5 Better Inventory-Management Tips for Book Publishers

Mike Shatzkin, founder and CEO of New York-based The Idea Logical Company, offered book publishers a number of tips on making more intelligent inventory-management decisions at the 2008 Publishing Business Conference in New York. A better approach starts with regularly collecting and analyzing data that is available to each and every publisher, he said.

“Most of the major accounts to which publishers sell will provide you with data that will enable you to know what’s going on between your warehouse door and the end consumer, if you choose to know,” Shatzkin said. “And that information can be very, very useful both to increase your sales and to reduce your inventory exposure.”

In the hour-long session, Shatzkin offered a wealth of advice to the room of book publishers. Here are just five of his tips from the presentation.

1. It is not the unit cost of what you print that matters, it is the unit cost of what you sell.
This advice, said Shatzkin, came from his late father. The point? If you print books that you don’t sell, you’re not saving any money -- an important thing to keep in mind.

2. Get weekly feeds from your major accounts.
Collecting this data once a month is not often enough, Shatzkin says. Be sure you’re getting the information on a weekly basis. Possessing this data from Barnes & Noble, Borders, Baker & Taylor, Ingram and Amazon can give you a sense of “a substantial percentage of the inventory that’s in the supply chain -- well north of 50 percent, because independent stores aren’t holding that much inventory anymore,” Shatzkin said.

3. Once this data is being collected and organized, analyze it.
First, examine by account what their sell-through is by title. Then, on a quarterly basis by account, look at stock turn and inventory by section for your retailers. Also, track both sales and stock on a weekly basis.

4. Identify spikes.
Identify books that are selling beyond expectations. Keep an eye out for those “fast movers,” said Shatzkin.

5. Identify future returns.
These are the books with high stock and low sell-through. Look at your top 25 books in inventory at Barnes & Noble and Borders. If you see, for example, 1-percent sell-through on a title, “you can be sure that that’s a future problem,” Shatzkin said. “You might want to start to address it early, and you certainly want to address it if your own warehouse is short of [that title] and you might be reprinting. So it’s a very important thing to watch both your highs and your lows.”