Wednesday, January 10, 2007

Who Owns Your Books: The PGW Dilemma

Why is it that judges and courts think that distributors own the books of their publishing clients? It just doesn't make sense. Now it seems that even with a contract stating that the books remain the property of the publishers, the AMS bankruptcy is resulting in AMS and Wells Fargo making a claim on the books stored in Publishers Group West's warehouse.

So, the publishers -- who will already lose much or all of the proceeds from holiday book sales made via bookstores -- might now also lose their entire remaining inventory to the sordid hands of banks and creditors.

Now, I love banks and have a Wells Fargo credit card. But, if they go through with this forced sale of publishers's books, I will no longer do business with Wells Fargo. And I will call them scum-suckers, to boot.

Many of the publishers with PGW are good friends of mine and incredible publishers. I would hate to see them brought down by the incompetence and malfeasance of the AMS leadership -- which has nothing to do with the competence and capabilities of the PGW leadership and the incredible publishers who have been long-time clients of PGW.

I've been caught in a distributor bankruptcy myself -- and lost about $10,000 in receiveables and some inventory. I knew it was coming, however, and protected myself by switching distribution companies before the bankruptcy actually occurred. So I simply never got paid for my remaining receiveables (which I had already limited).

Personally, as a publisher, I would have left PGW ten months ago. AMS has been having a series of business issues over the past few years and, even for a perpetual optimist like myself, I couldn't see them making their way out of it, as much as I had hoped they would. Perhaps I should have questioned my friends more closely much sooner.

What you should do if you have a distributor is to begin asking the tough questions, especially if payments start getting slower or other questions start popping up. It takes quite a great businessperson or persons to make a success of any distribution business. To my mind, it's not an easy business model, so I admire the people who carry out such a business successfully -- including the original owners and executives of PGW.
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