Distribution: The Most Misunderstood Topic in Book Publishing

What Small Press Distribution's demise teaches us about small press mindsets, book sales, and how publishers make and share profits

The recent closure of Small Press Distribution (SPD), according to Publishers Weekly, sent “shockwaves throughout the entire independent publishing community.” I’ve read other accounts, too, that this was an “earthquake moment” and that publishers have been left reeling. The Washington Post ended its coverage of this story with an email from an author that read: “I would characterize this as a nightmare.”

I’m not trying to assert that what happened is not a big deal, but the sensationalism of the coverage is causing some eye-rolling over here. Many of SPD’s client publishers have said they haven’t seen a statement in years, and that most (if not all) of their profits were eaten up by SPD’s fees. Since 2020, there’s been a slew of controversies and upset, and a successful GoFundMe campaign last year that raised $111,000 to start what SPD was calling SPD Next, to bring themselves into the already-arrived future. One year later, they’re out of business.

To put things into perspective, my imprints (She Writes Press and SparkPress) are changing distributors this year. In August we will be moving our inventory from our current distributor (Publishers Group West, part of Ingram Publisher Services) to Simon & Schuster. We are working to pare down inventory, both by shipping books back to authors and in some cases destroying excess. We started this journey with about 35,000 units needing to be moved, a number that S&S classified as “not very much.” SPD has 300,000 units across some 350 publishers. Pointing this out is not about the value of a given publisher’s list or volume of titles, but rather to open a conversation about what it means to be small and to consider the many forces at play (beyond distribution) that prevent books from breaking out in meaningful ways.

A quick primer on distribution for those not super familiar with how it works. Distribution is confusing in part because it’s a catch-all term (and service) that Ingram and Amazon both use (and offer) and which refers to their fulfillment business, which is what happens when a customer buys a book, and it gets fulfilled (either from stock in the warehouse or printed on demand) and shipped to customers. This is not the same as “traditional distribution” (whose distinction from “distribution” could be and is lost on many), which is when a distributor like SPD, or Publishers Group West, or Simon & Schuster fulfills orders, yes, but also, with the human power of a dedicated sales force, presells and sells books into the trade (meaning indie bookstores, as well as Amazon, B&N, and BAM), and to libraries and wholesalers and specialty markets (like REI, Papyrus, Urban Outfitters, etc.). Publishers pay a commission for this service, and also fees for things like warehousing, returns processing, and direct shipping.

She Writes Press and SparkPress are not small, but neither are they huge. Across both imprints, we publish about 120 titles per year. Pretty solid. We attribute around 35% of our sales to independent bookstores, which is massive compared to most small presses, whose sales to indie bookstores are maybe 2-5%.

SPD publisher clients are truly small (both in terms of volume and sales), many of them micro-publishers that publish under ten titles a year. Many are publishing niche books, poetry, and chapbooks—important works but also difficult to sell, especially to bookstores. Small publishers have different sets of expectations when it comes to sales potential because of their size and capacity. Many benefit from traditional distribution really only for the prospect of their books being orderable, and returnable, but from a financial standpoint, the actual business is a wash. This is why SPD had long relied on funding and grants to be sustainable.

What the demise of SPD should be showing us is that traditional distribution is not set up for small publishers because they don’t have the volume to justify the cost of it. SPD’s model was sustained in the 1970s and ’80s on idealism and people’s sense of civic and artistic duty, particularly in Berkeley, California, where it was founded and based. But now, money for the arts is harder to get than ever, and the orgs that do secure funding are usually way sexier and more of the current moment than distribution, the underappreciated and largely invisible workhorse of the publishing industry.

The problems small publishers face are vast, but let’s look at three of the biggest issues that SPD failed to solve for:

Mindset

Back 55 years ago when SPD got its start, Berkeley was a hotbed of book publishing. In a great essay contrasting what publishing was like in 1970s Berkeley versus now, Malcolm Margolin, founder of Heyday Books, wrote: “Today [2019] there seems to be a wide separation between those practicing book arts and those doing trade books for wider circulation, but in the 1970s these two camps mingled easily.” Fifty-five years gives folks time to adapt, but in book publishing people are not always so inclined. I came up in Berkeley publishing, and I know and knew these players who shaped the publishing landscape of that era—Malcolm himself, Jack Shoemaker (a cofounder of SPD), Charlie Winton (a cofounder of PGW), Richard Grossinger (my former boss at North Atlantic Books who was distributed by PGW and moved to PRH in the 2010s), Phil Wood (Ten Speed Press, which got acquired by PRH), and many others. There were women in this mix, btw, but the men (true to the era and true to publishing) were the suns around which the planets orbited. The Berkeley publishing mindset of the 1970s was singular and beautiful in many ways. These people did not set out to be celebrities or to make names for themselves per se, or even to strike it rich. The orientation to publishing was around books for their cultural merit and value, and if they reached more readers than expected, wonderful. The ecosystem supported itself because everyone supported each other. If there were halcyon days in book publishing, this was it (not accounting for the truly problematic and systemic -isms that have since become so widely unveiled and understood). The afterglow lasted a good many years because I caught its tail end in the early 2000s when I started at North Atlantic Books. By then, these guys were in their 60s, starting to wind down, and many of them wouldn’t be around to tackle the tsunami of change that was on the horizon. SPD’s demise can at least in part be traced to its origins, to a mindset rooted in a different era, which was exhibited in its inability or unwillingness to embrace the changes ushered in with the twenty-first century. SPD Next intended to invest in POD and ebook solutions in 2024, some twenty years behind the curve.

