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Posts Tagged ‘Ingram Content Group’

Ingram Determines What is a Bookstore and What Isn’t

Ingram’s annual minimum is a slap in the face to small, independent bookstores. It’s another way of saying, ‘we don’t see you as a legitimate bookstore and we are the ones who will set the standard and make the determination of your legitimacy and entitlement to trade discounts.’

I really try to keep the personal rants to a minimum, but this is one of those, so feel free to move on.

I have mentioned before that several years ago we received communication from Ingram International informing us that because our wholesale purchase the previous year were less than $5,000 US net, we would be placed in a short discount category.

They no sooner did this than it became a self-fulfilling prophecy. Whereas before I had quite willingly padded my orders to meet the 10-unit minimum on iPage for trade discount, I no longer had any incentive. Instead, I started placing orders one book at time. (They do this for Amazon and Chapters, so I figure there are built in efficiencies at their end unknown to us in Canada. One time my single book arrived in a Chapters box.)

My account would never come close to $5,000 annually again. Furthermore, with the deals offered by Canadian suppliers, plus the fact their distribution rights are enshrined in Canadian law, there is no compelling reason to order a Christian book from Ingram (i.e. Spring Arbor) unless you are on the west coast and facing some delivery time issues for that book’s customer.

This week however, I actually had reason to place a ten-unit order through iPage, and when the confirmation came through, I was reminded again of how things have been since June 15th, 2015; over three and a half years now. The letter we received at the time read:

Dear Valued Ingram Customer,

As with any business, Ingram must closely monitor our expenses and make adjustments when needed so we can continue to provide the speed, accuracy, and support that you’ve come to expect. Sometimes, as our costs decrease, we have been able to pass that savings on to our customers.

However, to cover increased freight and operating costs, we’ve found it necessary to explore and evaluate our discount structure. On March 31, 2016, all accounts that fell below $5,000 in net sales for 2015 will have a new discount structure of 30% on all regular discount items. Please note, this discount applies only to regular discount titles, regardless of quantities purchased or order method. All other items such as video, short, audio, etc., will continue to be discounted as they have been. Also, Ingram does review each customer’s account sales annually and offers volume discounts based on net annual purchases.

We truly value your continued business and appreciate your understanding in this matter. Please contact your Ingram sales representative or call Customer Care at 800-937-8200 if you have questions about this new discount structure.

Sincerely,

Ingram Content Group

Again, playing the freight-cost card is illogical because of the aforementioned single-title drop-ships they do for Amazon and Chapters.

It also doesn’t make sense that publishers like Oxford University Press or Wiley Canada don’t mind my occasional purchasing and are quite happy to grant us trade discount.

This time around, however, four of my titles were from Carpenter’s Son Publishing; a Christian publisher which is locked into Ingram Publisher Services. It occurred to me that they are probably unaware of the policy and unaware how it diminishes the amount of ordering stores like ourselves are willing to do in order to encourage their authors and increase their authors’ visibility.

It occurred to me that well organized information campaign with Ingram Publisher Services might accomplish more than trying to shake the monolith. I mean, for starters, how do you argue or appeal your case with a company for which you have no real contacts; no names; no faces? How many stores reading this have had even so much as an email from anyone in the marketing department at Ingram? How many of you can name your credit representative?

So over the next few weeks I will be tracking down those IPS publishers and hopefully beginning a dialogue as to why their Canadian Christian marketing and distribution should be placed with Parasource, or Foundation, or Word Alive.

At the time we received the original letter from Ingram I wrote,

I missed it by $448 net. Less than 10%. A target I didn’t even know I was supposed to aiming for.

Last night I found out the hard way that my store was one of the ones that didn’t buy $5,000 from Ingram last year. $4,552 was close, but no cigar.

The company has removed all accounts falling below this annual purchase rate to a 30% max. short discount on book product. But they’ve done it such a way that stores are unlikely to take the steps to remedy the situation; effectively terminating those accounts, albeit perhaps over a long, drawn-out period of time.

1. There was no warning. The letter went out on June 8th [2015] to take effect on June 15th. This shows the low view they have of their customers.

2. There was no way to remedy the situation. The period the numbers were based on was January 1, 2014 to December 31st, 2014. For nearly six months we had failed to meet a target we didn’t know existed.

3. Offering to buy the difference to pull this year’s balance up is futile because that product would all ship at a short discount.

4. The situation is confirmed as irrevocable; there is no room for appeal, even for those of us who missed by less than 10%.

In the Fall of 2015, I wrote:

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.

