We believe in generously supporting artists, communities, and the environment. A key part of supporting our communities is providing favorable conditions to local and indie bookstores. How can we achieve this while keeping the remaining two parts of our promise?
The Challenge
This question comes down to whether a small publisher can generate enough profit to provide above average terms to bookstores while also paying well the authors and contributing to the environment.
One parameter that can seemingly achieve this goal is price. But increasing the price is not a solution. The fact is that overpriced books sell poorly. Our goal is to get books into people’s hands, and to create some economic good in the process.
The Problem with Print-on-Demand
Printing on demand allows more books and more varied books to be available. But its economics are not a good fit for our goal, as seen in the following example of a 300-page black and white hardcover with a 40% discount for bookstores and 10% of the list price for author:
| List price | $26.99 |
|---|---|
| Printing cost | $9.57 |
| 55% wholesale discount, split to: | |
| – Ingram distribution (15%) | $4.05 |
| – Bookstore discount (40%) | $10.80 |
| Author’s compensation (9.5%) | $2.57 |
(This example used IngramSpark for pricing.)
The printing cost and the wholesale discount required to get to a 40% discount for bookstores drives the list price too high. Trying to distribute and sell books at such prices is simply unrealistic.
Print Runs
Printing a run of books lets us offer a much lower list price while increasing the share for bookstores and authors. This next table is for the same book printed in a run of 2,000 copies.
| List price | $14.99 |
|---|---|
| Printing cost (incl. shipping from printer) | $3.16 |
| Shipping to bookstore (approx.) | $0.90 |
| Bookstore discount (47% of list price) | $7.05 |
| Author’s compensation (12.5% of list price) | $1.87 |
| Environmental donation (10% of remainder) | $0.20 |
| Publisher (remainder) | $1.81 |
(Recalculated per book. The 47% is a fixed discount for all books. The rest is split so that the author gets the largest part and 10% of publisher’s share are donated to environment.)
This is a price point that bookstores might consider, especially given the above standard discount.
Other Options and Considerations
This model is also attractive for authors. If the author was to self-publish and sell only on Amazon, they would get less money than if they sold at a store: $14.99 list price minus the printing cost minus the minimum 30% IngramSpark discount leaves $0.92 of profit per book; just half of what can be achieved in our short run scenario.
Competition from Amazon is a big consideration. We believe we can ethically offer our books on Amazon if buying the same book at a store is cheaper. Unfortunately, Amazon makes this difficult by offering free shipping and preventing distributors from giving better discounts to other sellers.
Our solution is to act as a seller on Amazon. While this creates extra work and it is pricier for us, it lets us guarantee the book cannot be bought on Amazon without paying full price plus shipping. This gives bookstores an edge even when selling at list price, and the 47% discount creates additional room for discounting.
Conclusion
Printing runs allow us to work with local businesses and offer books at reasonable prices which means more books sold, combined with a higher percentage of the money going to the bookstores.
We’d love to hear your ideas, questions, and suggestions. Please contact us using the contact form or on Twitter.