Crimbophobia • 29 January 2008 • The SnowBlog
Em and I are currently poring over the Snowbooks accounts, looking for clues, tips and dire warnings about what's worked for us in the past, with a view to deciding what might work in the future. One thing that stands out is the untold story of a certain Christmas from years gone by. That story can now be partially told - partially, because we don't want to alienate further the retailer who nearly bankrupted us. Those not of faint heart, read on... Hollywood frequently concerns itself with the true meaning of Christmas, but it's also something that most manufacturers and retailers have to grapple with. Christmas is a big expensive gamble. A lot of stock gets sold, but then a lot doesn't - and even getting a seat at the table costs serious money. It doesn't suit everyone. But one Christmas Snowbooks decided to go for it. Several of our titles had been accepted for nationwide promotions in a certain large retailer of books. As you will know, publishers are expected to pay a 'promotional support fee' in order to get onto a promotion - in addition to bearing the cost of discounting their books. We reckoned we could afford the up-front payment and signed ourselves up.
The first snag was that the retailer wrote to us nearer the time and said that the price had gone up. In the case of several of our titles, it had almost doubled. We'd already printed the extra books by then and we reckoned we could still make money on the deal, so we agreed.
Now in some industries, that up-front payment is netted off against sales. That's to say, if you agreed to pay five thousand pounds to get your book on a promotion, the retailer deducts that five thousand pounds from your 'winnings'. But in our case we were expected to pay up in cash, rather than have the amount withheld from sales. Raising the price meant we were stretched very thin for cash, but we thought we had a strong line-up of titles. And of course paying in cash meant parting with the money many weeks before any sales would come in to cover that cost. Cashflow is always tricky when you're little, but we found a way to make it work.
The promotion began and we rushed out to stores to see how our books looked... and for the most part couldn't even find them. A couple of our promotions were fine; the rest were a shambles. So began several weeks of to-ing and fro-ing where we would visit a store and find no evidence of most of the promotions we were paying for. We would query it and be told that all was well in the stores we hadn't visited. So we'd visit more stores and see the same thing (or lack of it). Books that should have been on promotional space weren't. Books that were supposed to be stickered weren't. Books that were supposed to be face-out weren't. Stock was low when it ought to be high. We started to panic as Christmas got closer. And the messages we got back from the retailer insisted that 'compliance' was fine. In desperation we hired a third-party firm to document 'compliance' and they found some very troubling things. They visited thirty-seven stores around the country and in no case were all our promotions being run as agreed. Some titles were only where they were supposed to be in 20% of locations. One wasn't being promoted in any of the thirty-seven stores visited.
We made as much fuss as we could, but to no avail. Then the bill for running those promotions came due. We showed our evidence: that the overall compliance rate was 19% - and asked to be let off some or all of the 'promotional support' payment. No deal.
Our next step was tricky. We could take legal action and almost certainly win our case, but would we ever do business with that retailer again? That wasn't a risk we wanted to take. The retailer's representative was friendly enough and had some ideas about how to make the following year more mutually satisfactory, but was insistent that we should pay the full amount. We swallowed hard and handed over the cash.
So, to summarise: we printed extra books, paid what for us was a very large sum to have them on prime Christmas space, in most cases those books never got near that space, then they were shipped back to us and pulped (it being too costly to have our distributor sift through returned books looking for pristine copies).
The final irony was that the retailer concerned then went from listing pretty much every book we published to listing pretty much none of them. So there was probably no reason to put up with their Christmas extortion and no way to benefit from their plans for the future. That particular Christmas wiped out all of our profit for the year and a bit more besides. And the annoying thing is that I'm still not sure what we should have done differently, except psychically know in advance that we were going to get screwed. The only lesson we've managed to extract from the sorry tale is to take Christmas gingerly, at least until we've built up enough funds again so that being taken for a ride won't bankrupt us.
Just think of how poetic it would have been for Snowbooks, the frequently winter-themed publisher, to be destroyed by Christmas. But then if our survival had been seriously threatened, we would probably have got the lawyers involved and done our best to drag the matter into the press, which might have actually done the rest of the industry a favour. Apologies all round that it didn't come to that.