Pay the bookseller. Novel idea. Sort of like my whole idea that we should pay the writer. Alas, every time I study the book industry, no one in charge seems to understand why paying those pivotal to your business is kind of a big deal.

I was going to blog on something else, but this morning I awoke to the New York Times article:

Can Britain’s Top Bookseller Save Barnes & Noble? James Daunt fought Amazon and rescued the country’s biggest bookstore chain. Now comes Chapter 2.

For me? This is not CHAPTER 2, it is a steaming pile of Number Two.

Call of Doody: Battle of the Books

First of all, this NYT title is grossly inaccurate and misleading. Daunt might have rescued the UK chain Waterstones, but his rescue plan had very little to do with directly combatting Amazon.

In fact, it was precisely because Daunt didn’t engage with Amazon that Waterstones managed to regain financial footing.

One of the single largest business decisions that killed Borders—as well as Barnes & Noble—had to do with crap tactics. Both giants engaged the competition (Amazon) on terrain where their adversary held almost total dominance.

*throws history book at screen*

The Internet reminds me of Russia. Only those born to it prosper and only fools believe they can win a war against the harsh elements they’ve never studied let alone mastered.

Bezos was only too happy to let Borders try to invade. Amazon hunkered down, and Borders ended up eating all their metaphorical horses before they finally starved.

Did B&N learn? Nope. And the oil froze in their Nooks.

Maybe y’all think I’m being melodramatic, but…

In my recent blog post Amazon Publishing: The Road to Conquest & How Bezos Razed New York, I mentioned how Borders was struggling but doing okay, until they broke the deal they’d made with the devil Amazon and got the bright idea to go it alone on-line.

Can anyone say, ‘Waterloo?’

Similarly, Barnes & Noble—apparently visited by the same ‘Bright Idea Fairy’—launched the Nook, and hemorrhaged over a billion dollars.

Why? Because they didn’t learn from Borders and believed they could win a land war in Asia book war on-line.

*pictures Amazon sitting inside near roaring fire drinking vodka and playing checkers*

What Daunt Did Well

So let’s just get some facts straight. C.E.O. James Daunt didn’t rescue Waterstones because he took on the big, bad Amazon. Amazon wasn’t why the Waterstones stores were bleeding out.

Daunt went head to head with traditional publishers. Publishers were killing the bookstores.

Daunt forswore the $38 million in ‘co-op fees’ which gave the publishers the power to display the selection of books they liked and wanted to sell. Problem was that what the publishers wanted to sell rarely coincided with what customers wanted to BUY/READ.

The co-op fees, enticing as they might have been, were undermining sales overall. Daunt was savvy enough to appreciate that bookstores wouldn’t survive if they kept putting the publishers’ desires ahead the customers’.

Daunt also gave Waterstones a heavy makeover. They didn’t all look alike. Some were big, some small, some didn’t have the name Waterstones at all.

***Went a little Dr. Seuss there.

Cutting the Co-Op

The co-op system was an albatross. Publishers were smitten with their Buy Two Get the Third Free but, according to Daunt, customers rarely found the third book they wanted (FREE or not).

Waterstones, at one point, was returning TWENTY PERCENT of their inventory for remaindering.

For those who don’t know how traditional publishing operates, the physical bookstore system is consignment-based.

Publishers send books they believe will sell. Booksellers, however, eventually return unsold books to publishers at the publishers’ expense.

But also at the booksellers’ expense because failing to sell TWENTY PERCENT of your inventory is—to use a fancy business term—bad juju.

Bookstores lose money, too, because they have to pay their staff to rip off covers and box them to ship back to the publishers. Time that could be better used selling books.

With Waterstones shipping back roughly a FIFTH of all inventory, this translated into millions of dollars in losses (for both parties) every year.

To continue was madness. Got it. Yay James Daunt.

Daunt vs. Traditional Publishing

Daunt finally convinced the publishers to work with him and offer a discount on all the books, not just those hand-selected for specialness.

He then started changing up all the stores, making them resemble the smaller independent stores of yesteryear.

Each location had unprecedented control over which books they stocked and where.

“He’s (Daunt) essentially created a series of independent bookstores with the buying power of a chain.”

Tom Weldon, Penguin Random House U.K.

After untangling the co-op albatross from around Waterstones’ neck, the chain dropped from TWENTY PERCENT of inventory shipped back to publishers down to FOUR PERCENT.

***Currently, according to the NYT article I’m referring to today, Barnes & Noble averages TWENTY to TWENTY-FIVE PERCENT of inventory is returned to the publishers.

