One of the many benefits of self-publishing is the ability to determine your own retail price. When considering how to price your book, consider your distribution needs and income goals. Here is what you need to know when determining your book price.
The retail margin is the difference between your book’s selling price at a retail store and the price that store paid to acquire the book (either from you, the publisher, or the wholesaler). For example, a book with a selling price of $10 that the store purchased from Ingram for $6, has a retail margin of 40%, which is the most common industry standard.
The trade discount 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. Because distributors typically take 10%-25%, they typically expect between 50% – 70% in order to provide an acceptable margin to the retailer.
Retail price is often the same as cover price or selling price, but it doesn’t have to be. Most publishers do not allow you to set your pricing, but some do, like Outskirts Press. If you or the publisher set a price, you are setting the suggested retail price. The retailer can take it as a suggestion. They may, however, sell your book for whatever price they want, which is the list price, or selling price. If the list price is lower than the suggested retail price, the retailer is usually absorbing the difference in their portion of the margin.
Physical offline retailers typically expect a margin of at least 40%. This gives them the flexibility of offering the book for sale (selling it below the suggested retail price) and still making money on the book. A retailer’s margin is determined by the price they sell the book compared with the price they paid for the book (usually by buying it from a wholesaler like Ingram).
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.
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. Usuaully, 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. For some authors, mainly those planning on selling online, this is often an acceptable plan. For other authors, mainly those planning on selling offline, lowering their trade discount may end up crippling the book’s chances for success.
|ABOUT JODEE THAYER: With over 20 years of experience in sales and management, Jodee Thayer works as the Manager of Author Services for Outskirts Press. The Author Services Department is composed of knowledgeable customer service reps and publishing consultants; 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, Jodee Thayer can put you on the right path.|