What is a Trade Discount?

When self-publishing, it is important to understand industry terminology. “Trade discount” is one of the terms you need to understand because it impacts your book’s price and distribution. Here is what you need to know.

What is a trade discount?

A “trade discount” is also known as a distributor discount. It is the percentage off your retail price that you offer to the publishing trade for distributing your book. The “publishing trade” consists of wholesalers, distributors, and retailers. Everyone who handles your book takes a piece of the trade discount.

The larger the trade discount, the more money there is to split up among the parties involved. Standard trade discounts range from 50% – 70% although you can choose to go lower for online only distribution.

Who determines my trade discount?

This depends on your publisher. Some publishing companies don’t disclose their trade discounting policies upfront and don’t give the author any say in the matter. However, some cutting-edge publishers, such as Outskirts Press, offer their authors the flexibility of setting their own trade discount. Flexibility varies by publisher.

The ability to choose your trade discount can be beneficial because you can choose your trade discount based on your distribution goals — online, offline, or both.

How does trade discount affect price?

Publishing companies who allow you to set your trade discount also give you the flexibility to choose the price of your book.

When thinking about pricing, it is important to remember that a trade discount is different from a retail margin. Wholesalers receive the trade discounted price. Then they turn around and distribute your book to a retailer for a retail margin they set. If the trade discount and retail margin were the same, the seller wouldn’t make any money and would go out of business. For this reason, the retail margin passed to the retailers is always lower than the trade discount you set.

To learn more about trade discounts and book pricing, contact your self-publishing company.

ABOUT JODEE THAYER: With over 25 years of experience in sales and management, Jodee Thayer works as the Director 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.

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