Sell-Throughs Aren’t Everything, or
Everything You Ever Wanted To Know About Sell-Throughs, But Were Afraid To Ask
I always find it interesting to listen to writers talking about the business of writing. Part of the fun is that any such discussion is likely to wind down into metaphysics or ratchet up into verbal battle before it’s over. Even the simplest issues, issues that are basic to the industry, can ignite a firestorm, because there are no clear answers, no absolutes to be found in publishing.
Nowhere is that more evident than in what should be the cut-and-dried subject of sell-throughs. A sell-through, as virtually every writer knows, is nothing more than a mathematical formula indicating percentage of books sold. Or, in terms my various math teachers would have reduced it to:
Sell-through percent = Copies of book sold X 100
Copies of book printed
It sounds straightforward, doesn’t it? There shouldn’t be any question as to what a sell through is or what it means. And it should mean the same thing in every case, right? A high sell-through is good, and a higher sell-through is better, right?
Like everything else in publishing, sell-through numbers are open to interpretation. While a high sell-through will only rarely hurt a writer’s career, and a low one frequently can, the interpretation of sell-through figures is an art, not a science. There are actually times in a writer’s career where a low sell-through can be a sign of publisher commitment, and times where a high sell-through means that the publisher goofed up. We’ll get to that later.
So keeping in mind that we’re dealing in an art form, not a science, and that everything here is opinion (my opinion) rather than fact, here are some of the nuances of sell-through analysis I’ve picked up in my twenty years in the book business.
First off, let’s deal with the fact that even the formula itself isn’t as ironclad as any of us would like to think, and start with a primer on how the numbers are arrived at. Some publishers compute sell-throughs using the number of copies shipped from their warehouse, rather than total copies printed, as the divisor. This can change the sell-through number substantially. All publishers compute their sell-throughs based on stripped covers or unsold copies returned to them by their various accounts, rather than on actual copies sold. Typically, the following formula is used by publishers is:
Sell-through percent = Books shipped – Books returned X 100
Copies of book printed
As a result of this, the information takes at least eighteen months to accumulate—the same amount of time it takes the majority of covers to land in publishers’ warehouses. Any figure you get from a publisher earlier than a year from the publication date of the book is a guess, not a real sell-through. They’ve got enough experience to guess well, but surprises are a part of the business and always have been. Also, the publishers’ reliance on stripped covers or whole copy returns as sales indicators means theft, misshipments, and losses due to the sort of thing insurance companies call an act of God count as sales—usually only a small percentage of total sales, but in some rare cases that percentage can be substantial. In the eighties a book on graffiti art “sold” well enough to trigger a sequel. It was only when the publisher was presenting the sequel to accounts that they discovered that virtually the entire print run of the first book had been shoplifted, incurring large losses for the booksellers, and making the stores resistant to ordering the new volume. In another case, a flood at a major warehouse destroyed several month’s worth of accumulated stripped covers and artificially boosted publisher sell-throughs of mass market books across the board for the period. In the early nineties a major national account changed its return systems and, in the process, lost about six months worth of stripped covers forever, raising sell-throughs for that period substantially. There was also a case of a wholesaler who forged stripped covers and returned them, artificially depressing sell-throughs for a while. Sell-through figures, while they’re the best indicators we have for what works in the marketplace, aren’t always foolproof.
Retail sales information is generally more reliable than publisher sales figures, though publishers generally don’t pay too much attention to retail sales numbers in the short term except on major bestsellers. Retail bookstores get their sales figures from cash register sales, so they have a day-by-day, week-by-week, store-by-store tally of how many copies of a given title they’ve actually sold. Overall sell-throughs still take time to accumulate, and are only final when the retailer pulls the book off the shelves. In most cases, it takes at several months for a retail establishment to accumulate the sales to compute the final sell-through for a particular title. (This is not true for series romance titles. For those books, two to four weeks is sufficient to get a solid sell-through. But it still takes months for bookstores and wholesale accounts to get the covers to the publishers, so series romance publishers are as much in the dark about sell-throughs as any other publisher until significant time passes.)
The sell-through numbers in bookstores can be computed many different ways. Retailers can compute sell-throughs based on initial orders of a given title only, or upon total orders, including all reorders. Typically retailers compute sell-through this way:
Sell-through percent = Books purchased by consumers X 100
Books ordered by retailer
Many retailers, who are interested in comparing apples to apples, so to speak, keep a data base of all titles, with sell-throughs computed at some given period—usually eight or twelve weeks—during the book’s life. This database enables them to see if a given book is performing particularly well or particularly badly against others of its kind at exactly the same moment in its lifespan. If a writer can get a sell-through at all from a retailer, that’s generally the number given, and it tends to be lower than the full life-of-the-book sell-through. So even the numbers we think of as so reliable aren’t set in stone. They can change depending on who’s putting the calculations together and why.
