The internet is disrupting the core of book publishing and distribution. In 2008 at the beginning of the recession, I steered the specialist publisher David & Charles (now F&W Media International) out of the turbulence of the recession by focusing on two key areas of cost improvement: a) moving away from loss-making negative-option direct mail book-club operations and b) outsourcing to better value trade distribution. These were both critical to the business and the goal was to drive higher-margin publishing and e-commerce activity, which we achieved.
Prosperous new distribution territories
Making decisions about changes in distribution is complex but there has never been a more urgent time for book publishers to embrace e-commerce fulfilment. That’s because book audiences are shifting from being mass clusters to niche audiences connected online. The core of book publishing is no longer about large print runs and a few retailers of scale. Book publishing is abut low cost distribution to individuals’ homes.
As the market transitions to meet the needs of smaller, more fragmented reader groups, there is a growing demand for more effective and targeted e-commerce fulfillment to reach the many people who are ordering specialist books from their homes. Therefore, publishers urgently need to integrate their direct-to-consumer (DTC) operations within their overall commercial operations as they shift from predominantly B2B trade-focused businesses to increasingly consumer-focused B2C businesses.
Fertile opportunity for smaller specialist publishers
In printed books, it’s difficult to compete with Amazon on scale, pricing and just-in-time delivery but there is a opportunity for some specialist publishers to work with seasoned, lower scale, reliable e-commerce, white label and drop shipment partners. This model might not work for everyone but for niche & enthusiast publishers focused on community, DTC can be a great revenue and margin driver.
The DTC opportunity is really most suited to special interest publishers bundling a variety of non-book merchandise with their books (paint brushes and easels with art books or needles and scissors with sewing books). These publishers need solutions which allow them to add value by leveraging their specialist product and customer knowledge.
If a publisher is unable to offer more than they already offer customers on Amazon, they should not bother to set up separate fulfilment because a) they will fail to ween customers off Amazon and b) they will add cost rather than increase margins on their business.
Gap induced demand
If there’s a market for bespoke fulfillment, it’s because there is a gap in the supply side. Current book distributors, besides Amazon and its competing online clutch of online book retail sites, focus their efforts on reaching a dwindling trade market and there’s little evidence amongst these distributors that they are adapting to the changing market, changing customer behaviour or that they are able to meet the needs of publishers wishing to fulfill the specialist needs of special interest communities. There are specialist publishers in the UK working with their usual trade distributors to fulfill DTC orders, but it would likely be more profitable for the publishers if UK customers ordered their books from Amazon rather than the publishers own e-commerce platform.
If I were a special interest publisher today
I’d be looking for a fulfillment partner for e-commerce who can offer the following:
1. Competitive Pricing
This can only come from economies of scale since its dependent on the overall volume a fulfillment house dispatches. Therefore, I’d seek a partner with a solid list of customers and a growing turnover. A profile not dissimilar to The Hut Group.
2. Digital Marketing
I’d look for a partner with an understanding of digital marketing and social media who can contribute to online and offline marketing and PR efforts to achieve the best pull and push marketing.
3. Customer relations management
I’d look for a distribution partner who could grow my list of customers emails and and promote/sell more of my books and merchandise to this group via targeted direct marketing.
4. Meta language
The ability to be discovered online is critical when you’re niche publisher with specialist titles. This is why successful online dicsoverability relies on having the best possible product descriptions in the form of carefully chosen and structured meta language. I’d look for a fulfillment partner with an acute understanding of this prerequisite. Although a publisher needs to develop this modern day digital marketing skill in-house, a worthwhile distribution partner needs to demonstrate an understanding of the skill.
5. Feedback from customers
The most valuable driver of success for any creative publishing business is continuous and reliable feedback from customers, so look for a distribution partner that is able to provide consistently good feedback via their customer service people who can tell you what is and isn’t working: what customers are/aren’t buying and more WHY? Without this feedback it’s very difficult for editorial and marketing teams to improve the offer for future and repeat customers.
It’s in the nature of special interest communities that they’ll need individual care so there’s a great opportunity around regular customer interaction. Look for a fulfillment partner whose staff are trained in the art and craft of effective up-selling. Increasing the average basket value is a key success driver.
This will be an important future need for all niche publishers and consideration of a fulfillment provider’s capacity to integrate digital content distribution and DRM will be key. It’s good to have one-stop solutions.
Finally, it’s a myth and a potential business calamity for a an small or medium-sized publisher to believe they ought to be running their own DTC fulfillment. Publishers are better off seeking solutions of mid-scale or they will take on an commercial activity that will drive their costs up not down.
If you feel your company is a pioneer in mid-scale e-commerce fulfillment, I’d be interested to hear your experiences. Please comment below or send me an email.
If you’re a publisher who’d like to discuss your e-commerce solution please contact me for an initial chat.
The above article originally appeared as a comment I posted to the Specialist Media Network discussion group on Linked In as a response to AASM Fulfilment suggesting publishers could compliment their revenues with e-commerce.