#OUCH

The Oblique Attack: Atmosphere

Daunt ditched the co-op payout, empowered the individual stores to curate their own inventory, thus making each location highly unique and individualized. For the most part, each bookstore’s inventory currently reflects the community it serves.

Waterstones also made a big deal out of making their bookstores a place people wanted to go and maybe even stay awhile.

This is probably the only area I’d grudgingly concede Daunt ‘fought’ Amazon.

Because for me, the fight really hasn’t ever been with Amazon. Bezos, from the beginning, wanted to create a system that catered to readers. That a book would become popular because readers enjoyed it.

This idea that a small group of of intellectually isolated elites could choose what the rest of the country wanted to read was absurd.

For those isolated elites to then insist the books they enjoyed should comprise most of a bookstore’s inventory, despite regional, cultural and linguistic differences? Height of hubris.

And we’re somehow shocked that B&N returns an average of 25% of its stock?

So, with everything thus far, I agree a thousand percent that Daunt did an excellent job.

But here is where we begin to part ways.

Who is Achilles James Daunt?

When you open the NYT article, there’s this smart picture of James Daunt next to a fairly misleading title (as we’ve already discussed).

The only direct jab at Amazon is in reference to creating stores with atmosphere as opposed to a quick on-line transaction.

Whatever. They DO know Amazon is opening stores that are catering to local tastes, preferences and offering all sorts of cozy feel-goods and extras, right?

Right?

Anyway.

The first third of the article is inspiring, and refreshing. After ten years ranting on my blogs, it’s nice to see someone making sound business decisions for a change.

I was impressed that Daunt had no problem going head-to-head with the major publishers. I liked that his new approach lowered waste, increased profit, and that he’d streamlined staff to allow time for the stores to recover.

Then we get to the second part of the article….

*heavy sigh*

The article gushes on and on about Daunt, how he’s the son of an ambassador, how ‘he joined the corporate finance department of J.P. Morgan in Manhattan, shortly after graduating from Cambridge University in 1984.’

Um, all right. Interesting stuff.

How though he loved the money, but ‘his wife, Katy Steward, recoiled at the prospect of 40 years of dinnertime stories about stock swaps and high-yield bonds.’

Ok. Yeah, sounds like a total drag.

We learn that the very wealthy Daunt has an unusual approach to his globe-trotting family vacations that he takes with his wife and two children.

How they’ve backpacked through Romania, Ethiopia, and Cuba blah blah blah.

All well and good. I found it interesting and the article would have been fine had it ended here.

But it didn’t.

For those who kept reading, this pseudo-personal profile gave the last third of the article a…’Let them eat cake’ vibe.

Same $#!&, Different C.E.O

Borders died because they got greedy. Barnes & Noble imploded because of greed. Traditional publishing (namely the multi-media conglomerates that own them) are dying off out because of…y’all guessed it, GREED.

What all these folks have in common, was they believed they could prosper while shivving those who mattered the most.

Namely, the writers and the small bookstore chains, the indie and mom-and-pop bookstores…and finally the actual book sellers (the retail people).

The Big Six didn’t want to wait on golden eggs, so they let Borders and Barnes & Noble talk them into gutting the goose that eventually cooked all their geese.

That is a serious gaggle of @$$hattery right there.

***For those who don’t know what I’m referring to, go HERE.

Granted, Daunt’s plan is doing a ‘better’ job of getting lesser known authors in front of readers. The writers are doing ‘better’ under this new model.

Better being a relative term.

But, what I simply cannot understand is how NO ONE in charge gives a rip about the second most important person when it comes to selling books.

The retail folks on the floor and in the trenches! What is WRONG with you people?

Pay the bookseller!

When the people who work for you have to launch/sign a petition to ask for a living wage? Call me pissy, but I don’t want to hear about bougie trips to some place called…Jura.

And I don’t give a single fig about how you argued with an Italian showroom designer—at a posh London restaurant—about how the perfect angle of a book on display should be three degrees not four.

Let’s circle the wagons back to what really matters.

You Can’t Afford to Raise Their Pay?

Can anyone in this industry MATH?

By Daunt’s own admission, the percentage of remaindering has dropped sixteen percent. Sales are up, waste is down. Employees are selling books instead of boxing them.

So…why not reward them?

Daunt also agrees the starting pay is ‘rubbish,’ but then he loses me. To increase pay would cost $6.2 million the company doesn’t have.

