Before the early 1970s, wholesalers to the trade were local and carried a relatively small number of titles. Their main job was to back up bestsellers and local booksellers went direct to the publishers for just about everything else. Baker & Taylor was national, but focused on the library market. And Ingram was a small and pretty insignificant player. Harry Hoffman was their president.
Here was the wholesaler’s problem: they couldn’t carry everything and for anything except the top titles there was no assurance of any demand.
Here was the retailer’s problem: most of what they ordered from a wholealer wouldn’t get delivered. The “fill rate” (percentage of what’s ordered that is delivered) was terrible. On average, it was well below 50%.
Here was the wholesaler’s next problem: most of the orders they got from stores couldn’t be filled, but required some level of processing and communication. So, cumulatively, they spent a lot of money on the orders they couldn’t make a nickel on.
Here was everybody’s problem: all of this took a lot of time.
One day in about 1972 (I could be a year off with some of this…) a former colleague of Hoffman’s from his tenure at Bell & Howell brought in a new gadget called a microfiche reader. The reader enabled one to see what was on a piece of film that was about 3″ by 5″ and was literally packed with information. What somebody saw in that meeting (and Michael Zibart, who did the buying at Ingram then and is now owner and publisher of BookPage, thinks it was Harry) was that Ingram could put its inventory on it. So if somehow the stores could have a reader, they could get the inventory of Ingram’s books mailed to them each week.
And then they’d stop ordering books Ingram didn’t have! And they’d know, with reasonable certainty, what they were going to get when they placed an order! And Ingram would not have to process orders they couldnt’ fill!
The challenge for Ingram was to get the readers, which were not inexpensive, into the stores’ hands. They decided to do that by renting them, asking the stores to pay a monthly fee to have them. So they went to the ABA Convention (American Booksellers Association, which sold the convention to Reed Exhibitions in the 1990s and which Reed turned into BEA) in Los Angeles in 1973 to peddle the readers. They had no idea what reaction they’d get.
It was overwhelmingly positive. The stores, many of which didn’t really know Ingram, were enthusiastic about the concept and willing to pay for the reader. Ingram was able to charge the publishers for the cost of creating the microfiche (I think that started at $1 per month per title listed.) So they created self-liquidating efficiencies which immediately supercharged their fill rate (into the 90s), boosted their volume and customer base, and eliminated lots of wasted cost processing orders they couldn’t fill. As a bonus, Ingram was able to put their unique title number, which they needed to fill an order, on the microfiche so the stores did the “coding” for them. More costs eliminated.
Within a year or two, Ingram was a national trade wholesaler. Baker & Taylor copied the microfiche innovation later in the 1970s. Stores were able to stock backlist much more efficiently because they could single-source multiple publishers and order with much greater frequency.
This change, along with B. Dalton’s pioneering, at the same time, of POS capture and the model stock concept, fueled a huge growth in bookstore sales nationwide. But that’s an old publishing story for another post.