It’s always a head-scratching dilemma – how to set the ‘list’ price of a self-published book. You can’t compete with the big publishers but it’s good to know how their pricing model works. I’m not going to be precise, because that would take more research than this little piece is worth but I’ll try to put something together from my previous research and experience.
Let’s start with a mainstream novel from a mainstream publisher, say Maddadam by Margaret Atwood. The hardback edition was first published in the UK by Bloomsbury in 2013 with a cover price of £18.99. It’s a substantial book with around 400 thick pages and now available for £15.19 on Amazon UK.
The paperback was published in the UK by Virago in August this year and has a cover price of £8.99. At 496 pages, this is also a substantial book. It is currently available on Amazon for £6.19.
To get a book universally available in all outlets, online and off, a publisher has to sell them to wholesalers and distributors at a discount of up to 60% off the cover price. So the notional revenue per book for that £15.99 hardcover is 40% of £15.99, i.e. about £6.40 and for the paperback it’s £3.60.
Ignoring all the other direct and indirect costs of publishing a book, I know that if I published a 500 page paperback book using Print on Demand it would cost me around £4.25 to print a copy, substantially more than the revenue I can expect if I used that pricing model. Of course, the more I print, the cheaper it gets, but also the more I print, the more cash I need upfront and the more garage space I need.
The conclusion is that you need to look at a different pricing model for self-published or small publisher produced Print on Demand books. If you want to sell books you still need to offer large discounts to resellers, at least 40% and up to 60%. The easiest way to achieve this is to keep your page count lower and set a higher cover price. For example – I recently published For the Time Being, a fairly slim, volume of 206 pages. The cost price of printing one copy via Createspace is between £2.10 and £2.80 depending where in the world it’s printed, and, depending on how many I order at a time, the cost of getting the books delivered can be the same again.
Because For the Time Being was published with no desire or expectation to sell in any large quantities I ordered just 10 copies and ended up paying around £43 including delivery. These copies are for my personal use and therefore I’m not even thinking of them in commercial terms.
But, For the Time Being is also now available on Amazon, and if someone buys a copy from them I am paid the cover price minus the reseller’s discount minus the printing costs. The reseller’s discount varies depending on what channel the book is sold for but if we assume most books are sold directly to the reader from Amazon then the discount is 40%.
I decided to set the cover price of For the Time Being at £8.99, the same as Margaret Atwood’s Maddadam but of course less than half the page count. Anyway that means that if one is bought from Amazon I get £8.99 – 40% = £5.40 minus printing costs of £2.10 then I should make £3.30 gross profit per copy sold in this way. But, because of the way the printing is done in the UK, the actual profit works out at around £2.63.
This may look like a very good margin but not many books are sold this way, if the book is sold through other resellers such as high street bookshops the discount I have to offer to the distributors is at least 55%, reducing my gross profit to about £1.30.
So £8.99 is probably the minimum cover price I can afford to set.
Sorry if all this isn’t very clear, but it’s the closest I can get to logical-ising the process of setting the price of a self-published book.