POD vs. Distributors

[Ken]

Hey Everybody,

I'm (hopefully) a few months short of publishing my first rpg (a superhero game). The Forge has been an incredible resource and has allowed me to focus my research in regards to publishing a printed book. From what I am reading, it seems that POD is a great way to get your product out to the consumer without having the overhead of warehousing and shipping your merch, but that it may not be the best way to get your book distributed (short of online bookstores) and into gamestore marketplace.

Personally, I spend most of my money online and totally appreciate the internet route of publishing. There are still plenty of people (some of which may be my potential customers) who don',t and only get exposed to new rpgs at their local gamestore or comic shop.

Are there any POD outfits that do work well with distributors (Diamond, Alliance, etc.)?

I have also thought of splitting the difference and printing a short run for order fulfillment purposes as well as having a POD outlet. To do this, it sounds like I would have to buy an ISBN or use a POD service who provides them, just to get a distributor to take my line seriously. Has anyone else had luck going this way? Does one route of publishing overshadow the other enough to make splitting my resources not worth trying?

Thanks,

Ken

[TonyLB]

Well, POD looks pretty much of a losing proposition to me, relative to running a short print run.  Take a 160 page, perfect bound book, b&w pages, color cover, which you want to sell for $20. 

Lulu makes the original cost of the book somewhere near eight dollars (which I don't think includes postage, but maybe I'm wrong) and then takes 20% of your profits on top of that.  So you get 80% of $12 ... $9.60 per book. 

A rock-solid short-run press will get you that product for under $5 a book, and if you're willing to sacrifice service and certainty you can go more fly-by-night and get that price driven down even further.  I wouldn't, but people do.  Let's say they do $5.  They take zero percent of your profit, of course, so you get $15 per book.

The warehousing costs on 100 books are ... well ... you've got a box in your closet.

So what remains is the service Lulu provides of creating a web page, directing customers to it, accepting their money and then shipping a book to the right address.  That's called fulfillment, and it's a job.  Yeah, not everybody wants to do that themselves.  But do you want to do it more if you hear that you get almost $6 of extra profit for each package you drop off at the post office?  Or, alternately, can you find someone else who'd be happy to do it for you for less than $6 a book?  Because if you can then you can close the loop, write Lulu out of the middle, and get the exact same experience for you (i.e. checks come your way) with more profit.

Distribution ... urgh.  That's a bigger subject.  You think Lulu wants a big chunk of your money?  To my eyes the numbers of distribution look a whole lot worse, and the business model a whole lot shakier.  I don't particularly want to pin my business model on the idea that game-store owners world-wide are savvy businessmen generating a huge revenue stream for anyone who gets involved with them.  They seem mostly to be passionate amateurs ranging from "barely staying afloat" to "throwing money down the drain."

But that's me.  Why do you find distribution so attractive?

[Clyde L. Rhoer]

Hi Ken,

Tony has made a case for doing it yourself. The advantage of something like Lulu is there is no risk. You design the game layout, the book, and Lulu takes care of everything else. You don't have to fill orders, you don't have to go to the Post Office, and most importantly you don't have to risk any money. Both sides have their merits and you can do both.

If you want to get some perspective on numbers and sales via different methods check out Clinton Nixon's weblog. Scroll down to the post titled Q4 Anvilwerks stats.

[Ron Edwards]

Hello,

I'm seeing some confusion in this thread which needs to be fixed, fast.

DISTRIBUTION is a highly specific term in RPG publishing. It means selling your book to a middleman ("distributor") for about 40% of cover price, ultimately so the books will be bought by retailers and sold in their stores. A good example of a distributor is Alliance.

Don't mix it up with FULFILLMENT, which refers to the physical process of packing books and shipping them to people, whether customers or distributors or retailers or whoever. Fulfillment comes in two basic forms, if you're not using distribution (above).

- You keep the books, handle internet and other orders, and ship the books yourself.

- You contract with a company which warehouses the books, processes orders, and ships them, periodically sending you the customers' money less shipping and other costs. This is a fulfillment house, but it is not a distributor. Good examples of fulfillment houses include Indie Press Revolution and Key 20. (Both of them will also handle orders from retailers - an important point.)

It is widely believed that you cannot see your books in stores unless you are using a distributor, but this is not entirely true. For one thing, a retailer may be willing to deal directly with you as publisher, or your fulfillment house (if you use one). For another, as with my game Sorcerer, my fulfillment house serves distributors as clients as well.