In wholesale accounts—non-traditional book vendors like grocery stores, department stores, airport bookstores, and so on—there’s a revolution going on in sell-through analysis. Up until the present, books were not sold in a manner that could generate title-by-title, store-by-store sales information. Wholesale sales and sell-through figures were computed just as publisher figures were—by counting stripped covers at the central warehouse after the racks were changed out. Wholesalers were as out of the loop on what they sold and where they sold it as publishers were. Because the data bases in grocery store computers are limited in the information they can hold, and because book titles change a lot faster than varieties of soup, books sold in wholesale outlets have traditionally been rung up by price points–$5.99, $6.99, $7.99, and so on, instead of by title. (This, by the way, is why book prices are standardized. Wholesalers pile on the pressure for publishers to keep book prices limited to maybe 10 to 20 basic price points across all of publishing.) But as the consolidation of wholesalers has reduced the number of major players in the business from a thousand to about ten, those few remaining wholesalers are interested in streamlining their business. Return rates from wholesalers have always been high, largely due to the very lack of solid information they suffer from because stores don’t have title-by-title databases. Several of the major wholesalers are in the process of putting in title-by-title, store-by-store data banks. This is going to be good news for everybody—it’ll mean that the accounts will order based on what their stores actually sell versus what they think they sell. The two can be wildly different.
By the way, don’t think too badly of wholesalers’ past lack of knowledge. It is traditional in publishing. Entirely too many decisions in the industry to date have been made based on partial information, or on information which everybody “knows” and which nobody has bothered to actually analyze, simply because the technology and practices of the industry have not, in the past, provided good information to analyze. This is changing. Thanks to increasing computerization, the major players in the industry are getting much better data. With any luck, this will mean improved ordering.
That brings us to the next phase of this primer on sell-throughs: analysis. You’ve got a sell-through number. What does it mean?
Well, it means different things at different stages in a writer’s career.
In general, conventional wisdom is right. High sell-through is good.
So what’s a high sell-through?
Average overall sell-throughs in mass market tend to be about 40% in wholesale markets (which account for about half of all paperbacks sold—though these days only top titles are distributed through wholesalers), about 65% at bookstores, and about 75% at places that supply bookstores—firms like Ingrams or Baker and Taylor. (For what it’s worth, both firms provide original order information and in-stock information to bookstores. If you’re on good terms with a store manager, you can get their preliminary order information, reorder information, and in-stock quantities, and come up with your sell-through at either firm. Neat, huh?) Average all bookselling venues together, and you get about a 65% overall sell-through for a typical mass market paperback. That number is the estimate that most publishers use to generate P & L’s—the profit and loss statements with their break-even percentages that determine whether or not an editor can bid on a book, and the amount of money that the editor is allowed to offer for it. Hardcover and trade paperback sell-throughs tend to run higher. Average sell-through is more like 75% for trade editions. If you can beat those numbers, you’re doing well in the marketplace.
But sell-through isn’t always everything.
There are points in an author’s career where a low sell-through is at least understandable and expected, and points where it’s least likely to hurt the author’s career, as well as points where a high sell-through is a disaster. So let’s talk about sell-throughs as they can impact an author, about how list position, current events, or natural disasters can impact the numbers, about why sell-throughs matter, and about what it all really means.
Typical new authors and authors who haven’t broken out of midlist have the most to gain from high sell-throughs. To begin with, the print runs we’re talking about are small. The books are sold in low quantities to the various locations, and generally displayed spine out or, at best, in a single faced-out pocket somewhere at ankle level in any given location. Because the books aren’t terribly visible compared to, say, that nine pocket cardboard display with the three-D iridescent header holding the newest Nora Roberts book standing next to the front door of the store (And you bought a copy, didn’t you, the minute it caught your eye? So did I.), and because the base of readers who know to look for the book as it comes out is much smaller than for a bestselling author, sell-throughs for midlist titles tend to be lower than average. Much lower than average, in fact. Thirty percent sell-throughs are common. Numbers in single digits aren’t unheard of. (When you’re a mid-list author, it never hurts to make every one of your relatives and all of your friends buy your book.)
At this point in an author’s career, the only thing that will distinguish her from the pack of all the authors in the same position, at least as far as the publisher is concerned, is high sell-through. There aren’t enough copies out there to make any bestseller lists, even genre ones. Even if a given store sells out, that empty five copy faced-out pocket isn’t likely to register on the store employees. Because success at this level is below the radar on a store-by-store basis, the only place it’s likely to pay off at is the publisher. Publisher wisdom is that a high sell-through for a midlist author means the book had good word of mouth among readers, and the author might be worth a shot at the big time. Getting a sell-through number of over fifty percent—especially through a couple of consecutive midlist books—is usually good enough to get that next book contract out of the publisher, maybe to get a perk or two like advertising or a giveaway or a stepback cover, things that represent the next step up in midlist—becoming an author the publisher is trying to build. Getting sell-throughs of sixty percent or higher can pique the publishers’ interest enough to put an author on the fast track, maybe even to spark a bidding war with a rival publisher when contract time comes up. But somebody has to notice the high sell-through and point it out to the powers that be. These are low-level successes—and the higher-ups at the major houses are unlikely to notice unless an editor or a sales rep champions the author’s cause. This is part of why some editors have developed a reputation for building writers—they keep their eyes on their authors’ sales, and make sure everybody knows when success breaks out.
