Sunday, November 09, 2008

More Trouble At Borders?

On Friday, GalleyCat wrote about receiving "a copy of a 'special alert' sent from a major book distributor specializing in independent publishers to its clients, warning them that Borders, whose financial difficulties are widely recognized, 'now tell us that they will not be paying us for two months due to anticipated excessive returns,' a situation the company views with understandable concern."

To read the entire GalleyCat post, go here.

Publishers Marketplace identified the distributor as IPG (Independent Publishers Group). In the Friday edition of Publishers Lunch, they said that IPG "clients were told that for new shipments to Borders, the distributor will guarantee only the actual printing cost of those books, for as long as 'there are serious concerns about Borders viability'."

Publishers Lunch also quoted the president of IPG, Mark Suchomel, saying that "'almost all of the clients' have instructed the company to continue shipping orders to Borders. He notes that . . . in this case, 'we're just asking the publishers to take some of the risk with us'."

Blogger Edward Champion published the letter from IPG to publishers. Here is a portion of that letter:
To put some numbers on this concept: a $14.95 paperback should cost about $1.50 a copy to print. But IPG bills Borders $7.48 for that copy (a 50 percent discount). That is a difference of $5.98 or almost four times the printing cost.

Given these considerations, IPG must now ask its client publishers to choose one of two options in regard to future Borders orders for their books. Publishers must either:
  • Instruct IPG not to ship their titles to Borders
  • Accept the provision that IPG, for Borders business only, will guarantee payment only for the publishers’ historical printing cost of books that are not paid for, rather than for the whole amount of any unpaid invoices
To read Champion's entire blog, go here.

The UK's The Bookseller reported on Friday:
. . . Suchomel said 90% of responses received since the memo had been issued were positive, with its publishers wishing to continue trading with Borders. “For Borders it will be very little change,” he added.

A spokeswoman for Borders US declined to comment on the memo, which had not been seen by the company. However, she said: "We continue to pay our vendors and to receive product from them for our stores. We are pleased with the progress we are making in working with the publishers and improving our inventory productivity as it will make our business healthier for the long term future."
The Bookseller also indicated that IPG "distributes books for 300 trade publishers in the US . . ."

You can read The Bookseller article here.

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