One of the most important questions you’ll need to answer is “How much should I charge for my book?” This is not a decision to make lightly — or greedily. Determining the best price for a book depends on a variety of factors, including the following:
1) The price of similar books. Check the market for comparable books, including books on similar topics and of a similar trim size and page count. If, for example, you’re writing a regional travel book, and you discover that other books on the region typically sell for no more than $19.95, you’ve probably found the “upper bound” for the price of your own book. If, however, your book is shorter, or smaller, or contains fewer photographs than those that cost $19.95, you may wish to charge less. If it is larger, longer, or better illustrated, you may be able to charge slightly more.
2) The “per unit” cost of your book. In addition to the cost of printing your book, be sure to take into account all the “hidden” costs, such as editing, proofreading, interior artwork/illustrations (including having artwork prepared for printing), cover design, etc.
3) Discounts. This is one of the most important factors in pricing your book, and the most easily overlooked. It’s easy to get carried away by dreams of avarice when you start thinking, “Wow, my book costs only $5 per unit and I can charge $19.95 for it — that means I get $14.95 in profit per book!” In reality, many, if not most, of your books may be sold at a discount from the cover price — and some may be sold at a “deep” discount of up to 60%. If you sell your book through distributors, that means you may only take in $7.98 on that $19.95 book — a whopping profit of $2.98 over your “per unit” cost.
Discounts are an inescapable part of the book business. While you should be able to sell part of your inventory directly to the consumer at full price, a large percentage of your sales are likely to be through distributors, wholesalers, and bookstores — and each of these will require a discount. Even direct consumers are likely to expect a discount for multiple-copy orders — especially if you have a book that is likely to appeal to groups (such as classes, support groups, professional groups, etc.).
Typical discounts include:
1) Bookstore “STOP” (Single Title Order Plan”) orders. These come to you when a customer orders your book through a bookstore, and the bookstore orders it directly from you. Generally, a STOP order will involve a 40% discount, though I’ve received a few that asked for only 20%. In many cases, the order will include payment, or a blank check that you’re expected to complete with the discounted price and the cost of shipping. (Some STOP orders make only a small allowance for shipping costs.)
2) Distributor discounts. Distributors like Ingram and Baker & Taylor are often the best means of getting your books into bookstores and libraries. However, they also demand a steep discount — often as much as 55% or 60%. The good news is that a distributor can mean good business for you; if your book sells well, you may get orders for several hundred copies at a time.
3) Online bookstore discounts. Amazon.com’s Advantage Program for small presses and self-published authors can be a helpful way to move your books online — but it also means accepting a discount of [XX%]. Before you sign up for such a program, keep in mind that if your book is listed in Books in Print and is available in a tangible format (print or disk), it will be listed in the online bookstores anyway; you don’t have to sign up for the Advantage Program just to get your book into Amazon.com. However, if your book must be special-ordered from the publisher (you), customers will be told that delivery may take several weeks, while the Advantage Program guarantees immediate delivery. If your book is time-sensitive — e.g., customers who want it are going to want it now, not six weeks from now — this may be the route to take.
4) Your own discounts. As a publisher, you’ll want to set quantity discounts to encourage customers to purchase more than one copy of your book. This is especially important if your book is likely to appeal to groups of any kind — professional groups, support groups, classes, etc. The good news is that it’s up to you to decide where to set discounts (i.e., how many books one must buy to receive a discount) and how “deep” to make those discounts.
I finally settled on the following discount structure for my own self-publishing venture:
- 1-2 books – no discount
- 2-9 books – 10%
- 10-19 books – 20%
- 20-49 books – 30%
- 50+ books – 40%
Other self-publishers have different discount rates. Some also offer different discounts for different types of customers. For example, some offer a higher discount to businesses (or nonprofits) than to “ordinary” customers.
Keep in mind that some customers will also expect YOU to pay for shipping. Most distributors will not pay for shipping, and neither will many bookstores. If you anticipate doing business with bookstores and distributors, keep this in mind when determining the price of your book.
Too High vs. Too Low
The two basic mistakes one can make in setting a price for one’s book is setting that price too high, or setting it too low.
Setting your price too high has obvious consequences: It will discourage customers. If your book is priced significantly higher than comparable books on the market, you’re likely to find that it just doesnÕt sell. The good news is that if you do set your price too high, it’s always easy to lower your price, through discounts, “sales,” or simply by lowering the book’s price altogether.
Setting your price too low can actually be worse than setting it too high. The obvious risk is that by setting your price too low, you’ll leave yourself too narrow a profit margin, especially after discounts. However, another problem with too low a price is that it often sends the wrong message to the consumer. Believe it or not, consumers don’t always shop for the lowest price. They shop for a price that conveys the impression of “value.” If your book is priced too low, it may send the message that your product is “cheap” — and therefore of no real value. Rather than buy your “cheap” book, customers may actually choose to buy a book that is slightly more expensive, because they feel that they are getting more for their money. And once you’ve priced your book too low, it’s very difficult to raise the price!
Another issue in pricing is “competition.” Once you’ve determined what other books in your market niche are selling for, you may be tempted to set your price lower so as to undercut the competition. If you do so, don’t go overboard; make the reduction a small one rather than a large one. If, for example, a comparable book sells for $17.95, you might wish to offer yours for $14.95 — but don’t offer it for $10.95. A consumer looking at two books with respective prices of $17.95 and $14.95 will be likely to consider the books “comparable” in most respects — and all else being equal, will likely take the lower-priced book. If, however, one book is $17.95 and the other is $10.95, some consumers may assume that the more expensive book is better simply because it IS more expensive: by pricing your book so much lower, you’re calling attention to the possibility that your book may not be comparable in quality.
Pricing is a tricky issue, and you may find that you have to change the price of your book before you run out of inventory. Consequently, it’s often wise not to print the retail price of your book on the cover of the book itself or within the ISBN. (If you change your book’s price, you may also have to change the UPC code.)
Revenue vs. Profit
One final thing to remember when considering the price of your book is that the difference between “per unit” cost and “price” is not profit. It’s revenue. You will find that you have many other expenses in the course of running a self-publishing business — and those expenses can eat up your book-sales revenues at an alarming rate of speed.
Moira Allen is the editor of Writing-World.com and the author of more than 300 published articles. Her books on writing include Starting Your Career as a Freelance Writer, The Writer’s Guide to Queries, Pitches and Proposals (Second Edition), and Writing to Win: The Colossal Guide to Writing Contests.