Even though, according to the April 2nd, 2019 article, James Daunt says pay row obscures ‘decent progress’ at Waterstones via The Bookseller:

Under Daunt, Waterstones has returned to profit, reporting a pretax profit of £20m on sales of £386m in the year to end April 2018, and Daunt said the current fiscal year would see continuing improvement. But he said the business remained fragile.

Philp Jones

If I am understanding correctly, Waterstones went from dangling over the precipice of imminent bankruptcy…to now boasting $16.4 million in pretax profit on $317million in total sales.

That massive improvement can’t be leveraged to raise a paltry $6.2 million to keep the workers who made this gain happen from walking out the door?

Y’all can’t, I dunno, offer profit-sharing?

All righty.

Better Pay is Possible if a PRIORITY

Daunt, to my dismay, takes a hardline stance with the employees. His idea is that employee pay will increase incrementally over time, once someone proves they are loyal or some crap.

According to the New York Times article, Daunt claims that, “…the point is to provide an incentive to stick around, even if that means stinting on those who will not.”

Who will not.

All right, so they can’t make a living wage to eat and have a roof over their heads, but if they leave for a job that pays them better…they just weren’t committed enough?

What I dislike immensely about the Daunt Payment Plan is it’s directly related to time served. And I quote:

“We pay people more if they are committed to us than if they are only staying for a year.”

C.E.O. James Daunt

But maybe they’re only staying a year because they can’t afford to remain in a job with such low pay. A thought?

Also, let me get this straight.

If a brand new bookseller is always on time, never absent, hustles hard and sells a ton of books for only a year, he/she is still paid crap because they’ve not been there ‘long enough.’

Yet, another employee who maybe still lives at home and has no dependents, who has the means to stick around for the pay boost is rewarded…even if that person does the bare minimum to remain employed.

Ok.

Time alone is a terrible metric for measuring the value of an employee. But that’s my POV.

The Benefits of Higher Pay

Galen Emanuele’s article, Why You Should Pay Your Employees as Much as You Can articulates this beautifully. But, this is basic common sense.

First of all, better pay attracts and keeps exceptional employees. This drastically lowers turnover and the cost of hiring and retraining a continual stream short-term of replacements.

Treat your employees better…and they do a better job.

*shock face*

Don’t take it from me. Check out Fortune’s Top 100 Places to Work.

This article in Business Insider uses Costco as a prime example. Costco employees cite pay, benefits, and job security as the main reasons they love what they do.

On top of this, Costco actively creates ways for employees to grow and move so they CAN envision Costco being their career.

I can personally attest to how successful Costco is at employee retention. I’ve been shopping at three-four different Costco locations over the past fifteen years. I know the names of most of the employees…because they’ve been there for YEARS.

Costco offers premium pay and benefits from DAY ONE.

Not, ‘Hey if you’ll endure an undeclared number of years of crap pay, maybe there will be a little something shiny in it for you at a later, undisclosed date.’

How can staff be productive if they’re busy looking for a better job or worrying how to pay the food bill?

Daunt would do well to think about his priorities.

Oh, James Daunt is mad about how certain Waterstones locations have installed additional power outlets for university students ‘who consume more power than coffee.’

He has no problem with Waterstones providing free electricity to a bunch of students who are there for the free power and free wi-fi and who aren’t buying books.

“We’re playing the long game…When those students are rich and famous, they’ll buy books from us and the cost of the electricity will be paid back in spades.”

James Daunt

But taking the hit to pay employees better? Rewarding them for how far Waterstones has already come?

Trusting that better pay will make them feel valued and thus will inspire employees to be more passionate, enthusiastic and evangelical ISN’T a worthy long-game investment?

So letting students sponge off the light-bill totes doable, because they might buy books ONE DAY when they’re rich and famous (because books are like Porsches and polo ponies).

Enabling users and takers is a super smart plan, but paying employees who’ve already created value and who are only adding MORE value is a horrible business decision.

Want to Save B&N? Pay Matters

Daunt would be wise to remember that Barnes & Noble isn’t out of the weeds yet. Far from it.

If leadership continues this trend of paying/rewarding workers as little as possible—then bragging in the New York Times about exotic family trips around the world—Amazon will poach Barnes & Noble’s best talent.

How do I know this? It’s what they’ve been doing for a DECADE.

The Big Six, Borders & Barnes & Noble didn’t value the mid-list author, and Amazon happily picked up those authors and offered them better pay. As of a month ago, Amazon’s Thomas & Mercer poached Penguin Random House’s biggest author, Dean Koontz. How?

