John Kremer's main orientation is toward self-publishing. He offers helpful information for self-publishers, but much of it's not relevant to writers who are or who want to be commercially published.
J.R. Tomlin said:
I notice that wholesalers offer either consignment or invoice-based purchases while while distributers offer only consignment purchases. Ok the difference is obvious. I'm not asking the difference. What I don't really understand is how this difference affects the publisher and why this would be an important difference.
I'm afraid I don't know the answer to this question, but I'm thinking that maybe it has to do with returnability. If a publisher's books aren't returnable, it would want invoice-based purchases, and if they are returnable, it would want consignment purchases. Distributors assume that the publishers they work with do accept returns. Anyway, that's my guess.
Also I notice that distributors have payment based on a percentage of NET sales while wholesalers while with wholesales it is based on a flat discount of retail. Do I understand that correctly? And if so, what is the affect on the publisher.
This is apples and oranges, in a way--purchases and payments. Wholesalers buy books from publishers to re-sell to retailers, whereas distributors sell books on behalf of publishers to both wholesalers and retailers. Wholesalers buy at a flat discount off a book's retail price, often 55%. Retailers buy at a smaller discount, often 40%. So depending on whether the distributor is selling to a wholesaler or a bookstore, the sale will generate a different net. The distributor then keeps a percentage--I believe 25% is common--and the publisher gets the rest.
Although having a distributor is an extra cost for a publisher, the additional sales generated by wider bookstore presence should offset that. At a certain point, though, it can become more cost-effective to do your own distribution. Many larger independents handle their own distribution, and the mega-publishers all do.
Is the real difference that a distributor has a sales staff?
It's one of the main differences, yes.
- Victoria