The 5Ws of Trade Discounts

To get the best understanding of your book’s price, you have to first understand that there are many individual entities that make up the pricing equation. One of those entities is the trade discount. That term can confuse authors at time, though the concept is not as difficult as it may initially seem. To give you a snapshot view of what trade discounting is, I’ve prepared a list of the 5Ws (Who, What, When, Where, Why) of Trade Discounts:

  • Who sets the trade discount? Sometimes the publisher sets the trade discount. At Outskirts Press, we allow authors to set their own discount.
  • What is the trade discount? The trade discount is the discount you extend to a retailer that is carrying your book. The discount you offer can range from 0% (no distribution) to 100% (highly unlikely).
  • When do I select my trade discount, and can I change it later? You select your trade discount before your book publishes, and while you can change your discount at any time, we don’t recommend it. Some retailers may not recognize the change for a while, and most likely you will incur additional costs for revising your book. It’s important to research trade discounts beforehand in order to make sure you are making the best decision for you and your book.
  • Where will your book be available when choosing certain trade discounts? The minimum trade discount is 20% for online-only distribution. If you want to penetrate most retail stores, you will want to offer a discount of 40-55% (your book must also be fully-returnable). If you’re targeting wholesale clubs (Sam’s Club, Costco, etc.), you will want to offer a discount between 60-75%.
  • Why do I have to offer a discount at all? Your discount determines the price retailers pay for your book (wholesale price). They then sell the book for more (in most cases) and keep the profit. If the retailer can’t make any profit, what’s the benefit of carrying your book? Keep in mind, though, the higher the trade discount, the lower your royalties. In order to make the transaction go smoothly for both parties, you must choose a happy medium from both perspectives (the retailer and you).

What trade discount have you set for your book? Has it allowed you to penetrate your target market?

Cheri Breeding ABOUT CHERI BREEDING:
Since 2005 Cheri Breeding has been working as the Director of Production for Outskirts Press. In that time, she has been an instrumental component of every aspect of the Production Department, performing the roles of an Author Representative, Book Designer, Customer Service Representative, Title Production Supervisor, Production Manager and, Director of Production. She brings all that experience and knowledge, along with an unparalleled customer-service focus, to help self-publishing authors reach high-quality book publication more efficiently, professionally, and affordably.

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