The self publishing industry is a reaction to the traditional publishing industry. For years, the only option for authors to see their manuscripts published was to hire an agent and/or submit their manuscripts to the traditional houses in hopes of being selected for publication. In most cases, this process took many years, involved substantial changes to the manuscript and most importantly, forced the author into giving up the rights. Retail pricing and the author’s royalties were out of the author’s control as well. Self-publishing allows authors to maintain control over their material and allows them to select the type of distribution that is appropriate to their material and marketing goals.
Speaking of distribution the desire for shelf space is always a popular subject for new authors, and its requirements are very strict. Books that make it onto the shelves of the brick and mortar chain book stores have to carry a very high trade discount (50% to 55%). “Trade discount” is our industry specific term for “profit margin.” For example, when you purchase a book within a Barnes & Noble bookstore for $14.95, 55% of the retail price ($8.22) is divided between the store and the wholesale distributor for their profit. When you subtract the $8.22 from the $14.95, you are left with $6.73. This remainder covers the cost of the actual book. The balance that is left after the price of the book is the author royalty. Typically, authors receive very low royalties in these scenarios.
In addition to needing a high trade discount, authors also need to provide the bookstore with a “Retail Returns Program.” This program allows the bookstores to return books to the wholesaler and get their money back if the books do not sell. You must provide this program to the retailers, but having it is no guarantee that they will agree to stock your book.
Conversely, authors that elect to focus on internet sales may select a much lower trade discount as the internet book sites do not require as large of a profit margin. So that same $14.95 retail priced book under a 25% trade discount would look like this mathematically: $14.95 – $3.74 (25% of the retail price) = $11.21 – the actual cost of your book = your royalty. Obviously, $11.21 is a larger number than $6.73. Therefore, your royalty will be greater if sold by an online distributor, assuming the cost of your book remains the same in each equation.
Freedom to choose your trade discount and distribution center is just one of the many perks of self publishing. To learn more about trade discounts, check out Cheri’s post titled Trade Discounts 101. It provides a great overview of industry standards and questions to ask yourself before setting your discount.
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ABOUT WENDY STETINA: Wendy Stetina is a sales and marketing professional with over 30 years experience in the printing and publishing industry. Wendy works as the Director of Author Services for Outskirts Press. The Author Services Department is composed of knowledgeable customer service reps and publishing consultants; and together, they all focus on educating authors on the self-publishing process in order to help them publish the book of their dreams. Whether you are a professional looking to take your career to the next level with platform-driven non-fiction, or a novelist seeking fame, fortune, and/or personal fulfillment, Wendy Stetina can put you on the right path. |
Self Publishing Advisor 
There was always vanity publishers. And if one couldn’t find a vanity publisher, one could buy a press and print their book.
That said you wrote an interesting review.