Hachette: From Boom to Bust

Hachette Gets Cheap, Real Cheap
During the deluge of bad news that has pounded the publishing industry in the last six months, one company, Hachette Book Group, has emerged unscathed. Thanks to the popularity of Stephanie Meyer, Malcolm Gladwell, David Sedaris, and Jeff Kinney's Diary of a Wimpy Kid series, not to mention the dozen or so James Patterson best sellers that come out every year, Hachette is sailing through this recession. While Random House, HarperCollins, Houghton Mifflin, and Simon & Schuster were all cutting back, Hachette was handing out bonuses.

I don't begrudge anyone in publishing a bonus and was quite happy to find out that the people I know in Hachette were being rewarded for a magnificent year. Just about everyone connected to the printed word is undervalued and poorly paid, so to see bonuses being doled out during hard times was the feel good story of the Christmas season.

Unfortunately, Hachette has decided to not only withhold their largess from their bookselling partners, but they have instituted severe cutbacks that will cost many independent stores $3,000 in the upcoming year. It turns out they want to improve on their good fortunes, by breaking the backs of the very bookstores that promote and sell their titles.

Yesterday, we were informed that Hachette was eliminating their newsletter co-op program ($2,000), their author events co-op ($200 to $800 per year) and their Emerging Voices program ($200). These were all programs where bookstores acted in concert with Hachette to promote individual titles. We bought display quantities of 40 different titles and advertised them in our email newsletter to earn the $2,000. We hosted events to earn the $200 event co-op fee and, most importantly, we bought 10 copies of books by relatively unknown authors to earn the co-op attached with the Emerging Voices authors.

In most businesses, $3,000 might be a fairly insignificant amount. In the bookselling world where a profit of 2% is considered stellar, it is a critical sum. That's enough money to pay a bookseller for one hour of work every Monday through Saturday all year long. Unfortunately, that's how little booksellers earn. It's enough money that we and other stores have been brainstorming how we can possibly make cuts to save it. Heck, we are even buying cheaper toilet paper and paper towels just to realize a savings of about $1,000.

The worst part of Hachette's moves is that many of these programs are working. We bought 10 copies of Katie Crouch's Girls in Trucks when it appeared on the Emerging Voices last year. It's a book I probably would have brought in only two copies without the Hachette incentive. We have now sold 67 hardbacks and are expecting it to explode in paperback this summer.

"I think the newsletter program really worked," my Hachette rep Randy said. "You would change buys from three to eights. There were titles that you bought tens of that you never would have bought in those quantities without the extra money."

Earlier today I tried to reduce my buy of Giulia Melucci's I Loved, I Lost, I Made Spaghetti, one of this season's Emerging Voices books, from 10 to 3. It's too late. Hachette has already invoiced us. I can tell you in the future we won't look on Hachette's midlist titles with such a generous eye.

As usual, Hachette made it's decisions with very little input. No bookseller input at all from what I can tell. A little over a year ago, Hachette tried to unilaterally impose a case quantity minimum on hot new titles. That ill conceived idea, which now sounds brilliant compared to eliminating most of their co-op, met with such wrath from booksellers it was quickly rescinded.

One can only hope that this initiative meets the same fate. I doubt it. There is simply too much money on the table. It's a shame to see Hachette take their successes for granted and dump on the booksellers who have worked so hard to sell their titles. Something tells me that they won't get much bookseller support when the next tsunami hits the publishing world.

Hachette Takes a Hatchet to Indies

Hachette Book Group, better known as Little Brown, has been doing a lot of things right when it comes to independent bookstores over the last few years. Several senior members of Hachette came out to Boulder late in 2006 to have discussions with dozens of representatives from independent bookstores all around the country. During those conversations, I certainly got the sense that Hachette was a publisher that really cared about the independent marketplace.

It's not just the words of a few executives that put them on the positive side of the ledger, however. Their actions speak as loud as their words. No one in the business has a better cooperative advertising plan to offer bookstores for their newsletters. They, unlike Penguin USA and Simon & Schuster, actually let the bookstores choose what books they want to feature, and the co-op pool is generous enough, unlike Random House and HarperCollins, that we don't have to be all that picky. Hachette introduced a thoughtful and superbly marketed imprint, Twelve, last year, giving independent bookstores tailor-made books, like Christopher Hitchens' God is Not Great and Christopher Buckley's Boomtown, to sell to our demographic. They have also honed their Emerging Authors program, throwing marketing and co-op dollars behind writers that independent bookstores can sell.

