Bascially it boils down to this: In order for a big box retailer to be able to purchase the heavily-hyped Fall 2008 titles - the titles whose sales will make up the bulk of their income for the year, by the way, thanks to good old-fashioned holiday consumerism - they must come up with cash by returning pretty much everything they bought in Spring and Summer 2008. Which means that publishers must eat those books. Which means layoffs and other Really Bad Things.
In October, bookstores returned so many books that most publishing companies had more coming into them than going out of them. For some companies, the incoming number was more than several months' outgoing.Great advice. Now go read Moonratty's entire post!
Although bookstores are suffering (and how), it was the publishing houses that had to absorb the cost of this cash flow creator. This is why Impetus, a relatively new indie company without the history to survive this shock, folded. Some houses lost so much money in returns in October that profits from the entire rest of 2008 have been negated. Can you imagine? Losing enough in a month to destroy your entire year? (Keep in mind that publishing is a very low profit margin enterprise in the first place; now see how if one month involves more outgoing than incoming money you can easily undo the good of an entire year or more.)
Now you can see the ripples that are happening, the layoffs, the dwindling advances, the precautions about acquiring anything in this climate. If publishing companies are shelling out money to publish books that bookstores only bother to stock for a minute and a half, we are all going to hemorrhage money until there is nothing left standing.
This would be a bad situation for more than the sake of my job or your future novel. It's about a lot of things--education, hampered information dissemination, conglomerations swallowing mass media, censorship. Whatever. I could extenuate, but I'll spare you. The point is, when you have a problem, the best thing to do is try to solve it.
For anyone who cares about the book publishing industry and wants to do their part, there's one simple action step:
Buy a book this weekend.