What should I ask about a small publisher’s backlist and inventory in warehouses?
Ask for stock by title and location, with sales history for each. Find out which books sell steadily and which have sat for a long time. Confirm who physically holds the stock, whether any is on consignment with retailers, and who bears the cost of storage and returns.
A backlist is the publisher’s steady earner, and warehouse stock is the printed copies of it on hand. Start by asking for a report of copies by title, edition and location, then ask to see sales for the same titles. Titles with solid stock and thin sales may be a burden on the balance sheet. Ask who decides when a title is reprinted or retired, since that choice drives how much cash sits on shelves.
Verify the counts. If a third-party warehouse holds the books, ask for its latest statement and consider an independent count. Ask about damaged copies, old editions and anything meant for pulping. Check that the books on the shelves match what the accounts say.
Then ask about the contracts around the stock. Do fulfilment or storage agreements carry fees or minimum terms? Are any books held for retailers on consignment? Which copies are owed to authors, and what do author contracts say about remaining stock if rights revert? Ask your accountant how stock is valued in the books and whether slow titles have been written down. Ask also about reprint plans. A title with low stock and steady demand may need cash soon, so a buyer should know what upcoming printing bills are likely before closing.
Key takeaways
- Request stock by title and location next to sales history.
- Verify counts with the warehouse and look for damaged or obsolete copies.
- Ask about storage contracts, consignment and copies owed to authors.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat is inventory
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
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