I'm also seeing a terrible confusion that sets up print-on-demand (POD) as some kind of alternative to distribution. In some ways it is, and in some ways it isn't.

- Print-on-demand in its most extreme form means that a book is printed only after a customer orders it. Printing and mailing is in response to the order. This may appear entirely incompatible with using a distributor to get into stores

- However, short runs from POD companies (such as Tony does with Capes, Paul does with My Life with Master, and I do with Elfs) are also called POD, because they use very different technology from traditional printing and print "on demand" from the publisher as client, at significantly lower prices than traditional printing.

In the latter case, especially, one can get one's books into distribution (and hence into stores) just as anyone else does. POD is a means of making a book, and distribution is an institution concerning stores' access to the book. Choices about the former don't dictate anything about the latter.

Can I get some confirmation that you guys are understanding this? This thread is an abomination so far, because people aren't using the terms carefully.

Best,
Ron

[TonyLB]

I don't do POD.  I do short-run printing.  If you want to call what I do "print on demand" aren't you pretty much calling everything print on demand?  The client demands a print run and the printer produces one, whether they use movable lead type or a digital press.  I see the marketing cachet to printers of using the buzzword (as many do) but I don't see how it can help in our discussion here.

To my mind, Print On Demand is the idea that you print the books when there is ... well ... demand in the marketplace:  i.e. when a customer says "I would like to purchase this book."  That's how I've been using the term.  I hope that helps anyone who was confused about what I was saying.

[Ron Edwards]

Hiya,

Tony, I can't help it; what I'm saying is how the terms are used. It doesn't mean much to bring up personal, internalized, or "most sensible to me" definitions.

At present, the term "print on demand" is associated with two distinct things: printing on customer demand (the literal definition), and printing using digital technology. Since the two are currently married into the same companies, the term gets used for both. The latter thing makes short-run printing financially possible, which is serious business in the print industry as you know, and thus captures the attention of the people using the term.

To you or me, sure, it seems odd to call my order for 100 more copies of Elfs to be "print on demand" because I'm a publisher rather than an end-use customer, but to the printer-world, it means plenty. It means I can pay $1.02 a copy whether it's an order for 100 or for 1,000 or for 10,000.

The goal of this thread, as I see it, is to help our new member at the Forge. Let's not get wrapped up in beefs about the terms, but isolate the actual variables of interest so he can make the best possible decision.

1. Printing technology: traditional print vs. digital print

2. Customer-order driven printing or "run" printing (i.e. X number of books)

3. Fulfillment house or no fulfillment house

4. Marketing to distribution or not marketing to distribution

That's a whole lotta variables, some independent and some not. And it doesn't even count PDF copies of any kind, or take into account the role of bidding.

Ken, are you getting a clearer idea of the issues at hand? Or is it murkier than ever?

Best,
Ron

[Ken]

Hey,

Ron, thanks for the clarification. I'm nottotally lost yet. You definitely filled in a couple of blanks I had about the subject. I've given some thought to my publishing plans, using the four questions from your last post as a guideline, and here is what I've got:

1. Printing Technology: Digital. Ron, correct me if I'm wrong, but this is the other form of "print on demand" you were talking about where a printer will use methods other than those used in standard printing to produce a cheaper run of print books for ME. This choice is contingent on how well digital printing handles artwork. My book is pretty art heavy and printing would be a waste if my stuff didn't come out looking right.

2. Customer driven or run printing: Both. Having an online sales presence through Lulu (for example) has little to no overhead, so not using it as an outlet for my game seems like robbing myself of potential profit. It also seems that having a stash of books on hand is a good idea, too. I have about a dozen gaming and comic shops (that carry rpgs) in my immediate area (twice that within a two hour drive) and I will definitely be making the rounds to get my book on everyone's shelves. Also, I'll need stock for distribution...ack, I'm jumping the gun.

3. Fulfillment House, or not: Yes. I hadn't given a lot of thought about this until it was brought up on this thread. They sound like another middle man between me and the distributor (who is a middle man between me and the retailers). While using them shrinks my profit margin, I'm assuming that a fulfillment house will improve my chances of getting picked up by various rpg distributors and increase potential sales overall. Plus warehousing and shipping for me sounds great. I hate mailing stuff.

To reduce cost, I'm assuming that a run of POD (for ME) books (which would be cheaper) would go to the fulfillment house, and they would manage my stock. If this is correct, then it sounds like a good combo.

