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Lightning Source 101
A Primer on Lightning Source Inc. and Its Role in Print on Demand and Self Publishing

By Aaron Shepard

Excerpted and adapted from the book POD for Profit: More on the NEW Business of Self Publishing, Shepard Publications, 2010


For more resources, visit Aaron Shepard’s Publishing Page at
www.newselfpublishing.com

Copyright © 2006, 2007, 2010 by Aaron Shepard. May be freely copied and shared for any noncommercial purpose as long as no text is altered or omitted, but it may not be posted online without permission.


Book cover: POD for ProfitWhen self publishers first hear about Lightning Source Inc., they tend to think it’s just one more provider of POD author services—or “self publishing company,” as these businesses are commonly called—like Lulu.com, AuthorHouse, iUniverse, or Xlibris.

But Lightning is not a “self publishing company” at all, and its services are not aimed at authors. Instead, it aims to serve publishers, and in that role, it has become the very heart of the POD industry. Founded in 1997, Lightning is the company that self publishing companies turn to for much of their book printing and distribution. Even Amazon’s CreateSpace offers “expanded distribution” through Lightning as a way to reach other booksellers.

Lightning’s print operations are truly massive, and expanding rapidly. By early 2010, Lightning’s U.S. and U.K. branches were printing 1.5 million books a month, in print runs averaging 1.8 copies per title. Its complete catalog totaled 1.6 million titles from over 11,000 publishing clients—many of them self publishing companies but most of them individual publishers, from Shepard Publications to Simon & Schuster.

As a distributor, Lightning’s importance and effectiveness in the U.S. are largely due to a unique advantage: It’s part of the same company that houses Ingram Book Company, the biggest U.S. book wholesaler. Almost all bookstores in the country, as well as many libraries and schools, order books from Ingram.

As you might expect, Lightning and Ingram work together closely. In fact, Ingram “carries” every title printed by Lightning—even if Ingram doesn’t really keep the title in stock. Actually, it may stock some popular Lightning titles, but any others can be printed by Lightning within four hours and delivered to Ingram the next morning, ready for shipping. So, if a bookstore inquires, Ingram reports any Lightning title as immediately available. Any book handled by Lightning, then, can be obtained easily and quickly by booksellers throughout the U.S.

Foremost among U.S. booksellers that can get your book from Ingram is Amazon.com. And because Amazon feeds directly on data sent electronically by both Lightning and Ingram, you are nearly guaranteed that Amazon will list your book. What’s more, because Amazon regularly uses Ingram to “drop ship” books direct to customers, Lightning books are normally listed on Amazon as in stock and available with one-day shipping, even if Amazon doesn’t have its own copies at the time.

The connection between Lightning and the rest of the U.S. book trade is even stronger than that. A few huge booksellers have the resources to tap into Lightning’s electronic systems and order directly instead of going through Ingram. Here are some of them.

• Baker & Taylor, the second largest U.S. book wholesaler and the largest supplier to U.S. schools and libraries. It is also the primary wholesale supplier to Borders and Borders.com.

• NACSCORP, another major wholesaler, as a service of the National Association of College Stores.

• Barnes & Noble, including BN.com.

• And of course, Amazon.com. Though Amazon normally orders from Ingram to fill immediate customer demand, it often orders direct from Lightning to stock a book in its own warehouses.

Meanwhile, Lightning’s overseas branch, Lightning Source UK, is similarly well connected. Among the companies it supplies are Gardners Books and Bertram Books—the two biggest U.K. book wholesalers—plus Amazon.co.uk. Books handled by Lightning in the U.S. can easily be earmarked for printing and distribution by Lightning UK as well—and vice versa.

As Lightning’s U.S. and U.K. operations continue to grow, so does its international reach in general. Books printed in those two countries are already available from online booksellers around the world—both in countries that speak English and in countries that don’t—including Amazon sites in Canada, France, Germany, and Japan. Some books are exported by wholesalers or retailers that order direct from Lightning—such as Amazon.com and Ingram’s export arm, Ingram International—and others by Lightning itself.

Lightning is also looking to expand the number of countries in which it is based. Australia and Southeast Asia have been considered for new branches. A new center in France, operated in conjunction with the French publisher Hachette Livre, is due to open in 2010.

In yet another area of expansion, Lightning has become part of an entirely different distribution channel. Through an agreement with On Demand Books, Lightning is among the companies supplying files for printing on the Espresso Book Machine, a small-scale POD press aimed at use by individual bookstores, libraries, and other local businesses and services.

Though Lightning Source is now becoming better-known among self publishers, for many years there were few who had heard of it at all. And there was a good reason for that. Lightning prefers to deal with publishers and self publishing companies rather than with authors directly. That minimizes Lightning’s need to provide customer support.

