Let’s Talk About the Price of Books
People have strong opinions about how much books cost, and among every group of readers, I hear or read questions about how to get books cheaper—or for free.
Personally, I hold Amazon responsible for training readers in general to expect $0.99 ebooks and $1.99 paperbacks. Amazon sells books as loss leaders, so their pricing isn’t realistic in the book world.
I’ve been in the publishing industry for twenty years. I launched my first publishing company in 2002, back when “self-publishing” was a dirty word. I’ve learned from traditional publishers and mid-sized independent presses. I was one of the early adopters of on-demand printing, years before CreateSpace, before IngramSpark, back when Ingram’s on-demand printing company, Lightning Source, was in its early years.
On-demand printing has pros and cons. The pro, obviously, is that books are only printed when purchased, saving on warehousing costs. However, bookstores are less likely to carry on-demand titles, and many publishers set up their titles with no returns—a dealbreaker for bookstores, which run on consignment and depend heavily on the ability to return books for full credit.
The biggest disadvantage to on-demand printing is that the unit print cost—the cost to print and bind one copy of one title—is higher than printing larger digital runs (500+ copies on a digital printer where toner sits on the surface of the paper) or offset runs (1000+ copies on an offset printer, where ink from plates is pressed into the paper). These days, the quality of digital printing is nearly indistinguishable from offset printing, a huge increase in quality over the past 20 years. Still, the more copies one prints, the lower the unit cost.
Why does the unit cost matter?
In the traditional book trade, everyone gets a piece of the retail price. A distributor warehouses books and either charges the publishers fees for storage, picking, packing, freight, and returns or takes a cut of the sales price (up to 20%). The distributor sells books to wholesalers (on consignment) at a 55% discount off the retail price. Wholesalers turn around and sell books to bookstores at a 40% discount off the retail price. Bookstores decide if they want to discount the books or not and sell them accordingly to customers. Books that don’t sell within a “season,” or about three months, are returned to the wholesaler for credit. The wholesaler doesn’t want a lot of copies of the same title in stock, so they may return them to the distributor for full credit. The distributor will then charge the publisher for the returns. Along the way, there are always shipping costs.
We have a joke in the book industry: the only people getting rich in publishing are FedEx and UPS.
And, well, Amazon is getting rich too.
Amazon now demands a 57% discount from distributors. Bear in mind, the publisher gets what’s left over after the discounts, so anywhere from 25%-43% of the retail price. Out of that income, they have to pay overhead, salaries, printing costs, shipping, etc. And royalties. They also need to pay their authors royalties from book sales.
Some authors choose to sell their books directly through Amazon. This eliminates the everyone-gets-a-piece issue, but also means bookstores won’t carry their title. And why would they? Bookstores and Amazon are competitors.
In 2022, we now have issues with paper supply shortages, labor shortages, and all sorts of other workplace issues that COVID-19 had caused. This means the cost of paper, shipping, and labor have all gone up. A lot.
Let’s look at a real book. It’s mine. It’ll be coming out later this year. It has a trim size of 5.25” wide by 8” high. It’s small enough to fit into a bag or to hold easily, whereas 6” x 9” trade paperbacks can become unwieldy. It was a design decision.
It has 304 pages. Technically, it has 301 with three blank pages, but offset presses require page count to be divisible by 8 because of how they print signatures. So 304. It’s printed on white paper. Nothing super fancy. The only fancy thing is that part of the cover is embossed. The design practically demands embossing, which is not available through Amazon. And honestly, if you’re going to pay full price for a book, I believe you should get a nice book. Not a mediocre one.
If I sold this book only through Amazon, they require a minimum retail price of $7.50. It will cost $4.50 to print, and that’s without the embossing. But that doesn’t mean I get $3.00 per book. No, that’s Amazon’s take. I get nothing at that price. Zero. I’m giving the book away.
Because Amazon works on a percentage, not a straight fee per book, if I priced this book at $20.00, it would still cost $4.50 to print and Amazon’s take is $8.00. I would get $7.50. Not bad, but it leaves me locked into Amazon.
What if I wanted to list it with IngramSpark as well and use on-demand printing? That same book, to print one copy, will cost $5.54. Still without embossing. If I priced the book at $13.00 and used industry-standard discounts (55%), my compensation is $0.31 per book (not a typo). IngramSpark gets the rest. To get the aforementioned $7.50 I could get above from Amazon, I’d have to price the book through IngramSpark at $29.00 retail.
Now, I could reduce the discount, but that means fewer resellers will carry it. Fewer resellers means fewer places that readers can buy it.
Now, let’s look at printing a medium-sized run digitally and a larger run on an offset press.
I requested a quote for printing 501 copies (discounts kick in over 500) from a local digital book printer I trust. Not including that embossing, copies are $6.11 each. If I printed 1001 copies, the unit price falls to $4.99. 1501 copies drops it to $4.87 per book. But a bonus: this printer is housed with my distributor, so no shipping costs. Yay!
You’ll notice that this is quite a bit more than the $4.50 that Amazon would charge. But again, using Amazon’s KDP Paperback to print the book locks it in for sale only on Amazon. Printing it elsewhere and warehousing it at my distributor means anyone can order it anywhere.
Using digital printing and the industry standard discounts (55% for all but Amazon; 57% for Amazon), if I priced the book at $14.95, I’d be giving it away. If I priced the book at $20.00, I’d be left with $2.50 per book. And that’s not including any other costs beyond printing.
But what if I could get the unit price even lower? I can, with an offset printing. And printing more copies.
My go-to offset printer can print them for $4.80 each if I print 1250 copies. Or if I print 1500 copies, I can get the unit cost down to $4.25 including freight and embossing. I’m not inclined to print more copies than that for a first printing. Initial interest tells me I can probably sell a thousand fairly easily, and if they go fast, then the additional 500 is a buffer until more can be printed. Turnaround time for printing, whether digital or offset, is upwards of two months minimum right now.
So, my best-case scenario: print 1500 copies at $4.25 each including the embossing and freight to my distributor.
Now, in reality, I have timelines to meet, and printers are massively backlogged, so this isn’t actually going to work. I need books available sooner, which means doing a shorter (smaller) print run at that $6.11 unit price while the offset printers are doing a longer (bigger) print run at $4.25 each.
My goal is to make $6.00 per book with the industry discount. That may sound great, but out of that, I need to pay myself (as the author) royalties of 25% or $1.50, plus distribution fees (warehousing, shipping, returns) and overhead (software, internet, licensing, depreciation on equipment, etc.). My time and effort and skill are valuable and deserve compensation. $6.00 doesn’t go very far.
If I average the printing cost per unit, looking at the total number of books to print, it comes out to $4.72 each, including freight and embossing. And that’s about $10,000 up front that I need to pay. To get $6.00 after discounts, I need to price the book at $24.95.
If that sounds like a lot to pay for a book, remember this:
Of that $24.95…
- Amazon gets $14.22 OR
- The wholesaler gets $3.74 and the bookstore gets $9.98 when and if the book is sold
Of the $11.00 or so remaining…
- The printers get $4.72
Of the $6.28 remaining…
- The publisher gets $4.71 to keep running the company
I get $1.57.
If you really want books to cost less, it’s not the authors or the publishers who have to change.