one who was particularly bullish about the quantities of our
autumn books, had been let go in June and there’s now a part-time
person put in charge of the reps. We’re not really sure what’s
happening particularly as the print-outs from the distribution house
showing sales of books can’t be reconciled with stock figures.
(Much later on we are able to decipher sales sheets as all the information
cannot be shown on a single form.)
The new sales director now rings us almost daily; his brief was
to move stock but he’s doing so by selling to remainder houses
and special sales operations. The 45% discount goes out the window.
Now we hope just to cover print costs and distribution; we say no
marketing/sales commission payable. I start surfing Amazon.co.uk
just to get a feel of how our books are selling; when one of our
books ranks up in the thousands, rather than low in the hundred
thousands, I feel happy. In late summer and early autumn, unsettling
articles appear in the trade press about X’s finances.
Decision
time
In November we take a cold, hard look at how things
are going. X’s marketing manager has now left and her young
assistant promoted to take her place. So, too, has the young computer
wizard who also took care of export sales and our editorial assistant.
The sales director says he is only temporary and wants to create
another operation, and our distributor has begun to charge us directly
even though we are already paying up-front. Authors ring up complaining
that nothing is happening with their books and we begin to hear
the dreaded question ‘are you all right?’ as Private Eye
magazine reports on X’s deteriorating relationships with its
authors and former staff. At this stage our bank manager isn’t
pleased that our company accounts show only negative figures rather
than any contribution from the publishing arm, and cuts back our
overdraft. The weekly sales reports from our distributor begin to
show disturbing minus figures - the dreaded returns. Our in-house
records show that at the end of the month we have earned £87,698.60
and spent £141,713 on the publishing operation. We decide
enough is enough (or at least that not enough is enough) and end
our relationship with X.
We spend December initiating and agreeing an arrangement with another
independent sales force who uses our distributor, and to whom we
will pay a higher sales commission but no advance. They also agree
our list of reserved accounts - those we will sell to directly from
in-house. The distributor sets our charges, which though higher
than previously (X having over-egged its expected turnover) are
the best we could hope for. We contemplate how to handle the marketing
work with someone out-of-house or bring some of it inside.
We are now trying to concentrate on the positive aspects of the
situation. We’ve kept the number of changes we’ve had
to make to the minimum, there is still a good part of our stock
available to sell, and we believe we have a strong spring 2001 list
that will benefit from our new arrangements. We’ve hired an
in-house sales manager who will liaise with the independent sales
team and look out for special sales opportunities for us. He assures
us that the publishing company should do at least £500,000
worth of business next year and he’s already secured a special
sales deal on The First-time Gardener (published in March). There
is also lots of media interest in Le Cordon Bleu Wine Essentials,
coming out in May. Plus we’re contemplating the extra exposure
we’ll get by publishing Boy George’s macrobiotic cookbook,
Karma Cookbook, since this is a real departure for the pop star
and popular dee-jay. Best of all, the packaging business is doing
well and we’ve already booked £2m of this year’s
money in the first half of our financial year.
Learning
from mistakes
Publishing in the UK was not the simple exercise
we had first believed. I still think we were right to try and operate
through another publisher, although our choice was obviously not
the best one. We’ve learned a great deal over this year and
while I can’t guarantee not to make more mistakes in future,
I’m pretty certain we won’t repeat those we’ve already
committed. We are lucky in that our packaging business is a wonderful
cushion for the publishing and that publishing has brought us new
insights into the packaging business as well. 2000 was a big learning
curve for Carroll & Brown; let’s hope that 2001 demonstrates
we’ve paid attention. n
Amy Carroll is managing director of Carroll & Brown Publishers
Ltd.
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