Bookstores

Small presses exist to find and publish and amplify books that, by and large, are not the kinds of books that bookstores are excited to carry. The presses distributed by SPD value the literary, the non-mainstream, the author who needs someone to take a chance on their work. And yes, these presses are at odds with our current culture that’s all about author platform, author celebrity and visibility, and which survives on what’s commercial and trending. On Facebook, my colleague and Stone Bridge Press Publisher Peter Goodman wrote, “Our industry has not figured out how to lead and is constantly letting the vendors control our destinies.” This statement is important. We are letting the vendors control our destinies. I love bookstores. My authors love bookstores. So when I say that most bookstores aren’t friendly to small presses, I don’t mean to criticize bookstores. Instead I mean to criticize the systems in which we’re all stuck. Bookstores have their hands tied, too. After all, they want and need to sell product, and the margins are stupid-thin. Bookstores can’t and won’t order books unless publishers (and in the case of self-publishing, authors) meet pretty extreme discounts of 50-55%. For a $20 book (which is more than your average trade paperback), this means that the publisher’s cut is $9-$10, which gets split up between the author and the publisher, who then pays its distribution commissions from its cut. Our split with our authors is 60/40, meaning of this hypothetical $10, authors get $6 and we take $4. Out of that $4 per unit comes the commission. As I said, stupid-thin margins. Bookstores don’t make it easy for smaller and indie publishers, so much so that presses feel that the only way into bookstores is to have distribution. I don’t begrudge the bookstores. They want and need good protocols for ordering and returning; they don’t want to overorder for events or to work directly with authors (for the most part). The smaller the bookstore, the less literal shelving capacity they have, and meanwhile there are more books than ever.

Money

Publishers are not supposed to talk about what we charge or will charge for books because antitrust laws require that each company establish its prices and other competitive terms on its own. The irony in book publishing, however, is that we establish our prices 100% based on the price points of our comp (competitive) titles, around which the entire sales segment of this industry is built. The result is that we squeeze ourselves and our authors so thin that everyone is upset and resentful. The other place where money comes into play is in the commissions and fees a distributor charges. That many SPD publisher clients were not seeing any profits from the distribution of their titles suggests a few possibilities: 1) the books were barely selling, and/or 2) their accounting systems were outdated and flawed and failing to track well enough what was coming and going; and/or 3) its commissions and fees were so high that they were eating into any possibility of profit. SPD has directed its publishers to consider Asterism Books as a distribution solution. They have been around only since 2023 and have the capacity to take on 100 new presses. One of its founders, Phil Bevis, told PW, “The only revenue we get is by selling books, and that is a flat 24%.” Publishers are not allowed to disclose the terms we have with our distributors, but 24% is neither a massive nor a small commission, and there have to be other fees if any direct shipping or warehousing is involved. Maybe they don’t charge returns-processing fees, but once they onboard 100 new presses, they’ll probably start to. Commissions, no matter how fair, eat away at publisher profits, and even more so for publishers with very little volume. Part of what justifies distribution for bigger publishing programs is volume. The more books you get out into the world, the more are likely to stick (and not come back). Amazon, for all its foibles, is the least likely of all accounts to return books. Indie bookstores are the most likely to return. (B&N was a terrible offender, but its new policies have made it so that they barely order anything from indie publishers, and therefore returns have gone down. Cause and effect in practice!) Publishers want to get wide placement in bookstores, but that doesn’t ensure they’re in the clear. Returns will happen at any time, and they can be devastating, and small presses are the least able to absorb those blows given the thin margins and small backlists.  

