Monthly Archives: May 2008

It’s Too Late, Mr. Riggio!

Steve Riggio, CEO of Barnes & Noble, calls the business model entitling bookstores to return books to publishers for full credit “insane” and he hopes to find a solution to a century-old practice “in a year or two,” according to an item by Jim Milliot in PW Daily.

Now you tell us, Mr. Riggio?

After bookstore chains used returnability to drive countless publishers to their knees? After bookstore chains employed returns to “buy” new books for little or no cash by dumping slow-moving stock on publishers’ doorsteps and using the credit as currency? After bookstore chains spurned remaindering in place because it was cheaper to send books back to publishers than develop creative solutions to the returns problem?

Mr. Riggio criticizes returns practices as “expensive.” Perhaps he means it’s become expensive for the chains now that publishers have been squeezed so ruthlessly they have nothing left to give.Has it begun to dawn on executives like Mr. Riggio that, as powerful as the chains may appear to be, they are just another brick and mortar operation doomed to disintermediation by the Digital Revolution?

So, now you want to end the consignment model of book distribution? Sorry, Mr. Riggio. The monster created by bookstore chains has the industry by the throat and will not let go. Returnability may be archaic, wasteful, stupid and fraudulent but publishers, bookstores and consumers are addicted and nobody is going to give it up. Not now, not ever.

You’re welcome to try to reform the old business, Mr. Riggio, but that’s no longer where the game is being played.While bookstore chains have battened on the consignment system, a new, virtually returns-free distribution model has arisen based on Internet fulfillment, prepaid orders printed on demand, and on e-books, a format that Mr. Riggio’s company abandoned years ago.

“Once a new technology starts rolling,” said Stewart Brand, “if you’re not part of the steamroller, you’re part of the road.”

Seek a solution to returns? Be our guest, Mr. Riggio. But we have news for you: it’s too late. The steamroller has arrived.

– Richard Curtis