If you are in the business of selling things, and you sell something for less than you paid for it, this is a failure on your part.  Now, it’s a little different if selling that thing at a loss enables you to sell more of other things (see loss leader).  But that’s not what’s happening here.  The publishing industry is essentially selling the profitable thing to pay for the loss leaders.  This is not how selling things works.  This, incidentally, is why the publishing industry has such a problem with Amazon – Amazon is very good at using loss leaders, and it undercuts the way publishing has always worked.

There are numerous solutions to the problem, but all involve a big change in the way publishers do business.

First, they can make the “losses” less costly.  Move compensation towards the back – advances are gambles by publishers that often don’t pay off, and guess who gets to make up the difference?  That’s right, the reader.  Won’t this hurt authors, you ask?  Probably.  This is not what anyone wants, so we’re going to have to figure out ways to fix it.

Perhaps a better idea is for the publishers to learn how to use loss leaders correctly.  When someone buys the latest Dan Brown hardcover, give them the debut novel from a relative unknown who writes fast-paced conspiracy thrillers.  Note that this works even better with ebooks, where the marginal cost to produce another copy is infinitesimal.  You’ve now increased the value of Brown’s book, and maybe you’ve gained a fan for the new author.  I rarely buy books from authors I don’t know (not without strong and trusted recommendation), but I often by the second and third and fourth books from authors I first read for free.

As an aside, this works even better if you’re an indie bookshop run by someone who would know right away which unknown author would perfectly complement a Dan Brown or other famous author.

Publishers, recognize that the way (most of) you do business now is broken.  It is fixable.  Go figure out how.

Self-published books don’t have the same filter on the front end.  There’s not necessarily an experienced editor polishing the work until it shines.  There’s no one rejecting books because they aren’t marketable.  So we have a lot of self-published books that only a mother (specifically, the mother of the book’s author) can love.

But small bookstores are fantastic filters on the back end.  Now, the image of the helpful clerk picking the perfect book for a customer after a thirty second conversation may be romanticized a bit.  But a bookstore full of employees who love to read, who read all the time, is a wonderful tool to cut through the self-published forest and pull out the stuff that’s really worthwhile (or even just really appropriate for the customer at hand).

Complaining about both of these problems at the same time is a bit like complaining that it rains all the time, but no one will buy your umbrellas.  Either it’s not really raining as much as you think it is, or your umbrellas aren’t very good.