4. Marketing to distribution, or not: I'm going to admit I don't fully understand what you mean. If you mean pushing my stuff on distributors for them to carry, then yes. I'm guessing that using a fulfillment house will open most distributor doors. If not, then I would definitely do some marketing to get picked up.

Because you brought it up: I don't have immediate plans for selling as a PDF, though I'm not ruling this out. I  may use it is as a support tool for supplemental products, but that is definitely a future concern.

Let me know what you think, and if I'm not getting something right.

Thanks,

Ken

[Ken]

Hey again,

Tony, you had asked me why I found distribution attractive, and I wanted to give that some time. First of all, you're right: doing printing and mailing merch myself gives me more mony. However, getting my line picked up by a Distributor hopefully opens up doors to shops in parts of the country that I don't even know exist. While I have no problem hitting the streets around here and getting my local shop owners to carry my game, getting too far away from home on my own seems prohibitive. I can keep myself pretty busy around my region (southeastern Virginia) doing demos and support work for my game, but (I think) it stands to reason that the opportunity to sell to more shops, even if I make less per unit, nets me more profit overall.

I could do research and generate a list of rpg and comic shops and then market directly to them, but I wouldn't have the relationship that I enjoy with my local stores, plus that increases my output of time (which is also an important resource). Its worth money to me to not have to worry about certain things like packing up books or running to the post office.

Just like going the POD (to customers) route via Lulu, I'm OK with paying them to do what they do best, which allows me more time to work on more rpg stuff. I'm a one-man band (I'm sure a lot of the creators here are) and if I can outsource stuff that eats up my time (like mailing stuff or tracking sales) then I am totally cool with that.

Now in the interest of staying on topic, my previous reply answers some questions Ron posed, and I hope outlines a decent strategy for getting my game out and keeping the merch flowing to meet demand (hopefully, there will be some of that). PODing directly to customers through online stores and PODing (to myself...digital printing, that is), using fulfillment houses to manage my stock and deal with distributors to push my stuff on to retailers reduces my profit, but I don't have to deal with it (and it also keeps me from screwing it up).

Take care,

Ken

[TonyLB]

Ken, I'm not seeing a place in your plans for selling the books you have printed (for you) directly to customers, bypassing Lulu, the distributors and indeed the gaming stores.

Is this intentional?  Have you considered that sales model and decided that it's not a market you want to pursue?  Or have you not yet considered it?

[Ken]

Hey Tony,

I haven't ruled out directly selling to customers, but beyond my local and regional shops (which I'm assuming will be the bulk of sales that I will be directly involved in) I'm not sure what other avenues I follow. I'll be selling off my website, but that will just be a link to my POD (for the customer) partner...probably Lulu.  Most of the stock I print for me will go to a fullfillment house for distributors. I'll probably handle the local shops myself, just to keep the relationship going and get feedback on sales, and stuff.

Ken

[guildofblades]

>>but (I think) it stands to reason that the opportunity to sell to more shops, even if I make less per unit, nets me more profit overall.<<

Hi Ken,

Yes, in theory, that is how distribtution is suppose to work. That is how it did work in hobby gaming prior to 1998 too. However, afterwards a transition happened in the marketplace where most distributors became completely risk averse. Meaning they didn't want any product from a small company on their shelves if they could help it.

So what they did is, mostly, forced all small publishers to sell through a fulfillment house.  The reasons for this, to reduce their labor in dealing with smaller companies. Well, and the biger reason, so they could order books for a small company through the fulfillment house nearly on demand. What we found was for most products being sold through a fulfillment house would see an initial order of ok size (but far smaller than it had been back in the days when the distributor actually had some monetary risk involved with stocking and selling your title), but its usually just enough units to pass through to the stores that ordered them and to leave one or no copies on their shelves for future sales. Those they try to order from the fulfillment house *after* they have already recieved the order from a retailer.

The result. A whole lot of time a retailers' order get filled right away since its large enough to qualify for the free shipping amount and thats accounts recievables they want to get the time ticker started on. Your order gets lost. If the retailer tries to order several times, the rep might go ahead and put the title on order hoping to tack it onto the retailer's nect order. The problems from this system are twofold. Most retailers get tired of seeing bad fill rates on your products so they pretty much give up trying to order them after a few times. And for a customer who went to his local retailer to try and order your book "special order" to be pulled through this lumbering silly system, that have to wait like 4-8 weeks sometimes to get the book, if the retailer or themselves have ot given up before then, which they often do.

