In the first part of this article, published in the March/April 2024 issue of the magazine, I told some stories about how my formal education at Denison University and the University of Chicago influenced my publishing career. You can read the article here. In the second part, from the May/June 2024 issue, I delved into my time at Northwestern University teaching in the English department, my first published book, the early years of Chicago Review Press, and my sidestep into real estate. You can read that article here. In this final installment, I talk about changes in the book industry and my thoughts on those changes. 

Big Changes in the Book Industry: The Mall and Chain Stores

In addition to learning the basic rules of the book business, and how to decide which titles to publish and which independent publishers to distribute, I had to learn how to deal with two very major changes in the world of books that occurred in the late 1970s.

The first change was the rise of the new mall bookstores. First Walden and B. Dalton began to gain market share, and then the big free-standing chain stores, Barnes & Noble and Borders, began to put hundreds of small bookstores out of business. These new kinds of stores drastically changed the world of bookselling. Before their arrival, the book trade was mostly made up of many very small stores, small even in comparison to a startup publisher like Chicago Review Press. These new, much bigger, players had central buying offices that ordered large quantities of books to stock many stores. They could and did command better terms from publishers.

Suddenly, Chicago Review Press was no longer big enough to stay in the game. A buyer at Barnes & Noble told me flat out that if we could not do over a half-million dollars a year in sales with them, they would not stock our titles. We had to somehow get bigger in a hurry.

I knew about a small company called Independent Publishers Group (IPG) that had been founded in 1975. This was the first company formed to put a group of small presses into one pot for warehousing, sales, marketing, and order fulfillment. Could this approach be scaled up enough to solve our problem?

I called the indispensable Jerry. He said, “Oh, that’s David’s company. I will give him a call.” He did call, and it turned out the company was for sale. In 1985, we acquired IPG by agreeing to pay David an override of a few percent of our IPG sales for four years. Since the Not Big Enough problem I was suffering with the chain stores was general across the whole small press community, there was no shortage of possible distribution clients. When we bought IPG, it worked with only six client publishers. Soon, instead of just six, there were 10, then 50, then 100, and finally many hundreds of independent publishers’ books were being sold by IPG, on an exclusive basis, into the US and Canadian book markets.

In 1991, we acquired a second book distribution company, Trafalgar Square. This company had the exclusive right to distribute the books of most of the major UK publishers into the US and Canadian markets. Soon we were receiving, every week, one or two large containers full of books shipped from London. The icing on the cake was when Random House/Penguin U.K., to my mind the most important English language book publisher in the world, joined the Trafalgar Square distribution program. And just recently Oxford University Press has come on board.

The Microcomputer Revolution

But perhaps the most important change that was about to transform the book business came to my attention as the result of a walk I took one day in 1982, in downtown Evanston, Illinois, a suburb of Chicago, where I live. I discovered a small store called the Itsy Bitsy Machine Company that had in its display window an IBM Selectric typewriter typing at high speed with nobody pushing the keys. I immediately thought of the two women in my office who spent all their time typing out invoices and statements on continuous three-part carbon forms, hundreds of yards of them. I stepped inside the store and chatted up the owner, who turned out to be very sharp about the affordable electronic equipment that was just starting to come down the pipeline. At that time, mainframe computers costing millions of dollars each were being used by some huge corporations, but the age of the affordable microcomputer was just dawning.

I did some research and discovered that there was one microcomputer, the Televideo, that seemed to be powerful enough to support the data processing I imagined my company was going to require. It had 16k of memory and a hard drive, in a separate metal box that measured two feet on a side, that could handle a grand total of 5 megabytes of data. It cost $30,000, 10 times more than a modern PC with vastly greater power.

But what a difference it made! It came with a program that could competently handle electronically many of the most difficult and time-consuming business challenges that we had been doing on manual systems: customer accounts, invoicing, statements, and perpetual inventory. And it also came with a little book of instructions about how to program in Basic. I read the book and wrote two programs that actually worked. Then I noticed that I had paid no attention to running my business for two weeks and understood that if I didn’t return to my real job, my company would go out of business. I hired a real programmer.

This early adoption of the electronic approach to collecting, analyzing, and distributing data was enormously important to the future success of the company. As we grew, we added new departments: marketing, publicity, advertising, design, in-house catalog production, e-book creation and distribution, print on demand, and finally even human resources. Each of these new departments was built from its inception on a digital foundation.

Here is an example of the magnitude of that change: In the early days of the company, we employed three people to generate the paperwork to enter orders and ship them from the warehouse. Currently, the number of orders we process is many orders of magnitude greater than it was in the old days. How many order-entry people do we have now? Three. And we never had to go through the wrenching transition from paper forms to computer processing that threatened the very existence of many companies.

Clearly book publishing and distribution were businesses that could especially benefit from the computer revolution. A company that makes widgets sells perhaps six different kinds and markets them through a distributor or two. A book publisher produces a whole new line of titles, new products, twice a year, keeps most of its previously published titles in stock, and sells and ships directly to hundreds of bookstores as well as to three or four distributors. Even a small publisher has a lot of balls in the air.

I think this is why Jeff Bezos started up Amazon as just an online bookseller. His early vision for Amazon was to keep in stock every book in print from every publisher, a tall order and good practice for the later version of Amazon that would have on its website, and in its warehouses, at least a few units of every non-perishable product available for sale in the US. I got a call from Mr. Bezos when Amazon was a startup. He asked if he could use his personal credit card to pay for his initial stock of our books. I took a bit of a credit risk and said “Sure.”

