Monday, July 13, 2009

No! Yes! No!: The Schizophrenia of Sell-Through

In another post, I mentioned the concept of sell-through. Simply put, sell-through is a percentage representing the number of books an account sells relative to how many it bought (books sold/books bought from the publisher x 100). Logically, low sell-through is bad, decent sell-through is good, and perfect (100%) sell-through is great, right?


It's a little more complicated than that. For the national chains, 70% sell-through is generally regarded as the floor for "good sales." Much less than that and it's clear the publisher, rep, and buyer agreed on too high an initial order, and the publisher will then suffer substantial returns (more on those in a future post). 80% sell-through is very good. Once you get toward 90% and higher, however, the tide turns; as sell-through approaches 100%, it becomes clear that demand is outstripping supply, and it's likely that a lot of sales are lost to other retailers (other chains, independents, Amazon, &c) because the account is out of stock. In this case, the publisher, rep, and buyer agreed on too low an initial order.

(Keep in mind that for most debut authors, the majority of stores at a given account rarely have more than one or two copies on-hand at any time. There are about 500 Borders stores and about 700 B&N stores nationwide.)

Someone recently asked me why it's such a disaster for a book to have too low an initial. (Having too high an initial is clearly a problem—the publisher will have to take the books back.) Too low can be worse, however, due to missed sales; it takes a significant amount of time for frontlist reorders to be processed, shipped to an account's warehouses, distributed from the warehouses to the stores, unpacked at the stores, and displayed. Without a high enough initial, stores and warehouses will often be out of stock during this time, and while some customers will order the book for future pick-up, the vast majority will simply buy it elsewhere.

The sell-through game is a little different for on-line retailers like Amazon, for two main reasons:

1. Amazon doesn't need to order more copies than it plans to sell. The chains have to do this in order to have enough copies in-store to attract consumers' attention, especially if the book is in promotion. Have you ever noticed how those front-of-store tables always have thirty copies of the new Janet Evanovich, no matter how many copies the store sells?

2. Amazon's search function is designed to guide you to the hardcover edition of a book even if the mass market or trade paper is already on sale. Whereas the national chains will return any hardcover copies of a given title to the publisher by about a week before the trade paper or mass market edition goes on sale, Amazon hangs onto them because they know they can continue to sell them. (They also have great discounting, so even if consumers find both the hardcover and the trade paper/mass market, the price difference may be so insignificant that they opt for the hardcover anyway.)

For these reasons, Amazon's sell-through is terrifically efficient: over 90%.

So there you have it: sell-through needs to be good (hopefully at least 70%) but not too good (90%+, Amazon being an exception). There's no such thing as having sales that are too high, but it's very possible to have sell-through that is.


  1. Wow, your job sounds terrifically complicated. As a new author who didn't get any of that, I have to wonder what new headaches await on my next book. (Yes, I'm already planning on having a next book.)

    Thanks for doing this blog. I'm a follower from Nathan Bransford because of your guest blog. This is great:)

    Leona Bushman

  2. I first encountered the notion of a sell-through being too high via Tom Doherty 10 years ago. I was astonished. But once he explained it made perfect sense. Thanks for the reminder. And good luck with the blog.

  3. Great post! So glad you're blogging all this information to us.

  4. Love the blog! Can you set up with Feedblitz or Feedburner so I can get it via email and not an RSS feed? That would be great.

    Hope Clark

  5. I can see why the excessively high sell-through is bad for the bookseller. It still sounds like it would be good for the author.

  6. Hi Hope—

    Thanks! You should be able to subscribe to the blog via e-mail now (see links at right). Let me know if you have any trouble.

    Hi Janet—

    Yes and no. Excessive sell-through is bad for the publisher and the account, but it's not always great for the author if they suffer low initials across the board. Significant stock outages at B&N and Borders, for example—especially for a title not stocked by Costco/Wal-Mart/Sam's Club—could significantly stall early sales and artificially depress BookScan numbers, possibly negatively impacting the author's next book.

    For the most part, though, you're right: excessive sell-through is more the publisher/bookseller's problem, as the author is more than likely going to get sales at competitors' stores/websites and see royalty payments regardless.

  7. Thanks Eric. Very interesting (and I must admit, discouraging). But very good info. I've got the feed for your blog on my iGoogle, so I'll be a frequent reader.

  8. LOL! I guess I should have expected a complex answer.

  9. Eric, your post is great at explaining the unsustainable model that the big stores operate.

    Don't think the future belongs to a combination of
    - internet
    - print-to-order (so that every B&N, and every independent, has a printer in the basement and can always run-off another copy of anything when they need them)
    - e-books

    Then you'd never really have to size an initial order ever again.

  10. Great information, Eric. I especially appreciated hearing how and why amazon may treat their orders differently.

    Thanks for a great post and congrats on joining the blog world!

    Lori A. May

  11. Hi Eric,
    As a relatively new author on the scene, I have to tell you: THANK YOU for your blog. There are marvelous people at my publishing house, who are always willing to provide me with information, but sales is one area that has always been a little mystifying and I'm delighted to have this perspective. It makes things much clearer and makes me appreciate my publisher's sales people all the more: they got me excellent co-op for my debut with the house and until reading your post I had no idea how diligently they must have worked to acheive this.

    I've added you to my blog roll over at Historical Boys.

    Best, C.W. Gortner

  12. Hi C.W.—

    Happy to be of service!

  13. When I still had a day job, I used to work in health care, and this kind of reminds me of what they called the census in a hospital. Having only 85-90% of the beds occupied sounds bad, but it really isn't. Otherwise you have to start sticking the pregnant ladies on the cancer ward or something else that doesn't make sense - similar to customers going elsewhere.

    At least that seems an apt comparison to me right now, but I've only had one cup of coffee.