In 2022, Microcosm was Publishers Weekly’s fastest growing publisher, based on our growth of 207% between 2019 and 2021 (check out our annual reports for 2019, 2020, and 2021 for more on that wild ride)! Then in 2023, we were Publishers Weekly’s #3 fastest growing publisher mostly because of our significant growth in 2021.

Over the previous twelve months, we had yet another wild ride. We saw a fork in the road and we chose to self-finance our meteoric rise, reinforce and shore up systems rather than force aggressive, continued growth. As a result of those choices and apprehensive and uncertain retailers fearing a recession, our sales fell -18.67% in 2023. However, 2023 still saw 3.4% growth over 2021. There is much conjecture in our industry that 2021 was an abberration; a “pandemic bump” for books, but we are continuing to grow past it.

We remain fiscally solvent and financing growth with cash; owing $449k and owed $664k, despite purchasing a third warehouse with cash in 2023.

Most of this year looked like a cookie cutter “2022 minus 18.67%” until September, when it looked like we’d make up for eight months of reduced sales. But retailers remained apprehensive and reactive, anticipating a recession that never came by having undestocked shelves.

We published 39 new books in 2023, with 18 more coming this Spring and 21 more coming this Fall!

We’re excited to resume conventions in a few weeks with PubWest, Winter Institute, and Vegas Market.

Our newest warehouse in Cleveland handles 67% of our shipments and 78% of our receiving. Interestingly, October was a record shipping month and overall, we saw that orders were on par with 2022’s busy holiday season—our best holiday shipping season ever—so that seems fantastic. And it looks like this will inform cash flows for Q1. 

One store reported, unabashedly “My accountant told me that the more books that we buy from you, the more that we sell for the holidays.” And the buyer has responded in turn.

The major difference this year is that things never stopped (which is consistent with 2020 and 2021 but not 2022). We received the largest order that we’ve ever seen on Christmas Day for over 5,000 different titles. The same store sent two additional orders in the same week, with promises of two more yet to come. Our marketing and sales departments are working closely with them to build these up.

We’ve seen that responding to the individual needs of each retailer and what they need from us is fundamentally what grows those sales. So it’s largely listening and being responsive. e.g. We were understocking in Q2 of 2020, anticipating recession, and stores complained that we were sold out of titles they needed so we responded and found a middle ground…until it was clear that sales were not slowing at all. But it took four months to bear out that data.

It remains clear that the more warehouse space that we have, the more books that we can sell. So we continue to inch in that direction—just not too fast so we can prevent cash and protect everyone’s jobs.

The most interesting thing here is that we have built our systems so that we don’t have “slow months” or “increase returns exposure” in January and February—because they are some of our busiest months. Our total returns for the year were a scant 1.48%.

Our success continues to be based 50% on what we publish and 50% on how we publish. Meaning that, of the 12,000 stores that we work with (1788 of which we added in 2023), about 25% of them purchase all of their books from us and so our salespeople don’t stick them with hyped books that they cannot sell. 99% of our books are evergreen, so we aren’t fighting a timer to make them burn bright before they fade away. Best of all, the practical skills and values in our books are what the world has wanted for at least the past 28 years. Probably longer. The need remains vast. So does the interest. And we really focus on how each book can bring meaning and purpose to someone who feels lonely in the world.

We added our eighth co-owner this week, though all profits are shared with our entire staff. In 2023, profit sharing equated to an additional $1.50 per hour per person for the entire staff and we were able to increase our budget for wages by 26.67%. We increased our paid time off benefits and also offer insurance to our staff (though that became 67% more expensive in 2023).

And if you really want to get into the nitty gritty of publishing, check out our podcast.

But before we wear you out completely, let’s take a look at the numbers.

Our total sales for the year were $3.8 MILLION DOLLARS, with our own publishing comprising about 64.4% and ebooks comprising 4% of our sales:

And here are our bestsellers for the year by dollars earned (minus expenses like printing and cover design):

UNF*CK YOUR BRAIN, which we published in 2017, is still outselling the following twenty books—combined. This one title continues to comprise 9.57% of our total sales. Even if you ignore this aberrant title, it was a phenomenal year. We published 39 new books and over twice that many zines. And healthfully, 95% of the titles selling in the top 20 were published prior to 2023, meaning that the sales are “sticky,” the books will continue to sell for years to come (and we expect our 2023 publications to shine this year).

So where did all those millions go? As is written into our company bylaws, we invested it all back into the company and into our workforce, including hiring new workers and those profit-sharing employee bonuses mentioned above. Nobody got a yacht, but we all got by. You can see that piece of the pie alongside the rest of our outgoing money below.

Expenses for this year were $3.8M, which notably includes the self-financing of our continued growth (as opposed to, say, a bank loan):

As you can see, our biggest expense is increasing inventory to fill those warehouses, followed by payroll, the new warehouse we purchased, and shipping.

What trends are we seeing in our patterns? Tarot books were up 40%, Science was up 12%, Spirituality was up a whopping 91%, Humor was up 2.78%, Labor was up 96.78%, Astrology was up 40%, Crystals were up 25%, Anarchism was up 14%, Self-care was up 11%, children’s was up 14%, and Metaphysical was up 2534%!

Where are we selling our books? Funny you should ask:

We are back to being mostly sold in specialty stores. Bookstores now comprise about 11% of our sales, about the same as stores and charming individuals who order directly from us. Gift stores took a hit this year, mostly due to underordering. But wholesalers have been increasing. Distributor represents our export sales.

Remember: when you order directly on our website, the author’s royalties are doubled and everything left over goes into profit sharing for our entire staff!

Thank you for supporting us, our authors, and our team in the last year, whether as a reader, partner, or member of our team. The last four years have been difficult in myriad ways, but it’s been heartening the way our entire culture seems to have turned to books for comfort, meaning, perspective, and a little bit of escape. We’re prouder than ever to get to play a role in bringing people and books together.

Tags: annual report, books, business, business of publishing, microcosm publishing