Chicago Review Press and its imprints now publishes about 250 new titles a year and has an active backlist of about 1,500 titles. IPG is now the exclusive distributor of roughly 10,000 new titles per year published by many hundreds of independent presses. We currently stock in our warehouse about 10 million books made up of about 50,000 different titles. We have just over 200 employees, and we service almost 10,000 book accounts. Our digital warehouse makes 300,000 e-books easily downloadable for our customers. We print or reprint over a million copies of books a year on the print-on-demand equipment in our warehouse.

Without the support of cutting-edge technology, a business like ours—with that many moving parts—is simply unimaginable. During the period IPG has been in existence, four book distributors, two of them bigger than IPG, have gone out of business, primarily, I think, because they failed to make the transition into the digital world.

IPG After I Retired

About 15 years ago, my two sons joined the company and began to work their way up from low-level jobs in the warehouse to the top executive positions. Joe Matthews had a previous career running a recording studio and a record label. This work relied very heavily on database technology, and he had to learn how to be a marketer. He was making good progress until the whole music business crashed when everyone discovered that the internet made it easy to download music for free. He is now the CEO of IPG and is very busy adding English book publishing and distribution groups to IPG.

After college, Clark Matthews got a master’s degree in computer “usability” from the University of Michigan. The idea of this degree was to help programmers create computer applications that would feel intuitive to their non-geek business users. He worked for five years for Microsoft. His main job there was to explain to the Microsoft management why their applications were not as user-friendly as the ones Apple offered. At IPG, after his time in the warehouse, he was put in charge of developing new digital capabilities. For a few years, he employed a group of programmers in Ukraine to write the new applications we needed. Now much of the programing is done by Clark and his in-house staff.

The programing and marketing skills these young men brought to IPG are now absolutely obligatory for success in the modern world of book publishing; and in that world, these skills are still in very short supply.

Some Broad Generalizations

Do I have any broad generalizations that can explain why some people are successful in the publishing business and others are not? Here are a couple of possibilities. I don’t believe successful publishers are single-minded. That surely does not describe my way of using my head. Creativity is often a question of putting two seemingly incompatible ideas together in a way that offers a new insight. Good thinking almost always involves pitting one idea against another one, or dropping a questionable idea into what might seem to be an irrelevant context to see if it can swim. A single, free-floating idea is never of much use.

And clearly people who are sure that one big idea can explain a complicated issue are just wrong. “Smaller government is always better than bigger government?” “Money is the key to happiness?” “A CEO has no responsibility to anybody but his stockholders?” Books given to children should never contain words or ideas that are unfamiliar to them?” All these propositions are simple-minded.

Here is an example of the intellectual process that I am trying to explain. That last weird prohibition cited above, that kids should never be exposed in a book to unfamiliar words or ideas, was holy gospel to the education establishment for decades. But isn’t learning by its very definition a consequence of encountering the new? Don’t we have to risk upsetting the little ones every now and then to get them thinking?

In its early years, Chicago Review Press began an innovative series of books intended to strongly challenge young readers. There are now over 100 titles in our series, and many of them, 10, 20, 30, or 40 years after their first publication, are still selling well. Here are the titles of some of them: Frank Lloyd Wright for Kids; World War Two for Kids; Albert Einstein and Relativity for Kids; Africa for Kids; and yes, The History of Gay Rights for Kids. The content of these books is always aimed well over the heads of the kids who read them. As they should be.

My big single idea that explains everything is that success in independent publishing requires a sort of double vision that easily perceives incongruity, that questions the inevitability of the current received wisdom, that knows how quickly one idea can morph into a different one, or even its opposite. It is always on the one hand this, on the other hand that. Nothing important is ever single-handed or single-minded. My success, and the success of most of the independent publishers I know, has come from an ability to spot early—and to welcome—the incongruities and contradictions that precipitate change. Why is this skill so important?

Change always stirs up opportunity, especially in the business of books. All those thousands of new titles every year, new subjects, new authors, new trends, new formats, new ways to reach the market, keep the publishing pot boiling hard. Successful publishers react to change quickly and aggressively. A publisher who is afraid to act until all the information on some new development is in and confirmed will miss the boat. Successful publishers are not afraid of new subjects, new formats, new voices for books, and they are early adopters of new business models and technologies. They stay well ahead of the pack.

I hope that some of the ideas I have presented in this essay will be of interest to aspiring publishers. However, I also hope I have made it very clear that good luck had a lot to do with my success. There is nothing quite so helpful as finding oneself in the right place at the right time. Still, you need to know how to grasp good luck when it turns up.

What’s New Right Now?

POD equipment has changed the way independent presses should think about print runs. Most publishers still believe the first printing of a title must be thousands of copies, done on an offset press, to get the cost per copy down low enough to make a reasonable profit. Now, however, large first print runs only make sense for titles that have a well-established author or a hot subject, neither of which is usually the case for titles published by independent presses. Big first printings are always risky. Far too often they result in their publishers’ capital being tied up for years in unsold copies languishing in the warehouse.

With POD, the first printing can be just a bit more than the advanced orders for the title, usually just hundreds of units rather than thousands, at a unit cost higher than an offset run but still quite reasonable. Once the rate of sale has been established by the marketplace, informed reprint decisions can be made. If hard orders indicate you have a hot book, you can do a big offset reprint run. If not, you can keep the book in stock with modest POD reprints. In either case, you have greatly improved the odds that your book will be profitable.

Also, books that are out of stock for even a few days are now often dropped from the records of booksellers and wholesalers and become effectively out of print. POD now makes it possible for IPG to never let a title it publishes or distributes die in that way. Among the million copies we print every year on our in-house POD equipment, there are many hundreds of titles reprinted in quantities ranging from just a few copies to a few hundred.

What’s Next?

Keep your eye on artificial intelligence.

---