What Should I Price My Book?
Pricing is always a difficult matter. There are some rules of thumb out there that you should increase the price of your book by a factor of eight times the amount it cost to print it. This allows for industry discounts (see explanation) and a comfortable margin (the difference between what it costs and what you make. Also called profit). However, realistically, one can't always get that much of a margin—especially if you print POD/digitally. That much of a mark-up would make the book too expensive, thus you would lose sales.
Go to your local bookstore and look at the books in your category; look at Amazon and B&N.com. How much are similar books charging? If you can undercut the "going rate" for your topic, it's possible to attract more buyers to your product. What you'll usually find is that the big publishing houses have already priced their books for a budget-conscious market. Your difficulty will be matching this. In some rare cases, books priced higher than the others in its category have sold well—but this is in specific niche markets like business, legal and medical tomes.
Why Do I Have to Discount My Book?
The quick answer is you don't have to. But you won't be able to get the book into a bookstore unless it's specially ordered by a customer. And most customers don't want to wait to make a purchase.
In all cases where a product is produced (manufactured goods, clothing, etc.), wholesale prices are usually half or less (sometimes way less). The actual ROI (Return on Investment) the producer (in this case, you) gets is usually fairly small.
Where Does My Discount Go?
Booksellers & Libraries generally get 40% off the cover price on quantities up to ten. You can give better or not-as-deep discounts. But be even-handed.
Amazon is the only retail outlet we know of that demands—and gets—a 55% discount in their Advantage program.
Wholesalers tack 15% on the booksellers' 40% discount because they:
- create a database that the booksellers can access and order from
- stock titles
- ship books
- receive returned titles (ie: your book didn't sell)
- do the bookkeeping for all this.
Distributors tack 25-30% on the wholesaler's discount because they:
- create a database that the wholesalers (multiple companies) can access and order from
- stock titles
- ship books
- receive returned titles (ie: your book didn't sell)
- maintain a catalog
- sometimes have a sales staff
- sometimes have contacts with companies such as Borders, Barnes & Noble, Costco, etc
- do the bookkeeping for all this
What Are the Discounts If I Print POD?
If you are using LSI (Lightning Source International, owned by Ingram wholesalers), there is a section in the set-up to allow "industry discounts and returns." Select this and your book will be offered at a 55% discount.
You can make the discount "short" at 20%. However, this will make your book a special order only item and defeats the purpose of using LSI.
People who use CreateSpace often only discount their book at 20%. On the surface, this seems like a great idea. Until you discover that you aren't getting the full 32% discount that Amazon customers expect. This will lead to fewer sales. Amazon can't offer your book at their standard retail discount because then they'd lose money on every sale. Offer Amazon the standard discount (55%).
Returns and Other Unpleasant Facts
Returns affect all of the physical book market. It doesn't affect ebooks, of course. However, if you are publishing and may plan to move into physical books, it's a good idea to understand the practice.
What Are Returns?
Back in the Depression, when bookstores were going under right and left, publishers realized they had to do something radical to keep booksellers in business. They came up with the idea of returns—a system whereby any bookseller may return any book, with little regard for how long the book was kept or what condition it was in. No one told the book business the Depression ended seventy years ago. We still have a system that—not to put too fine a point on it—sucks. Few other industries operate on what amounts to a giant consignment scheme.
What does this mean to me as a publisher?
Any book you send out to a bookstore can come back. They will frequently be damaged (see the explanation on what to do with "hurt" books). If they have passed through a wholesaler, it's hard to tell who damaged it, when. While you may file a complaint for a damaged book, it's rare that one wins that dispute.
If you set your books on no-returns, bookstores will not order it, unless they already have a customer for it. Wholesalers will note its special order status in their databases, this will limit the number of orders. Distributors rarely carry non-returnable titles. This works fine if you have a very targeted niche market and the bookstores aren't ever going to stock it anyway.
What If I Tell Wholesalers I Won't Take Returns?
You can refuse to take any returns. This will force your book into the "special orders" category and the books will not be stocked. Unless you have a very strong Marketing Plan (see explanation) for sales outside of the book trade, this is not recommended.
How Do I Cope With Returns If I use a POD printer?
If you are using LSI (Lightning Source International, owned by Ingram wholesalers), there is a section in the set-up to allow "industry discounts and returns." Select this and your book will be offered at a 55% discount with returns. They also allow for the books to be destroyed upon returns. I recommend you go with that option, otherwise you'll be paying for damaged books to be shipped to you. Unless you have a plan to sell these, don't take them.
How Can I Manage Returns?
The best way to manage returns is to have a clear Marketing Plan (see the section chapter on Marketing Plans). After all, a book isn't really purchased until it's bought by the end consumer (not the bookstore). What are you doing to get your customers to go into bookstores and buy that book?