Hint: Better pay.

***Koontz is only the largest of a number of big-name authors who’ve already defected because they want to continue having a career.

Amazon is already opening physical bookstores that are smart-stocked, and offer a cozy feel and bells and whistles. Sorry, Mr. Daunt but you don’t have an edge there.

Besides, does Daunt actually believe Amazon won’t happily poach the best of B&N’s employees the same exact way?

By PAYING them more?

And this all seemed so promising.

Daunt has already demonstrated creativity and tenacity in other areas.

I believe he can use the same imagination and fire that rescued Waterstones from tanking, and use his mad skills to figure out some way to properly compensate those who grind daily in the bookselling trenches (quickly…NOT in a decade).

For what it’s worth, we writers value our bookseller advocates and cannot thank you enough. We appreciate your passion and all you sacrifice to promote reading and our books.

As for the big bosses…

No One Home

The article closes with Daunt bemoaning how Waterstones’ employees never pick up the phone. He notes that a sign of progress is when he can call a location and someone answers.

Fewer than half of the Waterstones’ locations passed this metric.

And the band played on the phone rang on…

Announcements

TOMORROW, I will be teaching Bring on the BINGE: How to Plot & Write Series. Series are a fabulous way to build a fan following AND make really excellent money (when done well). This class is 2.5 to 3 hours long (and YES, all classes come with a FREE recording).

We’re going to cover all aspects of how to write a series, the different types of series, and so much more.

As I mentioned last post, Maria Grace will be teaching Taking the Plunge: How to Write Deep POV on FRIDAY. This is TWO HOURS of professional instruction about how to ROCK Deep POV.

Treat yourself! Feel free to wear this to class .

The post Pay the Bookseller! Why C.E.O. James Daunt Won’t Save Barnes & Noble appeared first on Kristen Lamb.

Goliath has fallen. The leviathan Barnes & Noble, the big-box chain that reinvented retail and defined a generation…is no more.

SOLD!

Reuters announced early last Friday that the hedge fund Elliot Management Corp. would be purchasing the former book giant for roughly the equivalent of Kim Kardashian’s jewelry allowance ($683 million including debt).

This bold move marks an end to the once-dominant book retailer’s status as a publicly traded company.

After almost a decade of abysmally stupid business decisions and plummeting sales—and me blogging and b#@!$ing about it the entire time—this buyout feels like a mercy killing to me.

Someone might finally save Barnes & Noble from itself.

***I secretly suspect this buyout was the only option left after Mary Kay declined to sell cosmetics alongside records, movies, toys, stationary, gifts, knick knacks, coffee, candles, essential oils and everything else NOT BOOKS.

#sarcasm

Now that the former mega-retailer’s fate is in the hands of the Elliot Group, perhaps Barnes & Noble can go back to being a…wait for it…wait for it… *whispers*…a bookstore.

Failure in Leadership

Yes, today I feel ranty. I’m angry. No, I’m past angry and onto livid. I’m not the sort of person who enjoys saying ‘I told you so.’

First, I agree wholeheartedly with the Bloomberg Opinion. I don’t quite know the future of Barnes & Noble, because they can’t keep blaming everything on Amazon.

Yet, before we focus on that bugbear, I’d like to take an opportunity to call out those in publishing leadership. Why?

Because when Barnes & Noble sneezes, we all catch cold.

And that fact just ticks me off.

In order to understand exactly how delicate of a time we’re all in (writers), it’s imperative I paint a full/accurate picture of the colossal mess we’ve been handed.

First, publishing is a business.

Might have been a good start for the powers that be to have remembered that.

This said…

To offer any reasonable projections, it’s critical for us (writers) to properly appreciate the sheer scope of the incompetence that’s led us all to this place.

Here is how leadership should work. Yes, even in publishing.

PLEASE NOTE: Most of the major houses we once referred to as ‘The Big Six’ operated under the directives of multi-national conglomerates and giant media companies. The agents and editors and everyday people in the NY (New York) publishing trenches are NOT the ‘leadership’ folks I’m calling to the carpet.

***Looking at you, CBS***

Back to leadership. First and foremost…

Protect the Resource

The top echelon/leaders in charge of the publishing business had ONE job. Protect the writers. Simple. If there are no writers, then there is no content (no stories or information). No stories or information (books), then publishers and bookstores are irrelevant.

This is NOT rocket science.

Take care of writers (resource) and readers (consumers of said resource).

