Sourcing Directly from Publishers—5 Ways to Source New Books (4)

Separate Volume: The Complete Guide to Sourcing Books 2 (4)

What is Direct Trading?

The fourth way to source new books is to source them directly from the publisher, without going through a distributor or bookstore—in other words, to engage in direct trading.

The method is simple: just call the publisher's main office and express your interest in direct trading. Unless that publisher does not engage in it at all, you will usually be connected to the person in charge, as more publishers are becoming flexible in their approach. Of course, the terms are a case-by-case matter. For small transactions, the terms are often set by the publisher, such as a 80% wholesale rate (hachigake) on a non-returnable basis. From the publisher's perspective, they could make a profit at a lower wholesale rate, but since that would be cheaper than the rate at which books enter bookstores via distributors, conservative publishers in particular seem to consider this out of respect for other general bookstores. However, you can certainly negotiate.

While it takes time and effort to trade with each publisher individually, direct trading is the most rational method if you can select the books you want to handle yourself and if you can consolidate a certain volume, such as several tens of thousands of yen or more at wholesale prices, for that publisher's books alone.

Another method is to open an account with a small-to-medium-sized distributor and combine that with direct trading. By using direct trading for publishers that the small-to-medium distributor does not handle directly, or where direct trading offers better terms, and by using each appropriately, you can source products from more publishers at a fair price.

Direct Trading Publishers and Little Presses

Sometimes, a publisher's primary method of distribution is direct trading. Naturally, it is easier to source books from such publishers. Well-known examples include Discover 21, Nagaoka Shoten, Mishimasha, and Transview. Because they trade with many bookstores, basic terms such as whether it is on consignment or non-returnable, the wholesale rate, and who bears the shipping costs are already established. These should be available on their websites or provided upon inquiry.

In recent years, there has also been an increase in high-quality publications that are not part of the mainstream publishing distribution system, such as little presses published by individuals, or what are called ZINES or fanzines. More bookstores are starting to handle these because they can expect sales if the items are high-quality or popular, and because they can create a unique selection since other bookstores rarely carry them. These books often do not even have an ISBN, so in principle, they must be sourced through direct trading with the creator.

Since there is no comprehensive list of these products that are not in the distribution system, bookstores have no choice but to find them on their own. If you go to other bookstores that actively handle such books and find one that interests you, first buy it and take it home. Somewhere in it, the publisher's address or contact information should be listed. Alternatively, they often have a website or social media, so you can contact them from there and express your interest in handling their books.

The terms vary; sometimes the creator has them clearly defined, and other times the seller proposes the desired terms. It is strictly an individual transaction. As a guideline, 60-70% of the retail price for non-returnable purchases and 70-80% for consignment is the most common pattern. The most frequent arrangement is for the creator to bear the shipping costs when sending, and the seller to bear the costs when returning. Since it is a one-on-one relationship, if the creator and seller are in the same neighborhood, they may sometimes hand-deliver the books. Basically, since there are no general distribution rules, it is important to clearly agree on things from the start, including the timing of settlement in the case of consignment.

Transview Trading Agency

Transview, one of the publishers that focuses on direct trading, has a system called a trading agency. Initially, they opened direct accounts with many bookstores to wholesale their own books, but later they began acting as an agent for direct trading between other publishers and bookstores. Books from publishers that use this system have a 'Trading Agency TRANSVIEW' mark or a sticker on them.

Products handled by Transview are on consignment, with a wholesale rate of 68-70%, and free shipping even for a single book, which are good terms for bookstores. Also, it is speedy, with books arriving within one to four days after ordering. All information is disclosed on their website, and you can open an account immediately just by inquiring and exchanging a simple memorandum. For bookstores that primarily trade with large distributors and do not want to increase their number of direct trading accounts, books can also be sourced from various distributors via the small-to-medium distributor Yagi Shoten. However, in that case, it is non-returnable. The system is designed to encourage direct trading as much as possible.

That said, Transview is not a publisher that releases many books every month like the major ones. From a bookstore's perspective, if they were to trade directly with each publisher individually to source a small number of books from a limited variety, the effort would increase. Therefore, Transview thought to make the monthly product offerings more substantial for bookstores by handling products from multiple publishers under the same trading account. That is the Transview Trading Agency.

At the time of writing this book, more than 50 publishers are participating. It is a system that puts the bookstore's profit first, and the number of publishers who agree with and participate in it is gradually increasing. Many of these publishers, even if small in scale, have the spirit of wanting to create good books. The system is set up so that each publisher and Transview share warehouses and promotional activities, which Transview coordinates, and each publisher pays the actual costs to Transview.

If you want to know more about Transview, there is a book titled 'Selling Books Straight: The Radical Method of Publishing Direct Trading' (written by Takeshi Ishibashi, published by Kurado).

Combining to Create a Retail-like Form

As described, you can source a diverse range of books directly without going through distributors or bookstores. It takes effort, but the thrill is that it is easy to build a relationship where you can see the faces of the creators and their representatives.

From the perspective of other industries, the existence of large distributors is actually quite unique. Of course, in the current situation, if you want to sell a substantial number of diverse books, it is better to be able to contract with a large distributor. On the other hand, a form where you open accounts with multiple distributors and also actively engage in direct trading—that is, a form where you deal with several wholesalers and manufacturers individually—can be said to be closer to the original form of retail.

However, the gross profit margin for books as a product is low to begin with. As mentioned earlier, this is because the vast majority of books in general circulation have their list prices and wholesale rates determined based on distribution through major wholesalers. This has become the standard, and a sense of pricing—that 'a book like this should cost about this much'—has permeated among readers. Some believe that this price point is too low for the product. This often leads to the argument that in order for the publishing industry to survive, it is necessary to increase the gross profit margins of bookstores, and to achieve that, the list prices of books must be raised relatively.

If you are starting a bookstore from now on, it is better to actively engage in various transactions, if possible, without relying on a single business partner or becoming accustomed to fixed conditions. Doing so will likely build the strength to be a retailer in the true sense of the word, one that is resilient to change and, as a result, can continue for a long time.

*Reprinted from 'A Reader for Future Bookstores,' pp. 142-146