Episode 48: Jason Brockwell on “Distribution in the Digital Age”

Jason Brockwell is the President of National Book Network, one of the largest independent book distributors in the United States. With titles in nearly every bookstore category, NBN has helped a broad variety of publishers with their distribution needs since its founding in 1986. Before becoming an executive at the company, he was a national account manager calling on several large customers including Amazon and Barnes & Noble for NBN and also worked as a field sales rep in the the Southeast and Mid-Atlantic regions.

This episode of the BookSmarts Podcast was recorded live at the 2024 Publishing Innovation Forum. Jason Brockwell attended the conference to lead a discussion on “Distribution in the Digital Age: Supply Chains, Marketing, Sustainability, and More”. We appreciate Jason allowing us to record this session and replay it for you on our podcast! Jason discusses how National Book Network helps publishers, how COVID has (still) affected the distribution industry, successful digital strategies for distributors, sustainability concerns, and more!

National Book Network is an independent and full-service sales, marketing and distribution company serving book publishers from around the world. Click here to learn more!

Transcript

Joshua Tallent
So I am very excited we get to talk about distribution in this session. So Jason Brockwell from NBN National Book Network. Jason, why don’t you give us a little bit of your background in publishing and NBN tell us a little bit about what you do.

Jason Brockwell
Sure. My name is Jason Brockwell. I’m the President of NBN, National Book Network. National Book Network is a full service distributor. We’ve been in business for about 40 years. We have about 100 distribution clients, more or less. And in terms of categories, we’re mainly Adult Nonfiction, so I’d say that’s probably 80% of our catalog of publishers. And then we probably, you know, 10% kids, 10% fiction in that product mix. Our largest clients do north of $20 million and we have clients who, you know, maybe do 1,000 or two. So we’ve got a broad range of publishers that we represent. In terms of what we’re looking for as a full service distributor in that space, we tend to look for, we say publishers with five books, but we’ll take publishers with less, as long as there’s sort of a forward plan and vision moving forward. But we tend to think that sort of small plus publisher in that range is kind of our sweet spot. In terms of my background, I started at NBN not far out of college. I had a small, short stand as a newspaper journalist for about a year or two before I decided I didn’t want to cover the local boy scout troop meeting and decided to make the jump to the glamorous world of book publishing. I started out as a sales assistant at NBN and eventually moved to becoming a rep, started selling Crown Books which people may remember, and then Borders, also eventually went out of business. I’ve called on Amazon, Barnes and Noble, managed field territories, called on independent bookstores, regional accounts, and eventually, as one does, take on more responsibility, and most recently, President of the company. As I mentioned, we are a full service distributor, and so what that means for us is that we are taking and processing orders in from customers, either via EDI or other electronic means. We have a customer service team that’s processing orders coming in via email or phone or being submitted by our sales team. We have a warehouse facility, so we typically bring inventory from our publishers in on consignment, and then we pick pack process the orders, and we have an accounting team that chases down payments from customers. We as part of that service, we do guarantee the receivable for our clients. So whether a bookstore or customer is paying us, we make sure our clients are getting paid. And so from a cash flow perspective, that can be very attractive to publishers. We have a dedicated in house sales team. What that means is that we have a core group of reps that are just selling our client titles. They’re selling into the big Amazon, Barnes and Noble other big national accounts. We’ve got reps dedicated to special markets, so non-book retailer, some specialty wholesalers. We have field reps as well, and then we do utilize some outside rep groups and gift rep groups to basically have boots on the ground in all 50 states. And the importance of a dedicated sales team to our clients is that our reps are able to provide estimates, feedback from the market, just as if they were part of the publishing program of our clients, and it can help get feedback from the market to adjust price, adjust coverage, adjust package. It can better insight into what the initial print should be for title by providing those initial estimates. So we think that’s a really valuable service that we provide. We also do basic marketing functions. So we do a seasonal catalog, two seasonal catalogs with print and digital. Edelweiss is an increasingly important tool for our customers and our sales team as well. We go to industry shows represent our customer titles there. We also facilitate different kinds of marketing and merchandising opportunities that our customers provide, including digital advertising on Amazon and those kind of opportunities, in addition to the sales and marketing, we also offer other publishing services. The biggest for us is probably Print on Demand. We do have a print shop in our distribution center. We were one of the first distributors to do that, and it’s become an increasingly important part of our business. We also offer ebook distribution conversion services. So it’s kind of a full suite of publisher services; it’s what a full service distributor does. Our comps certainly would be IPG, Ingram publisher services and others like that. Different models of distribution for sure. Some do sort of outsource the pick pack part of it. We work with distributors who we’re doing the back end for them, and they really focus on the sales and marketing for their clients. And you know, there’s just a lot of varieties and choices that you have in that space. But I think for many publishers, just having that full service option is really compelling.

