Tactics for a Better Bottom Line

by Steve O’Keefe
(April, 2004)

When Pam Art left her job as managing editor of a local newspaper to become an "editorial traffic cop" for Storey Publishing as a startup, her husband presented her with a hard hat and whistle. Twenty-one years later, the hard hat is still in her office, only now it’s used when she’s mining data. As president of Storey Publishing, Art spends her days digging through the company’s financials looking for trends. In this interview with PMA, she uncovers a few jewels other publishers may find stunning.

Storey Publishing has a down-home, country-living, folksy persona–but don’t let the overalls fool you. Today, Storey is a major publisher employing 48 people and the latest technology in the production, distribution, and sales of more than 400 titles. The company is much like the building it inhabits: a restored 19th-century textile mill that’s Victorian on the outside and contemporary on the inside. The building is also an incubator for high-tech startups and home to the Massachusetts Museum of Contemporary Art. It’s a marvelous blend of history, art, and technology that suits the savvy publisher with the country accent.

Storey’s roots truly run deep. The company sprouted from the marketing department of Troy-Bilt, a manufacturer of rototillers. Troy-Bilt cultivated sales with books and pamphlets showing people all the wonderful ways to use their tillers. When the company realized its publishing division wasn’t exactly a profit center, they transferred the line to employee John Storey. He lured his wife, Martha, and Pam Art away from the newspaper they worked at, and Storey Publishing was born.

Storey is still loyal to those roots, publishing such classics as How to Make Your Own Motor Fuel, which Art says is "remarkably similar to making Jack Daniel’s." You can understand the appeal to backwoods farmer types. This explains one of the company’s profitable editorial lines, Beer & Wine, which is dominated by how-to guides for brewing potent potables on the back 40.

Immersed in Eight Niches

Most successful publishing companies are built in a narrow niche. Storey is like eight successful publishing companies wrapped into one. "Our editorial department is divided into eight lines," Art explains. "There’s an acquisitions editor in charge of each line. Part of what makes us strong is that the editors are immersed in their niches. Our equestrian editor rides horses. Our gardening editor has a green thumb. When editors attend trade shows, they’re more likely to be knitting shows or livestock shows than BEA or some other book trade show."

Just as Storey mines these niches, Pam Art mines the data the company generates. "Our acquisitions editors are working on our future," Art says. She’s looking at the past and the present with an eye on the future. And the past has been very good to Storey: "Backlist accounts for 90 percent of our sales." Asked if this golden mountain allows the company to take more chances, Art replies, "No. In fact, we take fewer chances than we used to. We’ve trimmed the number of titles we publish each year from a high of 72 to 40, and our standards for each title have risen. We have raised the bar."

Looking at the past, Art realized that the company had too many side projects to concentrate effectively on its core business: books. "John and Martha had a publishing business, a packaging business, a direct mail company, and an ad agency. When they sold the company to Workman two years ago, we decided to focus our energy on one mission: to be a great publisher. It’s all about the books now," she says resolutely.

The Workman Deal

"The arrangement with Workman is terrific," Art confides. "For our first 15 years, we were distributed by HarperCollins. You should have seen their faces at sales conferences when we held up books like Raising Pigs the Modern Way. Our covers were kind of goofy in those days, too. Then HarperCollins dropped us in the late ‘90s and Random House picked us up, but we were with them for only 18 months. After the Bertelsmann buyout, they let us go. When we sat down to consider which company we’d want to distribute us, the consensus was Workman.

"The fit was perfect. Workman is very effective getting our titles into bookstores, libraries, and gift stores. We’re still very good at getting our books into retail outlets that cater to our niches: feed stores, pet stores, garden supply stores, etc. The relationship with Workman has helped drive the desire to raise the bar, publish fewer books, but make them better.

"We have a great new art director now. We have substantially improved our covers to appeal more to the trade. Storey books have always been thick with practical content and quality illustrations. We want the covers to be as good as the content. We are focused on publishing the best books in our topics, and in capturing market share in those topics."

The newest addition to Storey’s editorial family is a line of children’s books–one of the toughest markets to breach these days. Asked how the Storey Kids imprint is doing, Art replies, "I’ve been delighted with the results so far. We still have a couple of titles that haven’t been picked up by the chains, but we’ve done extremely well with book fairs and book clubs, including Scholastic. We’ve won several awards from the educational community, and that’s driving sales. Surprisingly, we are selling more hardcover than soft, thanks to the libraries and Workman’s reach into that market."

The Magic Metric in the (Pam) Art of Publishing

Many publishing executives have one number they focus on–cash flow, profits, gross margin, sales–knowing that if that number is strong, they don’t have to worry about the rest of the financials. We asked Pam Art if she had a magic metric, and her answer was quick and surprising: printing costs.

"I look at PPB and S" (translation: printing, paper, binding, and shipping). "It’s amazing how much money you can save, and how much it contributes to the bottom line. I encourage all publishers to seek printing bids aggressively. For us, it has been like printing money."

"The printing market is soft right now," Art explains. "We’re bidding every reprint. We do 12 reprints a week, and we get five or six bids. Our markups before were OK; now they’re fabulous. It’s hard to get excited about saving 20 cents a copy–that doesn’t sound like much–but it adds up. Every $1,000 we save in printing costs has the same effect on the bottom line as an increase in sales of $10,000 or more."

When asked about quality concerns, Art responds, "We look for the best printer for the project. They must have the right paper, processes, and equipment. I urge all publishers to visit their printers; you can tell a lot just by looking around. Many publishers stay with the original printer for reprints, but you need a different printer for a 20,000-copy initial print run than you need for a 2,000-copy reprint.

"We manage our inventories to turn twice a year. With 400 titles, that’s a lot of printing. It’s time consuming to bid out reprints, and it’s a pain to move a book from one printer to another, but it’s worth it. If you can save 5 percent in your PPB&S, it’s going to have a huge impact on your bottom line."

© 2004 by Steve O’Keefe

Steve O’Keefe is the executive director of Patron Saint Productions, Inc., a publishing consultancy (www.patronsaintpr.com). His latest book is Complete Guide to Internet Publicity (Wiley, 2002). To suggest a publishing company or person for him to profile, email info@PatronSaintPR.com.