We recently discussed the importance of book pricing in self-publishing. Let’s now take a closer look at trade discount. What is it and what should you know about it?
Trade discount is the percentage of your retail price that you offer to the publishing trade for distributing your book to retailers. The “publishing trade” consists of wholesalers, distributors, and retailers. Instead, everyone involved with your book after the publisher all the way to the reader falls into the “publishing trade” circle, and they all take a piece of the trade discount.
Obviously, the larger the trade discount, the more money there is to split up among the parties involved. Standard trade discounts have ranged from 50% – 70%.
Most publishing companies do not offer any information about their trade discounting policies up-front, nor do they give the author any say in the matter. Ask your publisher. And make sure you to keep 100% of your profits.
Depending on your distribution goals, look for the flexibility to establish a trade discount from 0% – 55%. A 55% trade discount will generally result in an industry standard 40% retail margin, which is what a typical book retailer seeks when considering whether or not to order a book. So in addition to availability on Amazon.com, Barnes & Noble’s, and Borders websites, among other online sales channels, your book can be published at the retail margin that bookstores and chains are looking for.
Have fun and keep writing!