Publisher Business Model

A soft cover book, perhaps 6” x 9” or other industry standard size for a trade paperback would be priced retail anywhere from $12 to $30 for consumer distribution, up to $50 for a professional book, and even higher for a textbook. An add-on CD might be $20, and a book plus CD package might sell for $40 minimum.

Although this may sound like a small number, it is realistic to think in terms of selling 600 to 1,200 copies the first year (50 to 100 copies per month). Contrary to popular opinion, nonfiction books are perennials, and sales can build over time, leading to subsequent editions. Libraries are a great market for this type of book.

Plan for between 50 and 250 complimentary copies to send out to friends and clients and for review purposes. While some copies will be sold at retail, many will be sold as a discount—something to consider in your retail pricing.

It might seem that if you worked with an established commercial publisher who would bear some of the costs that you would get to break even on some of them faster. Ironically, this may not be true.

If you self-publish at $20 per book retail and you sell the book at one-third off on all copies, the price out the door becomes about $14. Assuming that your financial layout is $10,000, including your comp copies, you need to sell about 800 books to break even.

Alternately, let’s say you work with an established commercial publisher. You will still incur many of the costs, so let’s assume they would be $8,000 (book proposal coach or writer/editor/marketing efforts). A publisher will generally have to discount as much as 40 percent to 60 percent. Optimistically, using the same one-third off on all copies, that’s a price of $14 per book—the same as a self-published book. But wait—your royalty (at 10 percent) gives you a little over $1 for each book sold. So in this case, you have to sell about 600 copies before you reach breakeven on your own expenditures.

As a side note, the publisher will have to sell 10,000 to 20,000 copies to reach its breakeven, which you might think would be an incentive to sell that many copies. Unfortunately, it is a regular part of the book publishing business model to expect 70 percent to 90 percent of titles not to get to breakeven. Their business model is to take a relatively small risk on very few new authors, not spend much money on those authors in marketing, and make their money with books by nationally known, well-established authors.

Tanyab 08:18, 5 December 2008 (UTC) | www.publishing-store.com