NEWS FLASH:

Publishers were NOT charged with preserving the paper industry or protecting/rescuing incompetent retail outlets….especially at the expense of their most valuable resource (writers).

About Those Authors

From all indications, the powers that be ‘forgot’ that writers play a fairly important role in the whole publishing process.

They aligned with the big-box chains and, in doing so, brokered deals that lined their coffers while simultaneously decimating the author middle-class.

Authors who’d previously been making a living wage under the B. Dalton (smaller chain and independent bookstore) model suddenly had to polish up the resume.

Why?

The Raw Deal

Under the big-box model, selection and variety ruled. Shelf space was precious and finite, meaning these mega-stores didn’t carry those extensive backlists like the old independents.

Problem was, those backlists had once been the bread-and-butter for the working author.

Under the new big-box model, the stores would only stock the backlists of the top earning authors (because those were guaranteed to sell).

The New York publishers (a.k.a. ‘The Big Six’—Penguin, Simon & Schuster, Macmillan, HarperCollins and Hachette) and other large traditional publishers used this business reality to justify mothballing the backlists of virtually all authors who weren’t household names.

It’s Just Business

This meant instead of an author earning royalties off, say, fifteen books, they could only earn royalties off their most recent title.

Many authors witnessed decades of work vanish along with the small bookstores that supported them.

Not only did this change mean a DRASTIC pay cut, but it also meant these authors had no viable backlist to cultivate existing fans into future fans. There was no longer a way to truly earn their way into household name status.

It was a formula to fail.

If fans wanted the mid-list or multi-published author’s earlier books, they had to go find them in secondary markets (used bookstores, garage sales and all places where the author wasn’t paid).

That was bad enough, but, when e-books became a viable option, NY had a second chance. An opportunity to do right by their authors.

They could have resurrected those titles at least in e-book form.

Alternate Ending

When Amazon first came on the scene, Borders was still alive and Barnes & Noble dominated the bookselling industry.

Yet, when Amazon launched the first affordable & user-friendly e-reader (the Kindle), early adopting readers found themselves in a conundrum.

They had a new gizmo where they could read all the books they wanted…but there weren’t all that many books. In fact, far too many of the available e-books were unvetted garbage that wouldn’t pass high school English, let alone a NY gatekeeper.

This didn’t have to be so.

NY possessed a ready arsenal of thousands of mothballed titles, novels that had already been thoroughly edited and market tested.

If The Big Six didn’t want to discount their new titles on Amazon? Fine. But they could have field-tested the efficacy of the digital model using backlists that weren’t doing anything but taking up space.

***Many of these books even had earned the coveted titles of USA Today and/or NY Times Best -Selling Book.

Amazon would have had good books for their customers to load on their new Kindle device and they’d make money.

Winner, winner, chicken dinner.

The mothballed authors would have been happy because they’d be back earning money off books liberated from cold storage.

NY could have not only made money (and happy writers) but they could have also used the backlists to appease Amazon and gather critical data to guide future business decisions.

Did they want to keep offering ebooks on Amazon or maybe create their own publisher sites for e-book distribution?

Was this e-book thing really just a fad?

The E-Book Gold Rush

Alas, instead of creating a Big Six controlled e-book division staffed with eager college grads to format books and flood Amazon with gatekeeper-approved books, NY decided…

E-books were evil.

And that readers would always want paper and a ‘browsing experience’ in an oversized store with ridiculous overhead.

Publishers initially handed backlists back to the authors because they believed these books were worthless. They truly believed e-books were a fool’s pipe dream and a fad (though did nothing to test this opinion).

Ah, but when those spurned authors started converting their cast-off backlists INTO E-BOOKS…and making a boatload of money?

With readers desperate for good e-books, these authors started making far more income than they ever had being traditionally published.

This e-book gold rush ignited a mass exodus of multi-published and mid-list authors…right into Amazon’s welcoming arms.

That’s Gonna Leave a Mark

NY was suddenly in BIG trouble. The next generation of ‘household names’ had historically been cultivated, groomed then promoted from the ranks of the mid-list.

But the mid-list authors, after years of loyalty, got fed up with being treated so poorly…and so #ByeFelicia.

What did the publishers do? Did they see the error of their ways and make an e-book division strictly for backlists?

Maybe even broker a deal that if enough e-book copies sold, a book/series could garner a fresh print run?

Nope.

They Did THIS Instead

Publishers changed all the contracts to make it where authors no longer had rights to their backlist…ever. Those backlists would remain the property of the publisher indefinitely to do with what they wished.

Including nothing.

