Pimp My Novel is a great blog by a publishing insider about the twisting and mysterious backroads of the business-end of the publishing business. Here s/he talks about remainders, pulping, US tax codes, and the 1979 US Supreme Court decision in Thor Power Tool Company v. Commissioner of Internal Revenue:
You might already see the problem: each year, thousands upon thousands of books are returned to their respective publishers, generating high levels of nigh-unsellable inventory at their warehouses. Because publishers can no longer write down the cost of their inventory based on inability to sell, they have to do one of two things: remainder the books, i.e. sell them for pennies on the dollar in order to get rid of them, or pulp (destroy) them. (This is the case for hardcovers and trade paperbacks; mass market editions are generally stripped. In case you were having a good day thus far, please note that 40% of books suffer this fate.) [more...]
