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Q: Breakdown of Book Cover Price ( No Answer,   7 Comments )
Subject: Breakdown of Book Cover Price
Category: Business and Money
Asked by: inkvisitor-ga
List Price: $20.00
Posted: 01 Feb 2005 17:36 PST
Expires: 03 Mar 2005 17:36 PST
Question ID: 467279
I would like to find out the precise breakdown of where all the money
goes (to which entities, and to which expenses, and how much the
publisher can finally book as profit), on sale of a typical
non-fiction hard cover book.  For example, if the book's cover price
is $ 25, who gets what?  I know that often a retailer will not sell
the book at full cover price, choosing to discount as much as 40% off the cover
price.  I have also heard that as between the publisher and the
retailer, typically a retailer will be entitled to keep as much as 50%
of the cover price.  I understand this to mean that the retailer who
is choosing to sell more books each at a lower margin, than holding
out for the full cover price.  For a $ 25 book, the retailer could
keep 50% ($12.50), and return 50% / $ 12.50 to the publisher. 
Retailers who discount 40% may end up keeping only $ 2.50 themselves, and
allowing the buyer a $ 10.00 discount off the cover price they pay $
15.00 ($12.50 to the publisher and $ 2.50 to the retailer) instead of
$ 25.00.

But the publisher has many things to cover from the (say) $ 12.50 it
receives.  How much (as a %, or in dollar terms) does it pay to the
distributor?  To warehousing?  To the author (advance and royalties ?
calculated on what ? the cover price or the amount the book is
actually sold for)?  To its own editorial staff?  Production team? 
Artists (for cover art and for illustrations)?  Etc.?  Marketing
efforts?  Sales efforts?  Any other significant cost component that
must be covered?  Etc.  Also, what profit can it ultimately expect to
make on each copy?

Request for Question Clarification by siliconsamurai-ga on 02 Feb 2005 10:36 PST
See my comment. If you are seeking advice on how to get into
publishing or how to profit from selling your own book, I can
certainly answer that. Let me know if that is your actual goal and if
that is what you really want to know.

Clarification of Question by inkvisitor-ga on 04 Feb 2005 04:34 PST
What I need at this stage is an ability to accurately (insofar as
possible) project costs, based on reliable assumptions).  These would
relate to a given book project (how much to get it produced, printed,
etc.., with each aspect / component clear), and also relate to start
up and operation of a small publishing business.  The former need is
more urgent than the latter.
There is no answer at this time.

Subject: Re: Breakdown of Book Cover Price
From: pinkfreud-ga on 01 Feb 2005 18:42 PST
This might be of interest to you:

"Per unit operating profits for a typical hardback book are $0.37
(with a retail price of $19.95).

The breakdown of these costs are as follows:

Revenue to Publisher (i.e.
price paid by wholesaler or
Manufacturing cost:           $ 2.00 
Publisher overhead:           $ 3.00 
Returns and allowances:       $ 3.00
Author?s royalties:           $ 2.00
Total publishing costs        $10.00
Publisher?s operating profit: $ 0.37"
Subject: Re: Breakdown of Book Cover Price
From: siliconsamurai-ga on 02 Feb 2005 10:34 PST
As both a commercially published author (five books) and a
self-published author, I must point out that the answers to your
question depend not only on the publisher but also on the specific
book so there really isn't a simple enough answer to present here.

As with many businesses, each book is taken on an individual basis -
for example, more than 100% of the actual sales price may simply go to
a very famous author such as a president or first lady and the
publisher will take a big hit to have the prestige of being the
Subject: Re: Breakdown of Book Cover Price
From: inkvisitor-ga on 02 Feb 2005 17:50 PST
Many thanks, Pinkfreud.  The excerpted data and (especially) the link
you provided were helpful.  They help to put things into perspective
perhaps more than hard numbers (at the link, for example, there was a
fairly strong attack on the accuracy of the data listed).  An
interesting discussion anyway.

Siliconsamurai, I appreciate your inputs as well.  I am trying to get
hard data on costing and all relevant components thereof so I can
accurately (insofar as possible) project them for a book plan a friend
has asked help on.  I recognize that not all books are created equal,
and costs will vary depending on a great many factors (how much color
artwork is included, size and format, quality of paper, type of
binding, etc.).  But I am hoping to get as useful info as I can.  At a
later point, if the project proceeds, no doubt there will be occasion
to seek additional info on other publishing-related questions.

Subject: Re: Breakdown of Book Cover Price
From: inktreemarketing-ga on 04 Feb 2005 11:37 PST
$10.37 actually seems a bit high to me. The bookstores take 40%
standard and most distributors take 30% of the remaining proceeds.
PLUS, many distributors will actually charge a fee to list you in
their catalogs.

$19.95 - 40% = $11.97
$11.97 - 30% = $8.38
Subject: Re: Breakdown of Book Cover Price
From: johnkremer-ga on 04 Feb 2005 23:49 PST
Here is the breakdown for a $25.00 book if you use a book distributor
(who then sells your book to bookstores, wholesalers, and chain
stores). If you used only wholesalers, then you get 45% of the retail
price, but you wouldn't generally sell as many books.

Distributor gets about 65% = 16.25
Publisher is left with 35% = 8.75

Royalty to author: . . . $2.50
Printing cost: . . . . . $2.00
Cover design (prorated): $1.00 (prorated over 2,000 copies)
Advertising: . . . . . . $1.25 (promotional costs are generally 5%)
Overhead . . . . . . . . $2.50

Small publishers don't worry about returns and allowances. It's just
not in our budgets. We figure overhead at 10% of retail price. As you
can see, at a printing of only 2,000 copies, you will probably lose
money if you go by normal financing.

Things you can do to reduce cost: Use wholesalers rather than
distributors. Use a cheaper cover designer. Print more books to reduce
per book cost. Cut out the author: Write your own books. Or, as many
publishers are doing now, pay the royalty based on net sales rather
than retail price. Cut overhead by working out of your home.

Ways to increase income: Sell direct to consumers as much as possible.
Sell rights. Sell to catalogs and other special sales. Sell via your
own Internet site. Sell your book on as a retailer (you see
the listings for used or new books; you can do the same by becoming an
Amazon merchant). Raise your price. Create a book/tape set that you
can sell at a higher price direct to consumers.

That's my short answer.

John Kremer, author of 1001 Ways to Market Your Books
Subject: Re: Breakdown of Book Cover Price
From: siliconsamurai-ga on 13 Feb 2005 08:54 PST
If you'd like a quick and dirty quote, I suspect you can get a
100-page trade paperback setup and a single 20-book print run done for
about $1,000 presuming you cut corners.

After that you should be able to get single copies printed at about
$15 each (obviously less in quantity).

I know that isn't exactly what you asked but I thought it might help.

I am basing those prices on reputable self-publishing outfits which
would also help list your book on Amazon and probably elsewhere.

Photos, color, or special cover art could easily raise that initial
setup price to $10,000 with 20 copies.

You can also buy a full copy of Adobe Acrobat (not just the free
reader) and publish an e-book for almost no additional cost, putting
it either on a web site to download or printing up CDs (I'm doing that
now with a book which has lots of photos.)

Just a couple options to consider but since you are obviously thinking
of doing this yourselves rather than trying to find a publisher to do
everything, the marketing costs will kill you anyway so why not go
e-book and keep the cost of duplicates down to a few cents per copy?
Subject: Re: Breakdown of Book Cover Price
From: inkvisitor-ga on 16 Feb 2005 04:40 PST
These posted comments are indeed helpful.  Thank you all.

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