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And now for the solutions, lined up along the same themes:  

Rising up to meet the moment (mindset)

Small presses that are, by design, not meeting the current cultural demand for maximum commercial appeal and celebrity books should be celebrated and thanked for the work they’re doing, going against the grain and elevating voices that need to be heard. But the more edged out small presses get from traditional options, the more they need a movement like the one of the 1970s in Berkeley—to band together to support one another. The Independent Book Publishers Association offers important educational tools for publishers who feel like they don’t have options when it comes to distribution, and perhaps it’s poised to offer something more, like a support group, or an incubator for some kind of co-op of small presses. Small and indie presses have great strength in numbers, but publishers tend to operate in silos, not being particularly proactive or looking beyond their own programs at the broader community of publishing. Also, publishing people, by and large, are creatives who come to what they do for the love of books. One of the reasons that the fastest-growing segment of book publishing is service providers is because service providers are not nearly as invested in a given book’s quality or content as publishers are. For publishers, their books are an extension of their aesthetic, their values, their worldviews. Small and indie presses alike have a lot of untapped power to find and serve their readers directly or as part of cooperatives they may create. The demise of SPD will be a make-or-break moment for a lot of these presses, and I wonder who will rise up to meet this moment.  

Targeted retail relationships (bookstores)

Small presses don’t need most bookstores, that’s the truth. What they need is to identify those specific bookstores and other retailers with whom they have a strong alignment. The more literary, obscure, or niche a book or a list might be, the better chance publishers have to sell more quantity to a few stores rather than trying to sell 1s and 2s to bookstores that don’t have the inclination or the customer base to sell those titles. A great example of a press that’s been doing this for years is Microcosm. Publisher Joe Biel was on my podcast, Write-minded, last year speaking about breaking up with his distributor (by choice) and then opting out of selling to Amazon altogether. His is an inspiring model that gets far too little attention (unsurprisingly) from our broader industry. Since striking out on his own, Microcosm’s sales have increased dramatically. Yes, it means they have to do their own warehousing and fulfillment, but again, this is where small presses could get creative and band together to share some of the upfront costs that would result in dramatically better earnings on the back end.

Direct sales (money)

Many publishers are doing direct sales, and doing them well. Microcosm is one example, and others include Split Lip Press and Gloo Books. (I’m writing this from Japan and I’m very impressed that Gloo’s store is telling me how much their books cost in yen.) Publishers know they need to do direct sales and they resist it. I understand because we don’t do it either. One of the promises of distribution is fulfillment. We pay our distributor for the privilege of their warehouse space, and their fulfillment apparatus. We don’t have the womanpower, or at this moment the wherewithal, to go into the business of fulfilling orders. That said, it’s the wave of the future, and any one of us, big or small, can and should be leaning into direct sales as it supports publishers to build brand loyalty and a customer base (names and emails), do direct marketing, and to offer all kinds of sales and promos. Again, the moment is ripe for a small press co-op!

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Anne Trubek (Notes from a Small Press) wrote a helpful Substack post about SPD (among other things) this week. She and I are on the same page when it comes to the wider reaction to this news. She made me laugh when she wrote about the coverage of this topic, “Outrage culture over ‘loss of great literature!’ without an NPR-type disclosure really bugs me. There are systems at play here, and few are outside of it.”

What she means by this is that you can’t be outraged if you’re not buying indie or supporting indie presses, or if you order all your books from Amazon. I don’t order a lot of books from Amazon, but by making what I think are the best decisions for my presses, I’m propagating a system that is not supporting small presses. Our move to Simon & Schuster wasn’t a slam-dunk decision for me because it meant we’d be tethered to venture capital (with last year’s purchase of S&S by KKR). When I was struggling with whether or not to move, one of my publisher friends said to me, “Don’t let the anti-capitalists get in your head.” But my orientation to publishing, and to business more broadly, is such that they are in my head. I live in Berkeley! I am the kind of person who wants indie and small presses to thrive. Berkeley’s 1970s publishing ethos is alive and kicking around in my mind. The challenge is that I also understand that the only way forward is to adapt to where we are now, and Malcolm Margolis was right when he said that publishing for the trade and practicing book arts aren’t as symbiotic as they once were. Publishers hate change, and yet the sands are always shifting below. And so, publishers need to be brave and even sometimes compromising in our decision-making. We need to be open to options that we wouldn’t have considered in earlier iterations of our businesses. We need to find new ways that aren’t bound to how it’s always been. There is opportunity in the face of change, even when the change isn’t our choice. My hope for SPD’s publisher clients is that they find support among one another in the shared immediate struggle ahead, but then look past the horizon of how terrible all of this is and consider the ways in which seemingly unwelcome turns of events are oftentimes opportunities to do things differently and maybe even better.

Further Reading:

Publishers Weekly’s Small Press Distribution Clients Scramble to Find New Distributors
Anne Trubek’s SPD, Author's Equity, and Distribution
Ann Kjellberg’s Notebook: Unevenly Distributed
Jen Benka’s compilation of SPD publisher clients
My own What It Would Take to Disrupt the Publishing Industry