Then in March, 2016, I wrote this:

  1. Small stores often get large orders. The bookstore owner or manager in a small market who works to get a 100 copy order gets no reward for their efforts. All other distributors base the discount on the size of the order, an approach Ingram has constantly resisted. I have orders currently holding from a couple of publishers waiting for me to add a few more titles. I have no problem working with that constraint. Send the Light’s minimum is 20 books. I understand why they instituted that and it’s not that hard for me reach their quota. As I said the last time this happened, I probably use some of my university publisher accounts once every 2-3 years, but my legitimacy and entitlement to a trade discount is never challenged.
  2. Ingram is a victim of their own system.  I received a $3.99 booklet from them. I have no idea why they do this or how they can afford to. When I placed my first iPage order, I was told to “click DC Pairs and where it says ‘hold/release’ click ‘release.’” I did what I was told. If I could change this, no one has ever told me what ‘hold’ signifies or how it would help save costs at their end and save the planet. They say they are “constantly monitoring expenses.” Uh…no, I don’t think so. If they streamlined their operations at their end, such as merging backorders or running multi-order invoices, they would not have to penalize small stores like yours at your end. Relatively speaking, this is all about shipping costs. The actual picking costs are minimal by comparison and the cost of a small store using the website is infinitesimal.
  3. Ingram already ships to addresses buying less than $5,000. In this case I’m referring to the host of individual consumers whose orders to companies like Chapters are fulfilled through Ingram. I feel like when I do place a larger order, I’m indirectly subsidizing the inefficiencies of Ingram’s costs in filling orders for online competitors.
  4. This shouldn’t apply to Ingram Publisher Services accounts. When Ingram is the exclusive distributor of a particular imprint, they are making money twice over. For a small store, they are the only game in town, and even if you approached the publisher directly and were willing to pay any importation costs, that publisher is contractually bound to Ingram as its exclusive warehouse distributor. Personally, I find scaling back the discount with respect to those publishers somewhat reprehensible. 
  5. Canadian stores were forced to scale back. Christmas season [2016] purchasing from the U.S. was greatly curtailed when our dollar crashed. With Ingram, accounts are settled by credit card on the 15th of the month following, so there was the added variable of not knowing what Canadian prices to set because no one knew how low our currency was going to fall.
  6. Ingram has other options. They could change the minimum order on iPage from 10 to 15 items or set a dollar-value minimum. They could change the “low” discount threshold from $2.99 to $3.49 or $3.99. They could adjust discounts on hardcovers as Send the Light did. They could modify discounts on publishers where they feel they are being squeezed. They could scrap the “cascade” system and have stores meet a 10-unit minimum per warehouse. They could scrap the minimum order altogether and change it to a minimum shippable. (The last two involve some major system reprogramming changes, but this is about saving shipping costs, right? And the price of oil is going to turn around eventually and courier fuel surcharges will again go up.)

I concluded:

I want to make clear that while this is partly personal, I just think this particular strategy is bad policy. It’s bad for bookstores, bad for publishers, bad for authors and really bad for Ingram itself, since it simply makes everyone angry.

If my account is a drain on their bottom line, then they should put structures in place that force me to consolidate orders, or higher minimum orders.

In our Christian product sales sector of the larger market, people are often well-networked and vertically integrated. So if I’m talking to a new publisher or a new author and they have a choice between Ingram Publisher Services and Advocate Distribution Services, I think it’s obvious which one I’m going to recommend.

If anyone has a list of the Christian companies using Ingram Publisher’s Group, it would save us some time. I want to continue to fight this on behalf of other stores which may get cut off from full trade discount in the future.

Ingram Content Group Database Errors Continue to Amaze

Before they broke faith with our bookstore a few months ago, I would, at least once a week, send Ingram Book Group notifications about serious glitches in their database. I took the time to do this for free, sometimes to the benefit of an author, sometimes to help out a publisher, but always with Ingram themselves as the primary beneficiary.

Not any more. If they want to post nonsense like this about John Piper, I’m just going to enjoy the hilarity. Actually, their information is getting increasingly unreliable. But this one was too funny not to share. If you want to read it for yourself, it occurs in the second half of the ‘Descriptions, Reviews, Etc.’ for this recent Crossway book: 9781433550430

Piper Biography

So that explains the lack of hair? Didn’t realize he was so financial savvy.

By the way, not once did anyone at Ingram ever say thanks.

Ingram Suspends Full Trade Discount to Small Stores

Ingram announcement

March 31st represented the annual culling of the herd at Ingram, better known in the Christian market as Spring Arbor, as stores failing to purchase $5,000 in 2015 had their trade discount reduced to 30% on books. If you’re looking for a notice you missed, it may be because the announcement appeared as a “service alert” posted on the right hand side of iPage that you had to click to read in full:

ingramDear Valued Ingram Customer,

As with any business, Ingram must closely monitor our expenses and make adjustments when needed so we can continue to provide the speed, accuracy, and support that you’ve come to expect. Sometimes, as our costs decrease, we have been able to pass that savings on to our customers.

