The minimum price for a print book is the manufacturing cost. If you wish to distribute your book through online retail sites, there is also a distribution fee. Then you add the amount of revenue you wish to earn from each book purchased.
Books Eligible for Retail Distribution
Not all book sizes and binding types are eligible for distribution through retail channels. If you choose the option to sell your book through major online book retailers in the publishing tool, only those formats that qualify for retail distribution AND match the page size in your PDF are available for selection.
Retail Pricing: Getting Started
In any business, the ultimate reason for an effective pricing system is to earn revenue from your work. Since the amount of revenue earned depends on manufacturing costs, selling price, and the number of books sold, you should consider the following when pricing your work:
- What are the manufacturing costs for my book?
- How much profit do I want to make?
- What are my fans willing to pay?
- What is my competition charging for a similar product?
Profit vs. Revenue
Before we start setting a price for your printed book, there are a few terms you should be familiar with if your intention is to earn income from sales of your book. Profit is the net income for your business after other expenses have been accounted for, including payment to authors, pre-production, labor, marketing, and overhead costs such as utilities and rent. Revenue is a general term for any money paid to you for book sales.
Determine a Product Price
You may have created the best book ever on your chosen topic, but if the wrong price is set, your sales and/or revenue will suffer. Therefore, you must first know your book’s manufacturing cost so that a break-even point can be established. Keep in mind that publishing manufacturing costs include both materials and labor. If you find that your selling price is noticeably higher than that of authors offering comparable works, you may want to look for ways to reduce your manufacturing costs or expected revenue per book in exchange for potentially selling more units.
“Wholesale Price” refers to the minimum price at which you are willing to sell your book to retailers, who will in turn sell it to their customers for a profit.
Wholesale Price per Book = Manufacturing Cost + Revenue + Retailer’s Commission
Example: $5.50 + $4.00 + $1.00 = $10.50 per book
Since manufacturing costs are somewhat out of the author’s control, this pricing example relies on your decisions about the revenue you wish to make from each retail purchase of your book. An author should also consider that while you may be earning a smaller royalty per book when offering it at a wholesale price, you could eventually earn more income from higher book sales through retail channels.
Retail (or List) Price
The generally accepted retail pricing formula is: Wholesale Price x 2
Example: $10.50 x 2 = $21.00
When you decide to offer your work to retailers at wholesale prices, it is with the understanding that the retailer expects to sell your work at a price sufficient to cover their costs and still make a profit – even if the retailer chooses to offer your work at a discount.
Suggested Retail Price and Your Revenue
The wholesale price you set for your book is the price retailers pay to purchase your book for resale from their sites, stores, or shops. The suggested retail price includes a price markup sufficient to cover the retailer’s labor, marketing, rent, utilities, and other fixed costs associated with owning and running a business. The retailer may choose to sell your work at the full retail price ($21.00 from our example above), they may offer a standard discount like free shipping, or they may run a special for a defined period of time such as 25% off all print books. The selling price set by the retailer has no effect on the revenue you earn from selling your book at the wholesale price – in other words, if your Retail Revenue is set at $4, you will make $4 for every book sold in retail channels, even if the retailer offers a discount.
Since no single pricing formula works for all projects and no formula assures maximum creator revenue, every author must approach retail pricing individually.
It is probably easier to set a preferred retail price and let us calculate your maximum revenue based on your book’s specifications (page count, paper quality, binding, etc.). Using the $21.00 retail price from the above example and assuming a 100% markup, the calculator automatically sets a wholesale price of $10.50.
The wholesale price minus production costs determines what is left over for your revenue and the commission.