Keep your expectations in line. If you recommend to the buyer at Baker & Taylor that they order 200 books for your signing at the local bookstore, you are part of the problem. You will likely get 190 of those back—at least.
You need to get used to the fact that you will get returns. That's the nature of the business.
What Do I Do With "Hurt" Books?
Returns that are damaged are called hurts. You can sell them on your website, eBay, or the Marketplace part of Amazon. The less damaged ones you can give to your local library or literacy agency.
Distributors and Wholesalers
Distributors and Wholesalers are not needed for those pursuing the ebooks-only path, although both Ingram and Baker & Taylor have "ebook distribution" available. They apply marginally to those doing POD books via a wholesaler (such as LSI (Lightning Source International, owned by Ingram wholesalers)). It's a good idea to be familiar with this part of the business should your books sell so well that you must make the next step and print thousands of books.
What are Distributors?
Distributors take your book and get it into wholesalers and bookstores. They generally have catalogs and some sales force to let the world know that your book exists. They almost always demand an exclusive contract—meaning you can't sign up with other distributors or wholesalers. They usually take 60-68% of retail price (this includes wholesaler fees (see explanation)), depending on the deal you work out with them. All can and will return unsold books (See the discussion).
Note: they do not market (see explanation) your book. Marketing is your business. If you don't tell the world about your book, all the distributors in the world stocking your book won't matter—you'll get them all back.
It's up to you to let your distributor know when you have a promotion. Discover the name, phone number (and e-mail) of your buyer in the company. Alert them when you are doing a signing, events, or know about a high visibility piece of publicity coming out. Then they can order more books so they are available for the coming demand.
How do I get a distributor?
You have to be willing to print a few thousand books. The books must be of the highest professional quality. The book must be well-targeted or exploit a niche that is not well-served. You must have a strong Marketing Plan. You'll also need to commit to spending some money advertising with the distributor's connections.
Many distributors don't wish to deal with small publishers. Attracting a company is often difficult. Conduct a search online. Ask fellow small publishers. Join IBPA and SPAN and see what offers you can get to join various member distributors.
What are Wholesalers?
Wholesalers are the "middlemen" of the book world. Getting your book into a wholesaler is, in general, a good thing, in that few booksellers will order directly from a small publisher. Most wholesalers charge some fee to list you in their database. They all require a 55% discount to stock an item. All can and will return unsold books ( See the discussion).
Some small press / self-publishers insist that wholesalers take less (ie: 20%). This guarantees that the book is marked "special order only" and will only be ordered by booksellers who have a customer order.
The two biggest wholesalers are Ingram and Baker & Taylor (see explanation), but there are many smaller ones.
Marketing (see explanation) is your business. If you don't tell the world about your book, all the wholesalers in the world stocking your book won't matter—you'll get them all back.
If you are distributing yourself, it's up to you to let your wholesaler know when you have a promotion. Discover the name, phone number and e-mail of your buyer in the company. Alert them when you are doing a signing, events, or know about a high visibility piece of publicity coming out. Then they can order more books so they are available for the coming demand.
How Do I Get in to Baker & Taylor (also called B&T)?
Join SPAN (Small Publishers Association of North America) or IBPA (Independent Book Publishers Association) to get your book in to the Baker & Taylor small press program. B&T will require you to send 3-5 books and sign an agreement to sell books to them at a 55% discount.
You can demand they take a lower discount, but your books will only be special-ordered, not stocked. Contact them by going to this website get the pdf for "Establish a Relationship" http://www.btol.com/pdfs/EstRelationship.pdf
How Do I Register a New Title With Baker and Taylor?
If you are already a vendor for Baker & Taylor, go to their webpage to put new titles into their database.
How Do I Get into Ingram?
If you are a one- or two-book publisher, Ingram doesn't really want to know about you. That's harsh, considering they are the Number One wholesaler in the Industry and the first question you are likely to hear from a bookseller is "Are you in Ingram?" One way around this is to get in with a distributor who stocks Ingram.
Lightning Source, Inc. or LSI is a digital printer that is owned by Ingram. Under LSI's book distribution program, you can have your book printed to fulfill direct orders Ingram receives from booksellers, libraries and on-line companies (ie: Amazon).
Ingram now has an ebook distribution service called CoreSource. I'm not aware that this area of Ingram is any friendlier to one-and two-book publishers.
How Do I Get My Book into Libraries?
The best way to get noticed by acquisition librarians (the people who buy for one or many branch libraries) is to get reviewed in one of the pre-publication review magazines like Library Journal. Failing that, there are some programs that, for a fee, will send a flyer about your book (which you design and pay for) to various libraries, reviewers or schools. IPBA members are offered these opportunities several times a year.