Worse, retailers, believing that a product "in the system" is readily available to order, often skimp on stocking the product on their shelves for sale, instead waiting for a customer to come in with an order in hand, then they try to tack an order for just one copy on their next order with the distributor (which usually results in what I described above).

We ran that game of trying to sell through distributors for about 7 years. When we finally stopped and made our products only available through us on the internet and only through retailers we sold to directly, our sales began to climb. Why? More than anything else, I believe we had instantly removed all the confusion of where and how to buy our products. You see, prior to making that move we were out there marketing our behinds off and generating X amount of interest in our products, but due to all the road blocks to a customer actually laying hands on the product once they had decided they wanted it, we were only seeing maybe 30-40% of X in actual sales. Now we see nearly 100% of that, because customers don't often get confused as to how to buy our products, and we don't run them through a 4 to 8 week twisted maze as a reward for seeking our products out in an attempt to own them.

If you just want to get your game "out there", sure milk distribution for its first wave of orders. Then yank that product out of distribution and sell it direct. Direct to customers and retailers. And make sure everyone knows thats how to get your product. If you leave the confussion out there, it just leads to missed sales.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com
http://www.1483online.com

[Ron Edwards]

Ryan is speaking wisdom. I'll add that some publishers like to keep a few books available via distribution so that retailers for whom the game sells, but who are still mentally wedded to distribution, can still get it, if they want. The "one big push" model Ryan describes is valid, I think, not because the demand is one-push, but because of the wacked-out confusions he's outlined.

I'm really posting, though, to focus on something else that seems a little foggy in your posts - the meaning of "direct sales." Taken most literally, that would be me walking over to you and handing you money, and you giving me a book. But as used, it means anything which gets the book from you to me without someone else owning it in the middle.

That's the key difference between a distributor and a fulfillment house, for instance. At the moment, a bunch of copies of Elfs sits in the IPR warehouse. I own those, not IPR. Whereas a number of copies of Sorcerer are presumably (although I say this with less confidence) sitting in an Alliance warehouse. I don't own those; Alliance does. The latter are not considered directly sold, but the former are.

So if someone hits the Buy button at my Elfs site or at the IPR site, and Brennan or Ed sends them the copy and processes the money, later to be sent to me less shipping/commission, then it's still "direct." It's no less direct that way than if it were the way I did it a few years ago - took the order myself and shipped it myself.

This might seem kind of odd at first glance, but the distinction between the middleman owning it or not owning it is actually a huge, huge deal, financially and procedurally. For one thing, it means the profit from direct sale of any kind is very large compared to indirect sale of any kind. Therefore the IPR commission bite is extremely easily absorbed, whereas the Alliance bite (the "discount," or difference between what they pay me and the cover price of the booki) is well over half the profit.

Does this help, Ken? Maybe the point is a little too familiar to me, Ryan, and Tony, in that we haven't stated it outright yet. It is: direct sales (of any kind, fulfillment house or not, etc) is the primary route for basic business, in this hobby. Indirect (official term = "three-tier") sales are secondary and work best as an added-on concern.

Best,
Ron

[Michael S. Miller]

Hi, Ken.

Just to weigh in, my sales numbers for 2005 are available here.[/ur] I released the game in August, did my own fulfillment until mid-October, then switched to IPR. All those yellow bits are sells to retailers that I don't know. You seem to be holding onto this idea that there's this massive pool of retailers that will order your game if you just get it in a distributor's catalog. Well, I can tell you from experience that there's a number of retailers that will gladly order your game from a place like IPR, without the unreliability and horrible profitability of distribution.

[Ken]

Hey Everybody,

Wow. Thanks for all of the insight. There are certainly a lot of options out there. Though I was originally drawn to the cheapness of POD (to the customer) alla Lulu, I'm now developing an interest in the fulfillment house route (specifically IPR). Key20 is a good option too, and appears to have a lot of extra printing services for the indie game maker. It looks like I would have the books printed, sent to IPR, and sales (to individuals and retailers) would be handled through their website. Am I getting this right?

If so, digital printing seems affordable. What printers have you guys used, and about how much did your runs cost?

[TonyLB]

If so, digital printing seems affordable. What printers have you guys used, and about how much did your runs cost?

This roundup seemed pretty helpful.  It is a few (possibly important) months out of date, so if you pick a company in particular you might want to ply the search function to see if there have been any more recent experiences, good or bad.