Joshua Tallent
Yeah, so you said most of your list is your publishers are nonfiction. Trade publishing. Describe a little bit more about that. Is that a focus that the organization’s always had. NBN has kind of always focused on that. It’s kind of worked out that way that most of the people that come to you are are nonfiction. How does that work?

Jason Brockwell
Yeah, I think so. I think it’s probably, it’s just sort of a historical thing. It’s not that we don’t do fiction. We have, you know, certainly have some strong fiction publishers and some great children’s titles on our list. But I think just in terms of the profile and just sort of historical circumstances, I think it just, you know, it’s kind of how it went with us, and I think, you know, partly too, our parent company itself, a publisher, is mainly focusing on Adult Nonfiction space. So, you know, we’ve built out our sales team and capabilities, marketing capabilities, and things. It tended to favor that for sure.

Joshua Tallent
Okay, so let’s dive into some distribution related questions, and we’re going to talk about COVID just for a brief second here. So just curious about, are we done with the aftermath? Do you feel like we’re a couple years past all this stuff but in general, in the distribution space, how do you feel things are coming out of that time period?

Jason Brockwell
You know, a lot of ways. Yeah, 2014 is 2019 all over again. I think things have settled out. When I think about sort of the market disruptions, the spikes and sort of chaos that the pandemic caused, I think about two categories, one that immediately benefited and one that immediately took a nosedive. Both important categories for us. One, international travel, for obvious reasons, you know, went straight down. And those publishers immediately were in sort of an existential situation to survive and it took a while for that to come back. It started to come back a little bit in 22, really came back in 2023 as people had the confidence to travel again to Paris and all the great European destinations and Asian other international destinations. But it took a while for that to come back, and it was probably the category that took the longest to recover through the pandemic period, but it feels like it sort of settled back to pre pandemic now, and to the extent it has. It’s mainly because publishers weren’t able to develop new product revisions through that period because of all the uncertainty of when things were going to come back. On the other hand, our outdoor segment, nature guides, hiking guides, took off pretty much immediately during the pandemic, because people were looking for activities that weren’t going to be super spreader events, and getting out into the nature was a good way to do that. And that, you know, we saw a real rise through 21 and 22 and then start to come back down and now, you know, basically back to 2024 levels, as the people that were sort of more casual, looking for an alternative, as they weren’t spending as much money on international travel and other kinds of entertainment. We’re sort of reverting back to mean there. So I think that, you know, we sort of seen that work its way out, both good and bad at this point. In terms of kind of the permanent things that I feel like our customers and our publishers are dealing with as sort of pandemic aftermath, the things that have jumped to mind for me, pricing, upward pressure on prices, you know, particularly, I think we all know, you know, the cost of freight, the cost of print, cost of paper, staffing costs, all of those things went up and put real pressure, you know, on prices or pressure on margins if publishers were resistant to raising prices. But, you know, conversations that I’ve had with publishers who, you know, can we raise the price? Should we raise the price? Advice has been generally, yes, you have to, given what’s going on, but it’s a challenge. Joe Matthews, IPG, made the same case and mentioned making the same case at a conference. A bookstore chain buyer came up to him and said, you know, be careful with that advice, because, you get up over $20 for certain categories, like a children’s book, being a buyer, being in this case, may choose a different book, but choose to go and do a Netflix subscription versus buying a book for that value. On the other hand, there’s certain categories. We