A once-devoted author pool suddenly turned bitter (for very good reasons). Not content to starve, a large portion of the traditional talent went rogue.

They cut their losses and began self-publishing. More than a few created indie houses of their own that were more efficient and geared toward the digital marketplace.

The authors who’d once made money for NY suddenly became additional competition (with Amazon’s blessing).

Ironically, The Big Six unwittingly financed Amazon’s rise as a publishing powerhouse.

What’s insane is that most of the traditional authors had ZERO desire to leave. They’d been publishing traditionally for years, even decades. Going it alone meant a lot more work and a STEEP and highly technical learning curve.

…from a group that feared e-mail.

Most of these authors simply wanted to just write the books like they always had.

Ah, but when faced with starvation? You serve the master who feeds you.

In a dismal twist of fate, NY helped self-publishing transition from ‘shunned last-ditch of the hack wanna-be writer’ into a viable and respectable publishing alternative.

Genius.

About Those Indie Bookstores

The Big Six didn’t treat the smaller chains/indie bookstores any better. It didn’t matter that small chains, indies, and countless mom-and pop bookstores had been the beating heart of publishing since its inception.

These stores promoted authors, held events and book signings. They pushed literacy, actively sold books and made The Big Six what it was.

Oh, but how short the memory gets with big new friends with deep pockets.

The Big Six participated (obliquely) in the virtual extermination of the small independent bookstores.

Kristen! How can you say that?

Uh. Math. The larger the order, the deeper the discount. Doesn’t take an economist to to do that calculation.

Without the purchasing power, the smaller chains and mom-and-pop indies couldn’t compete. They steadily died off until only a tenacious remnant remained.

***Refer to the movie You’ve Got Mail.

This was all well and good before Web 2.0.

Goliath is a formidable ally until someone bigger, meaner and hungrier comes along.

As I detailed above, NY had countless opportunities to adopt a different business model and didn’t. They ignored all the data, and pretended the marketplace and consumer buying patterns hadn’t changed since the 90s.

Ultimately, NY continued to support the big-box stores at the expense of authors (talent) and smaller bookstores (their former allies).

Goliath versus…Skynet

All of this was utterly unnecessary. It isn’t as if people like me (and those way smarter than me) haven’t been jumping up and down screaming DANGER! for over ten friggin’ years.

I’ve blogged my fingertips bloody begging NY to see reason and turn things around. I even wanted Barnes and Noble to listen and change their ways (for reasons I’ll explain in a moment).

Ugh.

There Were SO Many SIGNS

It wasn’t like the folks in charge didn’t see Amazon’s way of doing business had more red flags than an Ashley Madison dating profile.

The Big Six got sucker-punched as early as January 2010 when Amazon removed the BUY buttons from all the Macmillan titles. The next red flag? When a ‘mysterious’ glitch temporarily removed the BUY buttons off ALL the Big Six titles—Penguin, Simon & Schuster, Macmillan, HarperCollins and Hachette.

The NEXT of many red flags? Amazon (allegedly) removed virtually all the discounts on Hachette titles, according to a 2014 article in Forbes. I could go on, but y’all get the point.

Short of a weird rash that wouldn’t go away…

Red Flags EVERYWHERE

To be clear, I am not Amazon-bashing (yet). But just the examples above clearly demonstrate how legacy publishing refused to acknowledge how completely vulnerable they were.

For instance, maybe it really was a glitch that temporarily removed ALL The Big Six’s BUY buttons.

***And maybe I’m a Chinese jet pilot.

But, giving the benefit of the doubt—and assuming Amazon wasn’t flexing digital muscles to make the old dogs sit and stay—any one of these episodes alone should have been a major turning point in how The Big Six did business.

These were the crucial moments, the pinch points.

Publishing leadership should have thrown everything they had into innovating and making darn sure no one ever again had the power to grab them by the tender bits.

Everything is Okay, Nothing to See

After ALL this, did the major publishers innovate? Perhaps listen to analysts and bloggers and update their business plan? Maybe remove its parasol and bustle?

No.

Did they pay attention to the digital tsunami that had already obliterated Kodak, Radio Shack, Blockbuster, Sam Goody and Tower Records?

Nope.

Did they pay attention to why Borders went bankrupt? Hot wash it to make a better plan? No.

Did they pay adequate attention to the fact that Barnes & Noble has had FIVE C.E.O.s in the past FOUR YEARS, each one increasingly more incompetent than the previous?

*screams silently*

Wasn’t anyone in charge concerned that Barnes & Noble was shuttering an average of twenty-one stores a year as of 2017?