It was with all this in mind that I began my Hachette appointment last Thursday. Not even the immediate over hyping of James Patterson pablum (a full-color, glossy calendar marked with the release dates of his eight new books) was able to break me out of my good spirits. It was only when I tried to order six copies of Patterson's novel Sail (co-written, of course, by Howard Roughan) that the appointment quickly turned sour. Suddenly, my thoughts of Hachette went from warm and fuzzy to cold and prickly.

My rep informed me that if I ordered six copies of the Patterson book, I wouldn't get them in time for the national laydown date. The only books that Hachette will send out on time are those that are ordered in carton quantities. I looked at him as if he were speaking Aramaic and was an escaped lunatic from a bad Mel Gibson film. I smiled, in response: surely I had misunderstood him. Obviously, Hachette wouldn't renege on the most basic job of a publisher -- to deliver new books on time. I asked him what he meant. Unfortunately, what he meant was that Hachette, for all its smooth talk and gestures of good will to the independent stores over the last few years, had, in fact, adopted a policy that would put independent stores around the country at a distinct competitive disadvantage. Worse yet, the customers would think it was the bookstore's fault when a beloved author's title was not in.

I took a few deep breaths and tried to calm down. It's not really possible to be mad at my Hachette rep. He is about the nicest, kindest man I know, and besides, he didn't come up with this asinine policy. "When will we get the books?" I asked. He assured me that we would get the books within a few days after the laydown date. "That simply is not good enough," I told him. Faced with an immediate decision on Sail, however, I upped our order to meet the 10-copy carton requirement to ensure I'd get the books on time. We typically sell more than half of all the Patterson books (typically six or eight copies) that we are going to sell in the first two weeks of the book's release. I couldn't risk missing that window because of Hachette's ineptitude.

As the appointment went on, I seethed with anger at every book I ordered. Between my buy and the kids' buy, the Boulder Book Store easily ordered over 500 books on Thursday. There were a handful of laydowns that I just couldn't bring myself to order in carton quantity. When those books are released, we will not have them. Despite our large buy, our order isn't good enough for the number crunchers at Hachette. Those will be dark days in our store. Hachette will rev up its publicity machine with a national media onslaught for these titles, and we will invariably have a few customers who will request those titles. We won't have them. Of course, Borders and Barnes & Noble will have them in stock. It's not so hard to order a carton of books when you have a 1,000 locations.

Sure, I could order a carton of every laydown book, but just how much shipping (Hachette's money sending the books to us and ours on the returns) do we need to burn when we know we aren't going to sell that many books? Shame on Hachette for putting independent bookstores around the country in this position.

Obviously, Hachette has figured out that it costs more money to break open the cartons and repackage these books in a timely manner. Somehow every other publisher has worked out a method that doesn't unfairly penalize independent stores. Every other publisher gets their laydown books to independent bookstores on time. Only Hachette has decided to purposely thrust themselves into a situation where they will appear incompetent to booksellers throughout America. In the hope that Hachette will rethink their terribly insensitive decision, here are a few suggestions on how they could address this issue:

• Give stores incentives to buy carton quantities. Perhaps, Hachette could offer extra co-op or discount on the first carton that an account orders to each ship-to location. Gigantic stores that order 5,000 cartons to a central distribution center would only get the deal on the first carton. Smaller indies would have some encouragement to bump their orders up.
• Make all new releases national laydowns. Random House sets all of its new books to be released on Tuesdays. It doesn't matter if it's the biggest book of the season or a book with a tiny print run. The problem with Hachette is that only a dozen or so books are laydowns. They end up getting caught shipping five books at a time when an account doesn't order a full carton. If every title were released as a laydown, there'd be at least a box or two of books being shipped to the indies every week.
• Realize that there is a cost of doing business. Breaking up cartons for independents is just a small cost of doing business. Stop counting your pennies and look at the broader scope of the relationship.
• Up the price of laydown titles by $1.00 to cover the cost of shipping individual books. Will anyone really notice if Sail, already listed at an inflated $27.99, were $28.99 instead?

I hope that Hachette can figure this out, because I'd like to get back to concentrating on all the great things they do. There's a new David Sedaris book, Indefinite Leave to Remain, coming out in May, and it doesn't get any better than that for an independent bookstore. Oh yeah -- I bought 10 cartons of the Sedaris book, plus a display. A purchase like that should be enough to convince Hachette it's worth their while to send the Boulder Book Store a few stray books on time.