do a lot of fly fishing books, and that’s a fluent audience. And whether it’s $40 or $45, that is not going to be the decision making factor. It’s going to be the author, it’s going to be the subject, it’s going to be the quality of the content. So, I think, you know, publishers are wrestling with that in different ways. But, the feedback that we’ve gotten from customers is that, you know, publishers are generally having to make upward, increase their prices and move that upward. And, you know, those sort of old breaks that we used to think about, you know, 14.95 19.95 24.95 29, you know, having to sort of move past those just because of those pressures, and certainly customers who are dealing with increasing cost of supplies, labor, transportation, customers free to link is a great example. Their CEO has been very public that publishers should be raising their prices. They aren’t keeping up with inflation and margins are being increasingly reduced because, you know, prices are not keeping up. And again, there are obvious countervailing forces to that, and there’s a lot of art to deciding what the right price is. And sometimes the feedback we get is, well, maybe it’s not going to hurt the initial advance when you can get into the marketplace, but, what’s the impact on sell through? So a lot of things people have always wrestled with, but I think it became a lot more acute coming through the pandemic. The other thing that we wrestled with, both as an organization, as a distributor, but also just in dealing with our customers, and I think everybody has done that sort of push pull between in person versus virtual. And for us, during the height of the pandemic, everything became zoom or teams and phone calls. When it was safe or felt safe, we”re certainly encouraging our team to get into the field and reestablish those in person contacts as quickly as possible. And very proud to come back and say, oh, the first record, you know, the fire had seen since the since the pandemic, and making those early connections, and, you know, things that are important, take the buyer out to lunch and do those things. And helps the rep kind of break through the noise, identify titles, maybe call in a favor, those kinds of things that you lose on doing it via zoom. On the other hand, you’re not traveling four hours. You save those travel costs. There are really compelling ways of doing a virtual meeting, particularly with Edelweiss, information available there, a lot more than you ever get on a print catalog can be a very efficient session. Rep can potentially call on more customers virtually so that push pool sales conferences, list launches those things, in person versus virtual. You know, all virtual, for a while, we’ve sort of settled on doing sort of half and half half virtual. Half in person, trying to get the best of both worlds. But it’s been a, it’s been a struggle, and just trying to figure out what that right right balance is, I think, for sure. And the third thing that I think that in a big subject of many of the sessions here, I think a real increased interest and in going direct to consumer and internet retail, for sure, publishers trying to own their audiences. I think one of the flashpoints of that was when Amazon decided that, not that they decided, they had good reasons for it, but books were non-essential items, and basically stopped ordering. And for most publishers, obviously, Amazon is their biggest customer, and so when they stop ordering, you know, it very quickly becomes a very big deal. And figuring out how to work around Amazon and get directly to your consumer, I think, became a bigger issue. And the tools that publishers have make it a lot easier now, at least parts of that owning that audience, and on the retailer side of it, we have a lot more retailers who are interested in getting better at internet retail that maybe had some capabilities, but hadn’t really sort of pushed on it, and more focused on, you know, the store experience rather than Internet.

Joshua Tallent
I imagine the packing and shipping part of that, for a publisher who’s going direct to consumer, trying to build a direct to consumer program, that’s the hardest thing, right? If they’re working with a distributor like you, then they need your help to do that so that individual, this EDI order comes in for one item or something.

