May 15-31, 2005 Edition

Authorlink Special

Lighting Source’s Plan

to Launch “Print to Order”

Program May Boost POD

LA VERGNE,TN/05/13/2005—Lightning Source, Inc has been quietly developing a new ordering system that may be a boon to print-on-demand (POD) publishers. J. Kirby Best, president and CEO of Lighting Source, and Jim Chandler, president and CEO of Ingram, were not available to make statements at Authorlink press time, but the two companies may plan to officially announce the launch of the program during Book Expo in New York, June 3-5.

In the past, major bookstore retailers have had difficulty ordering POD titles because their computer systems would not allow “back ordering” of a title. Since POD books don’t exist in the real world until they are ordered and printed, store computer systems simply didn’t recognize that titles were available in the Lightning/Ingram ordering databases.

Ingram and Lightning Source have tried several initiatives to overcome the problem, which often hurt POD sales. A couple of years ago the company tried a program called”One Source.” But since major retailers including Borders, BDalton and Walden, did not subscribe to the system, the plan failed. Lightning Source then tried sending one copy of each POD title to Ingram as real inventory, which would show up in retailer ordering systems. When the copy was sold, another would be added, and so on. That program also didn’t work well and still required larger orders to be back ordered.

Now, however, Ingram and LSI have collaborated to come up with the new print-to-order model. Ingram will place “virtual” stock of about 100 units of each POD title in their Nashville Warehouse (the Roseburg Warehouse will not directly participate in the program, but their customers will be able to order from Nashville). Thus, there will always be “stock” available and retail stores that are not allowed to back order can place an order for a POD title with the assurance that it will be shipped within 24 hours from LSI back to Ingram to become part of the customer’s standard order.

The fact that POD orders can be bundled with all other orders without the back-ordering stigma, should serve as a huge boost to the sale of POD titles.

A statement that the new stocking initiative would be in place by late in the first quarter of 2005 has been on the Lightning Source web site since last October. The item calls the program “a true print-on-demand inventory model.”

Since the inception of Lightning Source seven years ago, Ingram supported the development and growth of the print-on-demand industry by stocking copies of on-demand books. Initially, on-hand stock needed to be shown to avoid retailer-ordering issues, the Lightning web site said. Because of the amount of time it took for a “traditional” backorder to process, sometimes weeks, retailers often would not place backorders for books when there wasn’t sufficient stock on hand at the wholesaler. Many retailers have selected to block backordering in their ordering systems, even though on-demand books were being printed in a few days.

Ingram, until recently, worked around these problems by buying at least two copies of LSI books (often on a non-returnable basis). This practice helped overcome most retailer backordering issues and allowed Ingram to maintain regular service levels. However, the cost of this practice became prohibitive, as the library of LSI’s titles grew to more than 150,000. At the same time, LSI’s manufacturing capabilities advanced to the point that many books are now manufactured in less than 24 hours. Consequently, the timing is right to evolve to a business model that is more in line with the original vision for print-on-demand.

With the rapid turn around available today from LSI, inventory can be manufactured and sent to Ingram for order consolidation and shipment on a next-day basis from Nashville. Books will be printed as they are ordered, and all LSI titles will display as active and available for ordering from Ingram and on iPage. Backordering of these titles will not be necessary. Ingram will continue to stock certain titles with a demonstrated sale history under their standard stocking policies. These titles will continue to be available for same-day delivery.

Addressing the backordering concern, the new program will also ease the ordering of multiple copies of books. Under the old minimum on-hand system, if enough copies were not shown, larger orders would require a backorder, once again creating a hurdle for those retailers with “no backorder” policies. The new system is designed to increase sales by filling every order, without delay, at the exact quantity desired by the retailer.