Ingram Content Group is Part of the Problem, Not the Solution
The recent decision by Ingram to cut off stores (including mine) that didn’t meet a $5K minimum in 2014 that they didn’t know existed (in our case by less than 10% of the quota) is really a nail in the coffin for small stores. When you operate with a 6% ROI (Return on Investment) and a supplier offers you an extra 6% on a major purchase, that is contributing to increasing that ROI. But when a supplier takes away 10% that really plunges your profitability.
Here’s another way of looking at it: You buy a $10 book for $6. Your gross profit is $4. A supplier changes your discount by 10% and that book now costs $7. Your gross profit is now $3. In other words, you’ve been cheated out of 25% of your former profit margin.
So why does Ingram want to purge small stores from their roster when they already had a mechanism in place requiring minimum orders? It’s a question really requiring deeper investigation, and we’re working on it. Clearly, Ingram was the friend of the independent bookstore as well as gift stores which dabbled in books as a sideline. For our part, our purchases with them would have been much, much stronger in 2014 were it not for the service offered by Send the Light Distribution. We gave STL a “first pass” on our import titles and then used Ingram only for titles unique to them, and rush orders that STL did not have in stock at the time.
But it wasn’t enough. Neither was 30 years of goodwill and a perfect credit history.
There was no appealing their decision.
There’s a rule in pet ownership that you don’t scold a pet for something they did a day ago. You deal with it at the time. If any stores impacted by the new decision had been told ahead of time that, “In June of next year we’re going to change your terms if you don’t meet the $5K minimum, you need purchase only $421 more by the end of the year;” I know we would have put an order together in minutes. But to be punished in June for something we did the year prior… well, as stated, I wouldn’t do this to a dog.
The decision was arbitrary.
The decision was heartless.
We can no longer handle special-orders profitably, and so we are gearing up to tell customers to seek out another store in our community which is not a Christian bookstore, to purchase their esoteric Christian titles through them.
Something we’ve never had to do in 30 years.