Breaking into books

A major problem publishers face is distribution. The decrease in independent bookstores means more publishers are fighting for shelf space in chains such as Barnes & Noble. Of the estimated tens of thousands of independent publishers in the US, says Ms. Nathan, only about 900 are represented by three distribution companies who market their products to booksellers.

Hull has signed on with a distribution company, but those who don't have the money to do so have become more innovative about the places they try to hawk their wares - capitalizing on surveys that show that consumers buy their books from a variety of outlets, including specialty stores, catalogs, and the Internet.

Small publishers say the chain stores are primarily interested in books that are bestsellers, and those belong to the top companies. Publishers Weekly notes that of the books that made the magazine's hardcover bestseller list in 2002, 77.4 percent were from the top five publishers (Random House, Penguin Putnam, Simon & Schuster, Time Warner, and HarperCollins). The number jumps to 91 percent when two other well-established hardcover publishers are added in.

Would-be publishers starting from scratch often try to disprove the idea that it takes a lot of money to turn a profit. Nathan recalls a common adage: "How do you make a million dollars in book publishing? You start with two [million]."

In the current economy, most people don't have an extra million dollars, but by some accounts it can take that much.

"It's a capital-intensive, long-term cash flow, relatively low profit-margin business. Sounds good, doesn't it?" jokes Hull, who is paying for his endeavor with a line of bank credit and private investment, including his own money. "I don't think someone starting in this industry necessarily needs a million bucks, although the closer you can get to it probably wouldn't hurt," he adds.

Others say $10,000 or even just a few thousand can be enough to get a company off the ground.

James Engstrom, a retiree in Sequim, Wash., spent about $3,000 and made about $3,000 on his business, Twenty Penny Press, last year. He has mainly offered e-books - digital versions of the Bible and Sherlock Holmes mysteries - which he says have not sold well. But starting next month, he'll use some of his earnings to offer his first printed book, a mystery he wrote himself.

He plans to use an option called print-on-demand, which means the book is printed only when someone requests it, reducing the costs he would absorb if unsold copies of the book were returned to him by a bookseller. "Returns are the thing that kill small publishers," he says.

New technologies are what Mr. Epstein says may eventually liberate the small publisher - allowing him or her to use the Internet and printing devices to download books directly to consumers and bypass retailers.

"That will change the business profoundly and make it much more interesting and varied and will restore to small publishers ... the kind of autonomy that Random House and others used to have in the old days when they consisted mainly of groups of like-minded editors working on their own," he says.

Hull is modeling himself on the old-style, independent general publisher, he says, rather than taking a niche approach. He is beginning with 12 books and wants to end up as a mid-sized company with about 40 books per year.

"I probably didn't know enough to be really daunted," he admits of his initial thoughts about getting into the business. Now, publishing is challenging every day, he says. "But it's also fun."

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