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Llumina prices
your book with two factors
in mind: the distributor discount and the cost of production. Here's
how it works: The distributors, Ingram, Baker and Taylor, and Amazon get a
discount off the list price of the book. For POD books this is usually 40%
to 55% of list.
So they pay $4.50 to $6.00 for a $10.00 book. Out of this discount they pay their
expenses and extend a discount to booksellers all over the world. If they give a bookseller 25 - 35% and keep 15 - 20% out of that
discount, they're in
good shape.
The other factor
is cost of production. POD
is expensive when compared to offset printing (in which thousands of copies are
printed at a time). We usually figure the cost of production as 25 to 30%
of the retail price of the book. So, if a book costs $2.50 to produce,
then the price of the book would be $10. Since distributors get from 40%
to 55% and the cost of production is
25% (approximately 75% total), we've now got $2.50 left to pay the author's royalty of 10%,
$.50 toward administrative costs, and Llumina's
share, which in this case is 10%. That's it. There's no mystery about it.
If a book costs $10 to produce then it has to sell for between $35 and $40. If it costs $5 to produce then list has to be around
$20. How do we figure cost? Easy.
We multiply the number of pages in the book by the amount the printer charges
per page. Then we add in the cost of the cover. For a paperback the
cover is inexpensive (between .90 and 1.55 per cover depending on size). A
hardcover is much more expensive ranging from $6 cost for laminated cover to $7.55
cost for a hardcover with dustcover. So if you've got a 112 page book with a
dustcover, the cost will be around $10 and we'd have
to sell this book for close to $40. Since this is way too high, we use a lower
margin to get a lower price. The distributor now
gets 45%, and the cost now represents about 30 to 35% of the list price.
All well and good,
EXCEPT
with a 45% discount (around $32), this book may still be too expensive to compete with books
printed on an offset press in large quantities. To get a competitive
price, we may have to use a 40% discount, which would bring the price down to
$27.95.
Some POD publishers will tell you that they can produce a single hardcover
book for a price that allows it to retail for as low as $16. But this is
not realistic given the costs of printing. Since
there's very little play in these numbers, they can only be selling such books
for such little money by reducing the distributor discount. I've seen some publishers go as low as 20%
(and one who doesn't include
any distributor discount).
But if the distributor gets only 20% (or nothing), what is going to be left for the
bookseller? 5%? What bookseller will buy a book they can't make a profit on?
Because of this, we usually price the more expensive books by giving the
distributor a 40 to 45% discount, and we cut our own margin to the absolute
minimum. The author's royalty remains at 10% of list. However, the
author is affected when buying books because the cost of production is a higher
percentage of the list price and our discounts to the author have to reflect
that.
Use our online calculator to figure the costs of your
book
This should explain
everything about pricing, but if you still have questions, please contact
Deborah.
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