That the only way Barnes & Noble stock valuations could have dropped faster would’ve been to strap them to The Titanic?

Short of using sock puppets to act this out, I just…literally can’t even.

There was a time those in charge of big publishing could have learned and retooled.

If they’d cared about their writers—or listened to those agents and editors so loyal they were practically working for slave wages to maintain some sort of quality control—this whole Barnes & Noble situation might not gall me the way it does.

They could have been a contender. Could have changed. Instead?

They doubled down with Barnes & Noble, a company so inept it couldn’t find its own @$$ in the dark with Google maps and a service dog.

The Future of Barnes & Noble

Bloomberg Opinion’s Sarah Halzak said it best in yesterday’s post:

“…perhaps it is inevitable that Barnes & Noble is a smaller, less influential retailing force now than it was at the height of its powers. But it was not preordained that Barnes & Noble has become as irrelevant as it has.”

Barnes & Noble has squandered opportunity after opportunity to change their fate. Clearly the brick-and-mortar bookstore is a valuable concept or Amazon wouldn’t have gone through the trouble it has to open stores of its own.

Alas, the brick-and-mortar model wasn’t the problem…and privatization may or may not be the answer.

The Privatization Pickle

Unfortunately, Barnes and Noble is still in trouble. Privatization is no panacea. Yes, it can be a viable shield to reorganize, rebrand and regroup. More often than not? Privatization is a harbinger of death and for sound reasons.

Too often, the weight of a private equity buyout is simply too much burden to bear.

We’ve seen this sort of debt load crush once-robust brands such as Toys “R” Us, Wet Seal, The Limited, and, most recently, Payless Shoes.

Even the former office supply giant, Staples, faces an uncertain future. The Sycamore Partners, who acquired the struggling leviathan roughly two years ago, had initially planned on rebranding and splitting the giant into three.

Now? Sycamore seems set on simply cashing out.

According to a recent Bloomberg article by Davide Scigliuzzo and Eliza Ronalds-Hannon:

“Sycamore Partners is looking to take most of its cash out of Staples Inc. through a recapitalization that will saddle the company with roughly $1 billion of additional debt…”

Sadly, the most valuable thing about Staples might be its debt.

Now that a hedge fund has acquired Barnes and Noble (and its debt) this is a tenuous time. They wouldn’t be the first giant beheaded under the PE (Private Equity) sword then parted out, the rest left to the scavengers.

Some Good News

Barnes & Noble (and the publishing industry as a whole) can breathe a small sigh of relief, namely because Elliot Advisors (namely C.E.O. James Daunt), possesses a solid reputation for rescuing completely incompetent book chains.

According to a recent (June 7th, 2019) article by Alexandra Alter and Tiffany Hsu in The New York Times:

“The acquisition follows Elliott’s purchase of the British bookstore chain Waterstones in June 2018. James Daunt, the chief executive of Waterstones, will also act as Barnes & Noble’s C.E.O. and will be based in New York.”

Daunt actually has a stellar reputation in publishing and ran his own chain of bookstores—Daunt Books—before he went on to acquire the U.K. version of the bookstore big-box, Waterstones.

James Daunt—using creativity, vision, and common sense—rescued Waterstones from bankruptcy and made the stores profitable again.

He hopes to do the same with Barnes & Noble.

***I highly recommend the The New York Times article detailing all this. I imagine many of Daunt’s solutions will seem eerily familiar for those who’ve followed this blog any length of time.

A Small Celebration

Personally, I’m thrilled Barnes and Noble FINALLY has a) someone who knows the book business in charge and b) a leader with an actual success record.

Seriously.

Because this was me envisioning the old Barnes and Noble hiring process for C.E.O.s…

Have you recently driven a household name into the ground?

Yes.

Have you any experience bankrupting a perfectly salvageable company?

Yes.

Do you know ANYTHING about books or publishing?

No.

You’re HIRED!

Party’s Over & Back to Business

ALL this said, there is a reason I’ve taken y’all the long route from where the book business started fracturing in roughly 2006 to where it sits today.

We (writers) have to hope and pray that C.E.O. James Daunt can deliver or we might all be spelling Amazon, M-O-N-O-P-O-L-Y.

Amazon (or anyone) having total control should be scary for all authors. But, it is a particularly frightening scenario for indie and self-published authors, because many aren’t repped by agents with the legal know-how to fight a large machine. 

Oh, I suppose we could sue, but Amazon has armies of high-powered attorneys to make a lesson out of any of us who tried.