However, to cover increased freight and operating costs, we’ve found it necessary to explore and evaluate our discount structure. On March 31, 2016, all accounts that fell below $5,000 in net sales for 2015 will have a new discount structure of 30% on all regular discount items. Please note, this discount applies only to regular discount titles, regardless of quantities purchased or order method. All other items such as video, short, audio, etc., will continue to be discounted as they have been. Also, Ingram does review each customer’s account sales annually and offers volume discounts based on net annual purchases.

We truly value your continued business and appreciate your understanding in this matter. Please contact your Ingram sales representative or call Customer Care at 800-937-8200 if you have questions about this new discount structure.

Sincerely,

Ingram Content Group

So once again, it’s survival of the fittest. They didn’t even wait until April 1st, the policy is now in effect. Once again, I have some opinions on this, some of which I shared last year at this time.

  1. Small stores often get large orders. The bookstore owner or manager in a small market who works to get a 100 copy order gets no reward for their efforts. All other distributors base the discount on the size of the order, an approach Ingram has constantly resisted. I have orders currently holding from a couple of publishers waiting for me to add a few more titles. I have no problem working with that constraint. Send the Light’s minimum is 20 books. I understand why they instituted that and it’s not that hard for me reach their quota. As I said the last time this happened, I probably use some of my university publisher accounts once every 2-3 years, but my legitimacy and entitlement to a trade discount is never challenged.
  2. Ingram is a victim of their own system. Yesterday I received a $3.99 booklet from them. I have no idea why they do this or how they can afford to. When I placed my first iPage order, I was told to “click DC Pairs and where it says ‘hold/release’ click ‘release.'” I did what I was told. If I could change this, no one has ever told me what ‘hold’ signifies or how it would help save costs at their end and save the planet. They say they are “constantly monitoring expenses.” Uh…no, I don’t think so. If they streamlined their operations at their end, such as merging backorders or running multi-order invoices, they would not have to penalize small stores like yours at your end. Relatively speaking, this is all about shipping costs. The actual picking costs are minimal by comparison and the cost of a small store using the website is infinitesimal.
  3. Ingram already ships to addresses buying less than $5,000. In this case I’m referring to the host of individual consumers whose orders to companies like Chapters are fulfilled through Ingram. I feel like when I do place a larger order, I’m indirectly subsidizing the inefficiencies of Ingram’s costs in filling orders for online competitors.
  4. This shouldn’t apply to Ingram Publisher Services accounts. When Ingram is the exclusive distributor of a particular imprint, they are making money twice over. For a small store, they are the only game in town, and even if you approached the publisher directly and were willing to pay any importation costs, that publisher is contractually bound to Ingram as its exclusive warehouse distributor. Personally, I find scaling back the discount with respect to those publishers somewhat reprehensible. 
  5. Canadian stores were forced to scale back. Christmas season purchasing from the U.S. was greatly curtailed when our dollar crashed. With Ingram, accounts are settled by credit card on the 15th of the month following, so there was the added variable of not knowing what Canadian prices to set because no one knew how low our currency was going to fall.
  6. Ingram has other options. They could change the minimum order on iPage from 10 to 15 items or set a dollar-value minimum. They could change the “low” discount threshold from $2.99 to $3.49 or $3.99. They could adjust discounts on hardcovers as Send the Light did. They could modify discounts on publishers where they feel they are being squeezed. They could scrap the “cascade” system and have stores meet a 10-unit minimum per warehouse. They could scrap the minimum order altogether and change it to a minimum shippable. (The last two involve some major system reprogramming changes, but this is about saving shipping costs, right? And the price of oil is going to turn around eventually and courier fuel surcharges will again go up.)

In my community, a large, general-market bookstore is closing today. We put the word out to our customers that we would happy to take their orders on a variety of different subjects; not knowing our access to full margin on those items might be restricted. (At least I can do Hachette, HarperCollins, Wiley, and Penguin/Random House.) It’s more possible now that a store in my position (or a store that finds itself being given some larger orders) would have no problem meeting that $417 per month average. 

If you don’t know what your purchasing from them was in 2015, a phone call may be in order.

Sadly, for stores now facing a shorter discount, their relationship with Ingram vis-a-vis dollar volume, has now become a self-fulfilling prophecy.

It should be about the order, not a store’s performance in 2015.  


Update: I want to make clear that while this is partly personal, I just think this particular strategy is bad policy. It’s bad for bookstores, bad for publishers, bad for authors and really bad for Ingram itself, since it simply makes everyone angry.

If my account is a drain on their bottom line, then they should put structures in place that force me to consolidate orders, or higher minimum orders.

In our Christian product sales sector of the larger market, people are often well-networked and vertically integrated. So if I’m talking to a new publisher or a new author and they have a choice between Ingram Publisher Services and Advocate Distribution Services, I think it’s obvious which one I’m going to recommend.