Jason Brockwell
Yeah, it’s a very different business. I mean, I think, you know, I think it’s probably true. You know, most book distributors, it’s warehouse is set up to be a B2B business, and the automations that you develop, you know, are built around book industry standards. When you start doing direct to consumer, yeah, it’s a lot more individual picks. The way that you arrange your forward pick locations is much different, and you need a lot more to be able to service the customer. The direct to consumer business tends to be everything’s a rush, you know, because everybody’s competing with Amazon and so there are requirements around that, and then, when you’re getting into sort of a non-book space, well, there’s sometimes different labeling requirements. Some cases, customers may want basically white labeling, you know, they want their brand on the box of the label in terms of how they’re wanting to deal with that. And certain requirements, they want to protect their customer and make sure their customers have the best experience, the best experience of the brand. So understandable reasons, but it definitely puts additional strains on the warehouse, and the more you do that and create sort of manual interventions, the more likely it is to back up other orders that are also important. So, yeah, it’s been a real challenge and balancing act as we think about investments in future. You know, it’s about servicing that customer better and having more capabilities to do both well.

Joshua Tallent
What do you think the competitive pressures are on distribution right now, and even broader than that, in publishing and publishers and how they’re dealing with things. What’s the competition that you’re seeing, kind of pushing in on this space?

Jason Brockwell
Yeah, I’d say that the biggest competition, I think, is this scale. I think, you know, Penguin Random House, Simon and Schuster, Ingram bring a scale that has, you know, I think it’s been good for the industry, good for publishing, and it’s brought down distribution costs because of the scale that they can bring. And that, in turn, is, you know, other distributors, like NBN, you know, had to respond to that and compete with that. I’d say that’s probably the biggest thing now. And you know that scale, that size, enables those publishers to invest in, you know, automation systems that, you know, are tough if you don’t have that scale. For us, I think other distributors that may be in that sort of middle tier, you know, we find other ways to compete. We don’t have quite, you know, oh, they have 700 clients; how are you ever going to get any attention in their bag, or we have a much smaller range of clients that we service, we can give books more attention? Often when you get into working with companies that have that huge size, they were sort of very strict on the requirements and what they require in terms of receiving how a book, you know, pub dates and when the book is received, and those kinds of things, special packaging requirements, they may be less inclined to do, processing back end returns, those kinds of things, so more bespoke kinds of things are, I think, where smaller distributors can compete and get into certain niches in the market where we can just offer a superior service than maybe some of the bigger guys can do. I think that’s probably the biggest thing on the distribution side. On the publishing side, I’d say, what I hear from publishers is that what they’re competing against, increasingly, is authors who may have written a book now becomes a series of newsletters or becomes a blog post and tracked it to them, because they monetized it, they can get it to market quickly. They can get 70,000 hits with that, and, you know, a book, it’s going to take a lot longer, and sales may seem modest in comparison to that sort of engagement that they’re seeing in other places. Think of self-publishing platforms. So authors, if they’ve got an audience and own a audience, they can, you know, they’ve got a lot of choices there to work around a publisher. Amazon and others offer offer solutions so I think that’s been a real competitive pressure, self publishing, hybrid publishing, and authors working directly. And then, you know, I think as publishers, more and more try to own their audience, their communities, and are better at being able to drive that demand. There’s certain places like their own website, where do the retailers fit into that equation? I think publishers, generally speaking, are happy to spread the wealth and offer a lot of different buy buttons, but the choice is driving to website where you’re not having to offer a discount or pay a distribution fee, you know, I think that becomes more compelling. And I think as that grows, certainly would be something that I think retailers will begin to notice more and more, and maybe come more and more attention over time.

Joshua Tallent
Okay, so let’s talk about sustainability. What are you doing to help publishers address the issues of sustainability? We had a session yesterday about sustainable practices. Obviously, printing is something that comes into play in this, even design and layout and things like that. So how are you guys at NBN and how do you think in general distribution can help a publisher do better with the sustainability initiatives that they have internally?