So let’s say an author has gotten high sell-throughs for her last couple of books, and is ready for that next big push. The publisher is going to try to build her to the next level. Whether that next level is from midlist to B-lead, or from B-lead to A-lead, or from A-lead to New York Times bestseller, believe it or not, this is exactly when the bottom is likely to fall out of an author’s sell-throughs. And there’s a good reason for it. When a publisher pushes an author, it usually means a radical increase in the number of copies distributed from one book to the next. The publisher is sinking money into printing lots of copies, sinking money into structuring favorable deals to get retailers to take those extra copies, and doing it knowing returns are likely to be high. What the publisher wants is to make the author more visible in the marketplace. Store employees, when faced with a big pile of a single title, will usually display the books prettily somewhere where they’re likely to sell. It’s one of the laws of retail. And if the book is visible and interesting to readers, maybe enough people will buy it to get a nice buzz going, maybe it’ll start making some lists, maybe even become a bona fide bestseller.
If a publisher can sell forty percent of a title they’re forcing out in big numbers, they’re generally ecstatic, especially where fiction is concerned. It means they’ve successfully moved the author to the next level. Though the lower sell-through isn’t great, it’s enough to justify the risks. The next book by that author will be sold in at the higher level, and they’ve got a new bright light to decorate their publishing pantheon.
After the publisher has successfully established a writer at a higher place in the list, the company has two choices.
They can try to keep pushing, which will keep the sell-throughs low but will hopefully raise the overall number of books sold with each succeeding title by that author, or they can publish conservatively for a few books, and see if they can get sell-throughs back up before making the next push. Both approaches have advantages, so the decision will depend on how much momentum they feel they gained by the push, how loyal they feel consumers will be in the future to this author, what the company cash flow looks like when the decision is being made, what competing books are likely to be published at the same time as the author’s next title, and a hundred other things, including corporate politics, that the author will likely never know about.
Either decision is a good one in most situations. But when an author with building sales, especially when that author is verging on bestsellerdom, gets an exceptionally high sell-through on a title, it means the publisher guessed wrong. They underestimated the success of their marketing, and most likely lost sales, momentum, and position on the bestseller lists because of it. This is because bestseller lists are week-by-week comparisons, not absolutes. A book that sells, say, 5,000 paperback copies per week in a national chain, is likely to make the low end of that chain’s bestseller list. 10,000 copies per week would put it much nearer the top of the list in most chains. And a book that sells 2,000 copies won’t make the list at all. So if that author’s title sold 2,000 or 5,000 copies, but could have sold 10,000 copies that week if more locations were in stock, the author lost a shot at the big time. Repeat that nationally at all the major outlets, and the chance for a high position on the national lists like Publishers Weekly and the New York Times can be dramatically affected without losing a single book sale for the author. Out of stock positions in too many locations mean that a large percentage of an author’s book sales are delayed, moved out over, say, a six week period instead of concentrated into a two week period. And a crucial chance to enter the ranks of America’s bestselling authors can be lost because of high sell-through.
Another sort of disaster can impact sell-throughs without affecting bestseller list performance. Anything that keeps shoppers out of stores en mass over a period of time will destroy everyone’s sell-throughs. This is good information to remind your publisher of if it happens to you. Examples include things like 9/11, Desert Storm, the Iran hostage crisis, Princess Diana’s death, or persistent patterns of really bad weather nationwide. During 9/11, Desert Storm, the hostage crisis, and the weeks after Diana’s death, everybody was glued to their televisions and nobody, judging by national cash register receipts, bothered to do more than subsistence shopping. The same thing happened in the winter of ’93, when the entire East Coast got snowed in for nearly four months, while the West Coast was dealing with snow, earthquakes, mud slides, and Santa Anas. These events killed sell-throughs on virtually every book brought out in the respective time periods.
The moral to all of this is that sell-through numbers are subjective tools. They can be very useful in judging market performance, but they aren’t ironclad indicators of success or talent. They’re relative, and you have to take into account the total retail environment before they become meaningful. In addition, don’t panic when you get a low sell-through. Look at your particular situation and see if there might be a good reason for it. Besides market forces, anything from a ghastly cover to bad weather might be at fault.
Finally, remember that talent and dedication count for something in the end. Particularly in the early days of a fine writer’s career, publishers will often choose to ignore low sell-throughs and keep pushing, because they know just how hard it is to become established as a bestselling author. Heck, they can do it for the whole of a writer’s career—I can’t think of a single other reason that certain literary authors remain sought after and well-paid. So keep writing and working hard to improve your stories. Success isn’t all in the marketplace. Sometimes it’s in that perfect page, that book that sings out of you, whether anybody reads it but you.