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Free Printing Costs Too Much

I had a request yesterday to do some more publishing math, comparing the self publishing route to the subsidy press route. I didn't want to single out any particular author services company, and most of them have too many hidden costs to make a real comparison in any case. So what I'm going to do is lay out the basic math to let you make the comparison yourself. To keep it interesting, I'm going to compare publishing through Lightning Source to getting the books printed free. In keeping with the extremes, we'll do a 20% short discount book with Lightning (the minimum they currently allow), a 55% book (the standard which results in a 40% discount to bookstores ordering through Ingram), and a low cost distributor for the book with free printing, say, 65%.

In all three cases, if you aren't already a publisher, you'll have to buy a block of ISBN numbers, around $250 with the fees. We'll call the book in question a 200 page 6" x 9" paperback, with a cover price set of $15.95. For all three cases, the set-up costs with the printer will be about $100, so free wasn't exactly free:-) Also note that neither Lightning Source nor our free printer are going to help you prepare the book for publication, you have to present them with a ready-for-printing PDF file.

Case #1 - 20% discount

200 pages x 1.3 cents per page = $2.60 plus $0.90 for the cover = $3.50 for printing.

20% discount off the cover for sales into distribution is $15.95 x 0.80 = $12.76 wholesale price

Publisher net profit = selling price minus printing cost = $12.76 - $3.50 = $9.26 per book.


Case #2 - 55% discount (plus accepts returns)

200 pages x 1.3 cents per page = $2.60 plus $0.90 for the cover = $3.50 for printing.

55% discount off the cover for sales into distribution is $15.95 x 0.45 = $7.18 wholesale price

Publisher net profit = $7.18 - $3.50 = $3.68 per book.


Case #3 - Free printing and a 65% discount into distribution

Printing cost = free (No, I don't know of any printers who print books for free)

65% discount off the cover for sales into distribution is $15.95 x 0.35 = $5.58 wholesale price

Publisher net profit = $7.18 - $3.50 = $5.58 per book minus S&H to distributor


The 20% short discount book will be listed at Amazon and other online stores, and will be available through special order order through bookstores, though some may resticker the price, charging the customer more than the cover price so they can make a profit.

The 55% book with returns will be just as attractive to bookstores as any large trade book on a price/profit basis, but none of them will order the book for stock unless you have terrific marketing to create demand.

The book printed free and placed with a full line distributor for a 65% discount might get into some bookstores if you've done all of your homework and produced a quality book. But you will have to pay for shipping those books to the distributor, be prepared to get them all back, and be prepared for the distributor to fail owing you a pot of money, as happens several times a year with independent book distributors.

6 comments:

Dan said...

Thanks for the numbers!
Any idea what % discount is the most attractive to Amazon, in terms of how they display book search results, etc.?

Morris Rosenthal said...

Dan,

As near as I can tell, they don't currently take the discount into account in the recommendation algo.

Morris

Hood Press said...

Morris, unless I've missed a post or two within the archives, I am curious if you could do anin-depth analysis of what you've seen in returns--who are the worst type of store offenders (i heard someone mention that college bookstores are the worst for returns), what a typical 6x9 150+ page LSI book costs for returns, and the likelyhood of getting a slew of unwanted returns.

Jason

Morris Rosenthal said...

Jason,

OK, might even be a candidate for my first video:-)

Morris

tabt321 said...

Morris,

I've appreciated your many financial analyses in this and other blogs but have a larger question: does anyone actually buy paperback books by JoeBlow for more than $10 when they can get their choice of NY times bestsellers for $7-8.95?

Most POD don't allow authors to set their own prices and I would love to see their revenue from book sales versus all the 'set-up costs'

Kind of reminds me of the 'book doctors' who will edit anything for a few hundred bucks but none of their authors ever publish.

Thanks

Steve

Morris Rosenthal said...

Steve,

Self published authors don't compete with bestsellers on any level. If you take the math from the post, you can sell books for $7 or $8 dollars by going with the short discount and taking a very small cut for your profit, that cut will still be larger than most authors earn in royalties. But you're talking about mass market fiction, something you would never use print on demand for, it's built around printing huge numbers of books on cheap paper in small format. I don't remember the last time I bought a book that was less than $15, with the exception of out-of-print classics. Keep in mind, the vast majority of trade books don't compete with bestsellers on any level either, they sell their 2,000 copies and go quietly to the remainder bin.

Self publishers can set their own cover prices by definition. Some of the most successful self publishers sell books well in excess of $30 each. When you are the publisher, you can do whatever you want. The POD's you are referring to are subsidy presses, author services companies. They aren't in the business of publishing books, they are in the business of selling services to authors. It isn't a business model for the author, it's a business model for the subsidy press. I've never used one, but I do recommend them to authors who just want to pay a fee and get their book in print. There's little point setting up your own publishing company if you don't want to be in the publishing business.

I personally know quite a few self publishers, including myself, who earn a professional living publishing books in the $10 to $20 range, I even know a couple who earn over $100K, though I'm not there myself. It comes down to writing books for which there is a market, and being a successful marketer. See my self publishing business flowchart at http://www.fonerbooks.com/selfdiag.htm.

Morris