Jason Brockwell
Yeah, you know, the biggest thing that we we can provide, I think, to our publishers, on that front is, I mentioned before, we have a print shop in our facility so we can do digital printing there. And obviously that reduces transportation costs to get books to the facility. Typically when we set up a title for print on demand or digital short run in our facility, we’re also encouraging our publishers to set it up with LSI so Ingram wholesale can fulfill their orders, and we’ll set it up with Amazon so they can fulfill their orders, and if their international rights can set it up in those markets, at those places as well. Sometimes relationships that we form, we can print in territory. So we can print in the UK. We speed to market. Need to get something there quickly or just to reduce overall cost of moving that title around. And then for in terms of shipping and consolidation, we consolidate all of our client publisher shipments to the UK. We do warehouse inventory in the UK, and have a five person team there selling into that market. But, you know, able to consolidate the shipments and include that in sort of our overall base terms so publishers aren’t occurring that additional freight costs. And, you know, the consolidation certainly is saving there as well. I think it’s been interesting. I think, you know, coming from the customer side, we have been…REI particularly is one that’s really pressed us on sustainability, and they have made a lot of effort and outreach to their vendors, making sure that the vendors are measuring their carbon impact and having plans to reduce that over time, and made it clear that they want to work with partners who are serious about that and taking steps to reduce their carbon footprint off of a base year, and having a plan forward that sharing with REI about how they’re going to reduce the carbon impact and help REI, you know, reach its goals for carbon reduction. So, you know, we’ve had to spend a lot of time thinking about how we do it. And POD is one of the big ones you mentioned, you know, typesetting and smaller books and either smaller formats, or, you know, being able to come up with smaller page counts is an important part of that as well. And then you know, obvious things, you know, flexible office environment, less commuting time. So, less printing of marketing materials, more electronic kinds of things. So, you know, there are things that sort of normal business practices that you’re doing, you can kind of say, okay, yeah, this is leading to reductions, but it makes you think of other things that you can do as well. And it’s certainly challenged us in that way.

Joshua Tallent
So on the printing side. Part of the industry here in the US has been there’s some consolidation that’s been happening. Some presses being bought and even shut down, and things like that. How does that impact, that push for sustainability, that the availability of four color printing in the US, for example, and things like that. Is that impacting your customers, and how do you address those needs in an ongoing basis?

Jason Brockwell
Yeah, I mean, I think, you know, the biggest thing that I think a lot of our client publishers were dealing with, during the pandemic, where we sort of got the height of the paper shortages, and where there just wasn’t printer capacity. It was taking forever to get print time. I think there is where we could help. Sometimes with offset printing, we will work with publishers on our contracts with publishers. So we do a lot of print on demand digital printing, but we work with a number of offset printers as well. And so we’re able to bring our client publishers where they were having challenges where, you know, maybe we could get time on press because of our volume that they would have a harder time doing. In some cases, also, you know, drive their unit cost down just because of the volume that we can bring to that equation. But it was a challenge in it, you know, the other part of it is just shopping around, looking for new printers, whether it was in South Korea, Malaysia, Singapore, Taiwan, India, you know, looking for different options and bidding projects out. And yes, sometimes it’s just, depending on the book, Full color book, it’s cheaper to print in India and ship it back here. Just the reality of it.

Joshua Tallent
Yeah. So what about digital let’s talk about some digital strategies that you’re seeing publishers, your clients, pursue. What are some of those things that you think people in the room might want to be interested in looking into more deeply?

