Lesson #1

PUBLISHERS and how they sell books:

If a publisher wants to get their books into a bookstore or library, they will have to sell their book to a store or a wholesaler at a deep discount. That discount is usually between 40 and 55 percent off of the retail price. It can sometimes be 60 percent or more if the store is part of a chain or a wholesaler that has a central warehouse and has extra costs associated with getting the books to THEIR customers.

The book buyer for the wholesaler or store will contact the publisher, place a purchase order for books, and expect to receive them in five to seven days. They expect to be billed for these books, but will usually require at least ninety days to pay.

If you want to become a publisher, here are a few things you should think about. You have to plan and budget carefully. Small presses usually aren’t paid for three to four months or longer. Plan for not getting paid for 6-7 months.

You will have to pay to ship the books to them.  They rarely will pay a small press for shipping.  If you want to take a stand, I applaud you!  But it will cost you some sales.

Now, are you ready for the big hit? Publishers may not even see the money they think they are owed because the books are bought on a returnable basis. Fully returnable. One hundred percent. (Or as we used to say when we were kids: backsies!) After a publisher has shipped a book to a store, the bookstore has the right to ship it right back for any reason.

So, a book priced at retail is $16.95

A publisher sells it to a wholesaler for $7.63 (55% discount)

The publisher then waits sometimes 6 months for the $7.63 or for the book to be returned.

If the book’s printing and design/editorial costs are in line with what they should be, each book should have cost the publisher approximately $ 3.25 per unit to produce.

The shipping and distribution costs of GETTING a $16.95 book to the wholesaler is usually around $3.50 a book. (this factors in calls to stores and wholesalers, sample copies or flyers sent to buyers, shipping of books, materials, returns… it assumes that you are doing everything yourself.

That leaves the publisher .88 cents a unit in profit.

Where does all the rest of the money go?  Why does a wholesaler take so much?  That leads us to next week’s Lesson #2