Wednesday, May 19, 2010

What is sellthrough?

By Joe Moore

Someone emailed me the other day and asked what sellthrough means in regard to publishing. Sellthrough is one of those buzzwords that helps a publisher evaluate their current and future relationship with a writer. It’s determined by the amount of books that were shipped and paid for, and it’s expressed as a percentage. For instance, let’s say a writer had a print run of 5000 books and the publisher shipped 4000 (orders). Of those, they received payment for 3500. The sellthrough would be 87.5% since 3500 is 87.5% of 4000. And a sellthrough that high would be a very good thing.

Now, the next question sent to me was: How important is sellthrough in the eyes of the publisher?

For that answer, I went to my friend Neil Nyren. Neil is senior vice president, publisher and editor in chief of G.P. Putnam’s Sons. Here’s his response:

“Sellthrough is important for a couple of reasons. Every book has returns, no matter how successful it is – that’s just the nature of the business. But returned books cost money. We’ve printed and shipped them, but they haven’t sold, and so now all we can hope to do is sell them as remainders. So the fewer books that come back, the better the potential profit picture, for both the publisher and the author.

“Sellthrough is also an important indication of the traction a writer is acquiring in the marketplace. If your sellthrough is 80%, that means the books are sticking and the accounts have a positive history with you (after all, for every five books they ordered, they sold four). And that means a publisher can use that as a springboard to get them to order more copies next time (“Look how well you did!”). It’s an indication that – even if the figures are still small – there may well be growth potential there. It’s a very positive sign – and we can use all the positive signs we can get!”

So for all the published authors out there, it’s easy to calculate your sellthrough. Check your statement and divide the number of books sold by the number shipped—some publishers even calculate the sellthrough for you and display it on the statement. In the above example, the answer is .875 or 87.5%. For those who aren’t published yet, when you finally do get your first statement, you’ll already know one number to watch for that can tell you and the publisher a great deal about how you’re doing.

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8 comments:

  1. It's a very, very important number. Just from a bemused, philosophical point of view, I also think it's worth reminding all writers that if your book has a really shitty sell-through, this means that you, the author, and your book, failed; it DOES NOT mean that the publisher miscalculated the appropriate size of your print run, failed to market the book, or did not send out ARCs; it DOES NOT mean that bookstores, for whatever reason, ordered more copies than they could reasonably sell. It means YOU SCREWED UP.

    Yes, yes, I know. But YOU CHOSE TO BE INVOLVED IN PUBLISHING. Nobody forced you to write the damned things and get them published, right? Your choice.

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  2. I wonder, with the invention of Print on Demands and such, if publishers are printing fewer copies initially to see if the first run sells. Has anyone head of a publisher doing this?
    Pros? Cons?

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  3. Victoria,

    Across the board, publishers are becoming far more circumspect about large print runs. I think that the shortened production cycle has a lot to do with it, but I think that increased sales intelligence is the key factor. When I sold my first book in 1996, we had to wait for three months to have any real idea how well the book actually sold (that was when returns would start). Based on preorders, publishers would print tens of thousands--or even hundreds of thousands--of books, essentially as a roll of the dice. The industry was often crippled by massive unexpected returns.

    Nowadays, thanks to BookScan, publishers know pretty much real-time how well a book is doing. If sales are brisk, they can order another print run. If sales are strong in one region of the country and weak elsewhere, they can manage their warehousing and distribution accordingly. Throw in the improved printing technology that allows a quick turnaround on new print runs, and the need for massive first printings has pretty much gone away.

    Your post, however, specifically mentions "print on demand," which I believe is an advance form of self-publishing. If I'm correct, then POD per se would probably have very little impact on the strategies of the traditional publishing business.

    John
    www.johngilstrap.com

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  4. I'm curious if publishers are now including electronic sales on authors' statements.

    If a reader purchases your book for download to their Kindle or Ipad, there is no chance of it ending up a remainder. And the publisher doesn't lose money on priting, storing and shipping.

    It appears to be a good deal for all parties.

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  5. Thanks John, That makes sense. How great would it be for an author to say their book is on the 10th or 20th printing!

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  6. Re: Victoria 12:12 PM

    I'm confused.

    While that might be great for an author, wouldn't that also be equally bad for a publisher? To know that they so misjudged a book over and over as to require another 10-20 printings to fill orders?

    Or would that be a good thing because they're selling books and making money?

    Or maybe both? ;)

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  7. Actually, Daniel, that kind of poor planning makes everybody happy. That kind of rush for additional printing means that the book is a hit via word-of-mouth, which is the singular greatest way to grow readership. It also mean that the publisher will make more money than they'd anticipated, and that the author will earn out his advance and start earning royalties.

    In fact, if anyone would feel a little screwed through Victoria's scenario, it would be the author and his agent, who clearly would have under-bid the advance. On the other hand, the sell through would make that easy to correct during the next negotiation.

    John
    http://www.johngilstrap.com

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  8. Print On Demand isn't necessarily self-publishing, although it tends to be referred to that way. POD is a technology. That it's primarily used by iUniverse and others, yes, but POD is supposed to technically refer to the technology.

    When it first came out there was some thought that publishers would shift to it because it would downsize warehousing; or that more booksellers would invest in technology such as the Expresso, which is an in-store POD technology, but the costs of the equipment ($100,000) made it out of reach of many bookstores and never seemed to catch on outside of self-publishing groups like iUniverse that basically exist through a business model of publishing huge amounts of books that sell very, very few individual copies, i.e., 1,000,000 books, each of which sells about 100 copies (those aren't real numbers, although the proportions are probably accurate).

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