ORIGINALLY PUBLISHED AT INSIDE.COM (8/8/00)
As publishers clucked over General Electric CEO Jack Welch‘s vertigo-inducing $7.1 million advance — right on the heels of former Treasury Secretary Robert Rubin‘s $3.3 million one– it was only too obvious that business books have become, well, big business.
In fact, business book sales in the professional category rocketed to $852 million in 1998 from $490 million in 1992, growing more than twice as fast as the overall market for trade books, according to the most recent figures available from the American Association of Publishers.
But beyond those white-hot numbers is what some publishing executives call a vast ”gray area” in the way business books are sold and ranked. More than any other category, perhaps, the business book market is rife with unusual — some would say unethical — methods used by authors and their corporate sponsors to pump up sales and propel titles onto influential bestseller lists.
Five years ago, Business Week rattled the industry with an expose about the alleged ”dirty tricks” that helped a couple of ethically challenged authors get their book, The Discipline of Market Leaders (Perseus Books) on the New York Times and Business Week bestseller lists. The article revealed that management consultants Michael Treacy and Fred Wiersema spent at least $250,000 to have a ring of buyers purchase 10,000 or more copies of their book from key retailers around the country. In addition, they funneled bulk purchases of another 30,000 to 40,000 copies through a web of bookstores. That way, sales would be counted in the retail tallies without arousing any single retailer’s suspicions that the overall purpose was to pad the numbers of reporting stores, and thereby — as Business Week writer Willy Stern put it — ”breach the integrity” of the bestseller list.
Treacy and Wiersema’s goal? Not to sell gazillions of books, though some business bestsellers do. (Discipline continues to be a bestseller.) More important for these consultants was to appear to have written a ”national bestseller.” Along with such a designation would come speaking engagements — at $30,000 a pop — and lucrative consulting assignments, which would increase the fortunes of CSC Index, the firm they worked for and with which they shared the copyright. CSC, after all, knew the power of brand-name authors. Two years earlier, Reengineering the Corporation, a book written by CSC consultants Michael Hammer and James Champy, sold 2 million copies — and business at the consultancy boomed.
But it’s unclear whether Treacy and Wiersema’s 1995 public dressing down did anything to clean up the business book marketing process.
David Goehring, who was then sales director at Addison Wesley (which is now part of Perseus, where he is currently publisher) thinks that much of the problem back then was not the way books were sold, but rather, how their sales were reported: ”It’s important to recognize where an order comes from, and to note that.” He says that The New York Times now puts a dagger next to business books that have bulk sales to indicate that ”some bookstores report receiving bulk orders.” Robert Hughes, who compiles the Wall Street Journal‘s business book list, states via e-mail, ”Our suppliers of data let us know when books are bought in bulk, so we can take that into account when calculating our weekly lists.”
But some publishers admit there are still some practices that are best not divulged: ”It’s like running a spa, and you’re providing a discreet service,” says one business book publisher, referring to the delicate task of coordinating the needs of a small number of elite clients — CEOs, consultants and others with corporate brawn behind them — all of whom want to reap the rewards of bestsellerdom. To that end, the arrangements among author, company and publisher vary widely, executives say. A company might commit to outright sponsorship (paying a fee to get the book published), or agree to a contractual obligation to buy a minimum number of books, or even commit to buy unsold books.
And there’s where things begin to go gray. Whether those books are bought in bulk at a negotiated price, or through a bookstore (sometimes brought in to sell books at the end of an author’s speaking engagement), depends on how determined author and employer are to get the book on the lists. Corporate purchases alone can’t make a book a bestseller, but they’re proof of a company’s commitment to its author, which demands the ongoing attention of both the publisher and (if bulk sales go through bookstores) retailers. According to a rival publisher, there’s good evidence that corporate purchases accounted for only 5 percent of the total sale of one business book that may have benefited from questionable tactics, though the book went on to sell hundreds of thousands of copies and topped the bestseller lists for months.
Factor in that there is not exactly a shortage of such lists. Like the Wall Street Journal, Business Week now publishes a weekly ranking of business titles (in 1995 it was a monthly). And Amazon and bn.com have endlessly refreshed lists that start with the top 50 titles, but splinter into myriad subcategories. Online retailers, in fact, have become by far the largest retailers of business books. One publisher said that Amazon and bn.com — which together usually account for 10 to 12 percent of retail sales — can outsell Barnes & Noble stores, and on specialized books, will outsell traditional retailers by a factor of 2 to 1. The Cluetrain Manifesto, a recent Perseus Books title, sold around 20 percent of its 100,000 copies through online retailers, though Goehring is quick to point out that this book began its life as a Web site, and therefore had an online following.
B&N insiders, meanwhile, report that business books are among the company’s top five categories, even though corporate and bulk discounted sales (which are not reported to bestseller lists) are now handled by its own B2B Business Solutions division. Sales through the division have become ”quite substantial,” says a B&N source. The business market has managed to create its own ”virtuous circle of promotion and sales,” says Adrian Zackheim, editor in chief of HarperInformation. Zackheim adds that the Internet and the news media contribute to the buildup of self-promotion, which is presumably not lost on the corporate world, where good publicity is a priceless commodity.
There are those in publishing who dispute the notion that large corporations are unfairly fueling the bestseller fires, though there’s no disputing that most other categories of books don’t benefit from the kind of largesse that, for example, Hewlett Packard exhibited when it gave each employee a copy of the story of the company by its revered co-founder, David Packard. Still, says one publishing veteran, ”It’s just not true that every company in the U.S. will buy copies.” And two people involved with the Jack Welch deal confirm that there were no contractual promises from GE to buy books from the publisher.
Given the hype, however, one assumes that a sizable number of GE’s 350,000 employees will want to read their exiting leader’s bits of corporate wisdom. It must comfort Time Warner Trade Publishing to know that if each of those employees receives a copy, there will be only 1.2 million more to sell to earn out Welch’s gargantuan advance.
