DEFINITIONS
Retail margin is basically the difference between your book's wholesale price and your book's retail price. For example, a book with a cover price of $10 and a wholesale price of $5 has a 50% retail margin.
Wholesale price is the cost of your book to a retailer. To use the same rudimentary example, a book with a cover price of $10 and a retail margin of 50% will be sold to a retailer for $5.
Retail price is the same as cover price or selling price. This is the cost of the book to the end consumer (the reader). The retail price is typically printed on the cover of the book and also "embedded" within the barcode on the back. For example, a book with a wholesale price of $5 and a retail margin of 50% will have a retail price of $10.
As you can see, retail margin, wholesale price, and retail price are interconnected. By having two figures, the third can be calculated.
The fourth definition to be aware of is the trade discount, which is the percentage off the retail price that a wholesaler or distributor pays for your book. Since the retail margin is a portion of the trade discount, the trade discount always exceeds the retail margin. Distributors typically expect between 50% - 70% in order to provide an acceptable margin to the retailer.
MAKING DISTRIBUTION WORK FOR YOU
It should come as no surprise that the amount of distribution your book enjoys rests largely upon its trade discount. Generally, the higher the discount, the greater the distribution.
Think about it - distributors want to make money, too. So do retailers.
While your book's trade discount is but a piece of your pie (albeit a big piece), it is the entire cake for distributors and retailers, who together must split the take. The greater the number, the greater incentive they have to distribute your book, sell your book, and market your book, etc.
The proper trade discount depends upon each author's intentions, and can vary from author to author just as readily as from book to book. Obviously, the higher the retail margin, the higher the cover price, so authors interested in maintaining the lowest cover price possible will often opt for a lower retail margin.
Conversely, those authors who long for the best distribution possible will elect a higher trade discount, even though their cover price will increase accordingly (or their profit will decrease accordingly). Non-fiction or niche-markets are less affected by higher retail prices and greater distribution is often advantageous in finding those markets.
Often, the author will have little to no say in what trade discount to offer for their books -- its whatever the distributor mandates.
Trade discounts can be as low as 20% to successfully get listed on Internet retailers like Amazon.com, who manage to make a profit with such low margins through EDI (electronic data interface) with distributors like Ingram and on-demand publishers like iUniverse and Outskirts Press.
By comparison, trade discounts can be as high as 75% - 80% when dealing with a niche wholesaler, or when attempting distribution for a book that does not have a proven market. In these cases, the distributor may be padding the coffers a bit in anticipation for a "harder sell" and perhaps, also, in preparation for offering an increased retail margin to close the deal.
INDUSTRY STANDARDS
Industry standards for retail margins are difficult to define because, ultimately, it comes down to negotiation between all parties involved. Publishers have the power to negotiate with distributors, who have the power to negotiate with retailers, who have the ability to negotiate with the reader, but the typical trade discount is around 55%, which allows for a typical retail margin of 40%.
Publishing-on-demand is removing some of the participants in this little dance, and as a result, the same piece of pie is being divided among fewer people, resulting in more money for the remaining players (especially the author).
Brent Sampson is the President & CEO of Outskirts Press Publishing at outskirtspress.com and author of Publishing Gems: Insider Information for the Self-Publishing Writer. Information at outskirtspress.com
Airbnb cleaning service Glenview ..Do you love someone very deeply? A spouse, son, daughter,... Read More
Editorial guidelines, also known as writer's guidelines, are the rules... Read More
Why is it that so many people don't take writing-as-a-job... Read More
Among the various foolproof methods used to boost traffic to... Read More
Creative Writing Tips ?The writer, who doesn't have the time... Read More
When I was young, I used to talk to myself.... Read More
Most people can easily identify with the dreaded "writer's block".... Read More
All sales begin with some form of advertising whether it's... Read More
1. Write it fast, fix it later.2. Commit to writing... Read More
What a lack of research could do to you.When creating... Read More
Every hero has a seminal insight - the apotheosis. Once... Read More
Being a great writer is no longer enough if you... Read More
Chaos and confusion come when established rules and procedures are... Read More
Whether you keep a separate spiritual journal or just want... Read More
Everybody knows writing a story is not easy. Like the... Read More
Not all writers write good grammar. That's a fact. It's... Read More
In my ten years as an advertiser, I've encountered plenty... Read More
For many years, I've been a tutor for students undertaking... Read More
If you are looking for copywriter books, you'll want to... Read More
You have a great idea for a poem, a story,... Read More
May I tell you about a writing technique shared by... Read More
Think of writing like karate...it's about DISCIPLINE.Writing, like other forms... Read More
Our Freelance Writing Needs DefinedWe must make freelance niche types... Read More
Everyone has a unique story to tell. From explaining business... Read More
Ah, the age-old writer's debate--to outline or not to outline?Outlines... Read More
efficient cleaning crew Highland Park ..Have you been guilty of procrastinating on your book project,... Read More
Writing for the web is very different from writing for... Read More
The Big IdeaOkay. So youve figured out that you would... Read More
It is certainly true that we don't get a second... Read More
You can make a lot of money by writing and... Read More
1. Remember publication is a business; writing is an art.... Read More
You sink back into your favourite chair with a new... Read More
When we think of writing it triggers many thoughts and... Read More
Most of us hate housework.Nevertheless, even the most hopeless slobs... Read More
Everyone has a unique story to tell. From explaining business... Read More
In reviewing and browsing web sites over the years, I... Read More
What possibly could I have to write about? I never... Read More
Verb and SubjectIncorrect:"I bet you two had a fine time,"... Read More
There are various forms of structure, including frameworks, work processes... Read More
Ever wondered how the most successful children's book writers get... Read More
Why should you consider creating a memoir of your personal... Read More
Right off the bat, I want to say that there... Read More
Dream that your book can be a number one best... Read More
Anyone who has read any of my articles on the... Read More
We all need a cheer squad.We all need people to... Read More
Welcome to the zany ideas of a productive writer. My... Read More
If you're getting rejections from your submissions, please don't quit... Read More
The freelance writing market is a growing market to be... Read More
How many times have you checked out a job board... Read More
Last week I was having a quick browse on eBay... Read More
Writing |