I know this sounds a little Orwellian, but if Barnes & Noble tanks for good and any meaningful competition evaporates? What’s to stop Amazon from having ‘technical errors’ that just happen to lose YOUR books?

Food for Thought

What’s to stop another BUY BUTTON ‘glitch’? What’s to stop them from demanding we all sell our books for $2.99 and if we don’t comply, we suddenly start having ‘technical errors’?

What’s to keep Amazon from demanding we all flash mob and act out King Lear with jazz hands?

Okay, maybe that’s going too far.

This was why I began this post the way I did. Publishing leadership (those powerful media companies) should never have allowed our industry to devolve to such a piteous state.

We are now ALL vulnerable.

Remain Vigilant

I know expectations are riding a fresh high, but remember they were riding high with Staples, too.

If Barnes & Noble doesn’t salvage something out of this mess, it could be catastrophic for legacy publishing.

Remember, to finance operations, the remaining legacy publishers NEED those bulk orders that stock the Barnes and Noble brick-and-mortar stores.

They also *winces* need orders from those mom-and-pop stores they once ‘didn’t need’ and—with help from their besties Borders and Barnes &Noble—damn near killed off.

Wow, that has GOT to be an awkward conversation.

At the end of the day, if the Elliot Advisors hadn’t ridden to the rescue, the entire U.S. legacy book industry could have collapsed. Some other investor or corporate raider could have bought the whole shebang…then promptly held a yard sale.

***Refer to the movie Pretty Woman.

Sure, Amazon sells legacy published books, but they don’t keep a large amount of stock and buy as-needed. They don’t do the large preorders that keep the lights on and employees paid.

This is still a blow because there will be a major contraction. Barnes and Noble will have to consolidate and lose a lot of fat.

Translation?

The remaining stores will likely be consolidated and many closed. Excess inventory will be sold off to reduce the debt load. This is all necessary to get back in the black.

If they fail to adequately reduce overhead and debt, they could very well find themselves in the same pinch as Staples…where their debt is their most valuable asset.

In Conclusion: Put on Our Big Writer Pants

It’s all kinds of fun to play armchair analyst and blame greedy multi-national media conglomerates for our sorry state. Yet, while ‘the suits’ certainly hold a lot of the blame, they don’t have all of it.

Just like Barnes & Noble can’t keep blaming everything on Amazon, writers can’t keep blaming everything on everyone else.

There is no Publishing Sugar Daddy. I know many writers who want to ‘only write books’ and not worry pretty little heads over that icky business stuff. This is a recipe for disaster.

Trust NO ONE.

Becoming a mega-author won’t fix our problem anymore than winning the lottery will replace our retirement fund.

Chuck Palahniuk (author of Fight Club) is close to broke after his literary agency’s accountant embezzled $3.4 million. The famed agency Donadio & Olsen has now declared bankruptcy. Meanwhile, their former accountant is free after posting bail.

Ironically, Palahniuk had suspected something fishy a few years ago but suspected piracy. He never thought (as if anyone would) to grill those who were being paid to handle his affairs.

If we want to thrive in the new publishing paradigm, we have GOT to be educated and know the business of our business, regardless the path we choose.

We also have to write excellent books. The more books we write and the better they are, the more negotiating power we’ll have.

And, finally…y’all knew I was going to end up here.

An author brand/platform is not an option, it is a LIFELINE.

The ONLY way to Amazon-proof ourselves is to create a passionate and vested following who will buy our books no matter where we list them.

Then, if Amazon (or Barnes & Noble, or Joe-Bob’s Book Barn or whoever) ceases to be a good business partner?

We can…leave. Yay!

***falls over***

***brains all over laptop***

I hope you enjoyed and I LOVE hearing from you!

What Are Your Thoughts?

Other than this post is long. Trust me, I KNOW. But, hey, encapsulating fourteen years of the publishing business into one post is no easy feat.

Do you feel a bit less terrified now that you know Barnes and Noble might just pull through?

What are your thoughts, concerns, ideas for what we writers can do differently in the future?

Are you hopeful? Disillusioned? Confused? Frustrated? All of the above?

I hope this post has helped y’all gain fresh (and balanced) perspective of where you sit in the greater scheme of publishing. Yes, it’s a tumultuous time in publishing, but while industries change, humans never do.

Humans will ALWAYS want stories and information.

So long as there are humans, there will be educators, inspirers, and storytellers. Our industry might be a mess, but our jobs are secure.

Long live the dreamers!

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