But then, how can you work with Lightning directly? Simple. You become a publisher. And thankfully, Lightning makes that step easier than ever before. Though there are a number of things you might need or want to do in setting up a publishing business, only two are vital for working with Lightning: adopting a publishing name and acquiring a set of ISBNs—International Standard Book Numbers.

Even if you live outside the U.S. or U.K., you’re not left out. Because of the Internet, you can work directly either with Lightning US or with Lightning UK from anywhere in the world. In fact, Lightning UK is set up to do business not only in English but also in French, German, Spanish, and Italian. And the books Lightning prints can be in any language at all!

Before you read any further, though, I must caution you that working with Lightning is not the best choice, or even a good one, for most self publishers. This route will suit you only if you’re:

• Planning to publish more than one book. The setup and learning probably won’t be worth it for just one or two.

• Profit-oriented. Willing to make the extra effort to earn a good return on your investment.

• A good marketer. You won’t make money if you’re not willing and able to promote your book, at least at the start.

• Financially able. It takes money to make money, and you’ll have to be ready to plunk down cash when needed (though what’s needed can be much, much less than with self publishing companies or old-style self publishing).

• Possessing a good business attitude. That means being able to work with others in the industry professionally and courteously, without undue suspiciousness or an attitude of “us against them.”

• Technically capable. Able to work with computers effectively and to understand complex instructions. With minimal help from Lightning itself, you’ll need to perform a variety of demanding tasks in complicated software and on arcane Web sites—or else engage others to handle them for you.

I can’t stress this last point enough. If you’re the kind of person who often gets stuck on the computer and needs to be bailed out by others, do yourself a favor and either farm out the work or stay away from Lightning Source! Lightning is set up to work with professionals who don’t need such help, and you simply won’t get it.

The demands of working with Lightning Source are great, but so can be the rewards. By cutting out the self publishing companies that act as middlemen and then working directly with Lightning, you can as much as double your profit per copy. That’s because you don’t have that intermediary applying a markup to printing costs or taking a big cut of the book’s income.

But how does this arrangement compare financially to old-style self publishing—printing large numbers of copies, then marketing through traditional bookselling channels? Isn’t printing on demand much more expensive than the offset printing used for large press runs, making it harder to turn a profit with POD?

Yes and no. Yes, direct printing costs per copy are higher, but this is most often balanced by costs you avoid. You don’t pay for shipping, you don’t pay for copies you wind up not selling, you don’t miss sales if you run out of stock at a bad time. In the end, it’s likely to even out, or even come out in favor of going with Lightning.

But more importantly, when you work directly with Lightning, the ways to increase profit per copy are no longer limited to cutting your costs or raising your price. In fact, you can double the profit without touching those factors at all—because for the first time, you have real control over discount.

Let me explain. It seems that in field after field of creative or productive endeavor, the people in the middle claim all the power and call all the shots. The actual creator or producer most often winds up having to accept whatever’s offered and then barely scraping by on it—or not. And the smaller you are, the more you’re at their mercy.

This is certainly true in publishing. When small publishers are allowed into regular book channels at all, their benefactors often charge them a larger-than-standard cut for the privilege.

Amazon does this with its Advantage program for buying books directly from small publishers—the advantage of the program being Amazon’s, not the publisher’s. Ingram does it with its on-again off-again small publisher program. But even Ingram’s regular publishers are required to give Ingram a discount of over half the cover price of the book. And what of the publishers Ingram says are too small to work with directly? In the past, their only course was to go through a distributor that charged them a hefty percentage over Ingram’s.

Lightning Source, though, was set up to be different. Part of its aim was to attract academic and library publishers who never offer a wholesaler the kinds of discounts that Ingram normally requires for stocking. So, Ingram wound up creating a back door to its operation—an entry point that doesn’t require publishers to follow Ingram’s normal rules. Small publishers working with Lightning are allowed to set almost any discount to wholesalers that they want!

Here are some other great benefits of working with Lightning:

• Unlike if you were supplying Ingram or Baker & Taylor directly, you can choose not to allow booksellers to return copies of your book, eliminating that notorious source of hassle, cost, and waste.

• You don’t have to invoice (as with old-style self publishing) or wonder about what’s owed to you (as when working with some self publishing companies). Lightning keeps track of everything, provides detailed sales reports, and sends payment reliably each month.

• With its history of profitability and stability, you don’t have to worry about Lightning closing its doors or being absorbed into another company, as you might with a self publishing company or a small press distributor.

• Your agreement with Lightning is nonexclusive. That means, if you have a different, better way to supply special markets, you can pursue that too.

Quite simply, for any self publisher able to handle the challenges, there’s no better deal in print publishing.


Book cover: POD for Profit
Read the book!

POD for Profit
More on the NEW Business of Self Publishing
By Aaron Shepard