Jason Brockwell
Yeah. I think you know, one of the things that you mentioned in the last session, and a publisher is a content creator. And you know, what are some other things that we’ve seen publishers get into around their books? And probably the biggest thing that comes to mind for me is online courses. So we had a business publisher and a craft publisher that we work with through the pandemic launched online courses based on books, based on, you know, their authors would write the course and teach the course, but generate a lot of success with that. Obviously, they’re doing it on their own platform so they own the audience. They own that customer, and it’s a way to extend the experience of the book, monetize that experience, and I think both have been really successful at doing that. Certainly YouTube, you know, monetizing ad revenue, and those kinds of things publishers have done. Publishers get into podcasts and have their own podcast and generate revenue or demand for the books from that. It’s been interesting to see. I think digital printing, you know, we’ve mentioned it before, but I think that’s been another, more and more interested in that, extend the life cycle of the title for sustainability reasons, speed to market, those kinds of things. Digital Advertising, particularly Amazon, has become a bigger and bigger thing, and we’ve got more and more of our publishers interested in that, using that, and, you know, successfully driving demand and sales on Amazon. It’s great because I started in the business and Barnes and Noble, Borders others, you know, you’d buy a front of store or in cap or something like that, you’d spend 1000s of dollars and hope everything broke right in that two week, four week period. Whereas with digital ads, you know, the cost of entry is minimal, and you can scale up, scale down, depending on the success of it. So I think that’s something that’s been a real game changer for a lot of publishers. I think the other thing is just metadata in general. I think it’s been a constant theme and subject here. But really going back, looking at the backlist, improving descriptions, proving keywords, looking at BISACs, thema coding, those kinds of things and really improving the listings. A plus pages, those kinds of things go along with that. The other thing that we’ve seen more interest in are subscription models, Kindle unlimited scribs, some of the, you know, cost per click Programs that some of the digital hoopla overdrive, more recently, do or patron-driven acquisitions in the academic space, what’s the right use of those programs? I think we’ve generally been pretty conservative in our advice on that and sort of keeping it to back list and monetizing backlist. But, some publishers have experimented with newer titles and found success utilizing those programs. So on the other hand, you know, I know at least some of the big five are definitely afraid of those programs and subscription models in general. And so, yeah, it’s just, it’s a struggle there, how to utilize them. But I think there is a place for it, in my opinion.

Joshua Tallent
Yeah, there was an interesting conversation yesterday. Michael Tamlin brought that up, that subscription model up, and he was talking about how they saw KOBO. They weren’t taking away, they weren’t cannibalizing their ebook sales. They were just, you know, it’s a brand new market. It’s new people who would otherwise have been buying a subscription to something else, but now see the value in having the subscription that they’re doing. And publishers can react to that in different ways. You know, putting certain books available in the subscription model that maybe you don’t have them in there the whole time, maybe just swap them out, or you have other, it’s only certain types of backlist, or it’s, you know, other things that are kind of trying to help the marketing of those titles. You don’t have to necessarily put everything everywhere right. And taking and taking advantage of different models can help you assess as a publisher or as a distributor, and what the approach needs to be, you know, and how to address the new things that are coming out. We have to be careful about being too much of a luddite in our industry, right? We have to adapt. That’s what, the whole theme of this conference, is adapting to change. So how do we adapt to changing realities and to new ideas and how do we test those ideas and vet them and see which ones actually are good for us and which ones aren’t? Because there are certain things I’m sure that are going to be bad for publishing. There are certain things are going to be just bad for a publisher, and they’re going to say that’s not good for us. It doesn’t work for us. It doesn’t work because it doesn’t actually increase our sales, or it doesn’t work because it actually cannibalizes or causes problems for us as an individual publisher. It may be fine for somebody else, and that’s a testing process that publishers, I think, need to go through to engage in that testing on a regular basis.

Jason Brockwell
Yeah, for sure, I think, you know, it’s been our attitude, you know, experiment, test it out, small test works, and you can build from there. And if it doesn’t, then you haven’t, you know, wasted that much. So, yeah, it’s a great attitude and great approach.

Joshua Tallent
That’s it for this episode of the BookSmarts Podcast. If you like what you’ve heard, please leave a review or rating on Apple Podcast or Spotify or wherever you listen to the podcast, and also please share the podcast with your colleagues. If you have topic suggestions or feedback about the show, you can email me at joshua@firebrandtech.com. Thanks for joining me and getting smarter about your books.