Friday, January 20, 2017

More on book pricing

I have a question about your blog post "Sales figures"

I just learned a little about bookstore/library returns when I switched to a different company to print and distribute all of my books sold outside of Amazon. I don't know how much you know about the indie options out there, but it makes financial sense to go where the money is and stay with the Amazon-run distributor for Amazon sales, but for bookstores and libraries, it's cost-effective to go directly with Company B, who has a direct relationship with bookstores and Baker and Taylor).

When I was setting up my title with Company B, there was the option to include a discount for bookstores and libraries. As the indie publisher, you could choose the percentage, which ranged from 30-55%. This significantly cuts into the royalty payout, but my research has told me that brick-and-mortar bookstores won't order books without some kind of discount. Makes sense.

There was also the option to have the books that are returned from bookstores/libraries sent to you, the publisher, or to have them destroyed (which the thought of destroying books didn't sit well with this bibliophile, not gonna lie).

So, knowing this information, my question is how do traditional publishers handle this? Since publishers deal directly with bookstores and libraries as part of the business, are these discounts and returns already embedded in the traditional publishing model? Am I right to assume that publishers set the price of the book taking this discount into account (and that it therefore won't affect the author's royalties as dramatically)?



Publishers set the suggested retail price of a book based on selling to stores at a discount. Generally indies get 40-50% discount; big box stores and big retailers (B&N, Walmart) get a higher discount.

This can lead to problems of course. If Walmart is selling a book for less than what an indie has to pay for it, indies can't compete.

If Felix Buttonweezer's red hot novel Kale Kreatures of Carkoon (co-authored by our own Donnaeve I heard) has a suggested retail price of $25, the local indie will pay 60% of that to the publisher, and keep the rest. $15 to the publisher, $10 to keep

If Walmart is buying vast loads of Kale Kreatures of Carkoon, and getting a 60% discount (not the 40% that indie stores get) they pay $10 to the publisher and keep $15. Only they don't keep $15, they discount the price dramatically, as in $17.95 (keeping only $7.95) and plan to sell a boatload and make their money on volume.


An indie store can't make any money trying to match the $17.95 Walmart price: it would leave them with $2.95 and they don't have a hope in hell of selling anywhere near the volume to make that a good pricing choice.

There are reasons indie stores have a hard time these days and that's one of the big ones.

And yes, publishers do allow retailers to discard unsold books. It's generally mass market editions. The covers are stripped off and returned to the publisher rather than sending the whole book. The reason is freight cost.

And yes, authors make different royalty rates at the different discount levels. Yes we spend a lot of time looking at royalty statements to make sure the sales are correctly accounted.

Generally libraries pay close to full price but the copies they buy are non-returnable. Libraries are not re-sellers, they are the end user (of sorts) so it makes sense they pay closer to full price.


One of the big benefits of self-publishing is being able to control the price your book sells for, and the flexibility to change it more frequently than never.

51 comments:

Carolynnwith2Ns said...

Unfortunately these issues do not rotate my hamster wheel today, editing typos and mini speed bumps do.

Almost ready Reiders. Exciting day this.

Oh wait, what's going on in DC just popped into my mind. Do I laugh, do I cry? Nope.
I edit.

Sherry Howard said...

So agents do a lot of accounting, too, in the protection of clients. That's not often talked about, but appears to be true.

Sherry Howard said...

I figured today will be a good day to be extremely busy with "other things" so the television will never be turned on today. I think I have some revisions today that are urgent and will surely take all day. Or, maybe I'll deep clean the turnip field.

E.M. Goldsmith said...

Too many numbers for a Friday. I hope I get a super agent than can deal with all this. Ouch, my head hurts. Tearing up unsold books makes me sad.

french sojourn said...


Great post, although to be truthful, I'm still digesting one from a couple days ago.

And I wanted to say "HI, and stay strong." to a fellow Reider that has taken a couple months off to be with her Mom. Her mom is 93 and in the throes of a degenerative condition. Pretty incredible daughter, and fellow reider. I am being nebulous out of respect for her privacy, but I thought she would get a little pick me up with a couple shout outs from her fellow reefers. This community is a blessing to so many of us.

Cheers Hank.

Colin Smith said...

So, Felix got around to writing that sequel to BEAN BEASTIES OF BOQISTA (an exile colony on PHARTT, one of Carkoon's moons)? Evidently it took Donna's scriberly talents to finally get KALE KREATURES in print. Congrats to them both! :)

It's sad that indie booksellers end up charging more for books than the big retailers, but that's the economics of the situation. I'm not sure there's much anyone can do about it, other than buy from indie stores as much as possible. Unfortunately for me, that's not often, thanks to the economics of my situation.

Like Elise, all this math is one reason I want an agent. Math was never my strong suit, so an agent who enjoys messing with spreadsheets and figuring this stuff out would be ideal for me. :)

Ashes said...

As a library employee I often wonder if books checked out through us are making the author much money.

I know the hope is that someone will check out a book and love it so much that they'll recommend it to friends, maybe buy their own copy and other books by the author, maybe buy copies for gifts.

And that's certianly true of great books. But there are a ton of good books that they won't recommend/buy and if they do mention it to a friend it's more 'you should check-out this book when I'm done, it's pretty good' than 'you need to buy this book right now!'

You know who really drives booksales from the library? The librarian. She knows her patrons taste in books better than their friends or family. She rarely misses hitting on the perfect recommendation for people who's taste align with her own. If she loves a book she'll purchase it for the library or she'll request that the regional board purchase it. She will recommend it all day long, but the waitlist will be full so patrons who trust her recommendation will run out and buy it.

In a rural location like mine, the local librarian doesn't attend book conferences or conventions. She dosen't get free books, although she'd love them. And she is the one person in a rural community, in a library that services thousands, who's opinion and knowledge will drive the most sales.

Ironically, the book purchasers at the regional board work in an office setting. They hold the library science degrees, and do not interact with patrons. Many have never interacted with patrons over their entire career. Yet they're the ones more likely to attend book conferences and conventions.

Kate Higgins said...

Colin: Do you balance your checkbook by going to the ATM and withdrawing $20 just so you can see the balance like I do? I need a 'balanced' agent too.
Sherry: I am deep cleaning my studio which often resembles a turnip patch...

Amy Schaefer said...

Oh, Colin, but this is fun, practical math. Just the sort of thing I'd seize on and make my kids calculate while we were living on the boat and I wanted to ditch the textbook for a day.

And to wander further off topic, I tried kale for the first time yesterday. It wasn't nearly as bad as I'd been led to believe from you Reiders. But I suppose that isn't much as a tagline: "Kale - not nearly as bad as you think!"

Good mojo to everyone on this interesting Friday.

Colin Smith said...

Kate: Actually, my wife manages the bank account. I set the family budget (which is about as much money-math as my brain can handle), and wonderful wifey, who loves math, balances the checkbook and figures out the best ways to spend the money. :)

Colin Smith said...

Amy: I spent three or four hours pouring over the budget the other night... grumble grumble grumble... I will grant that this kind of "practical math" is the most valuable to teach. But that doesn't mean it's any more enjoyable... :-\

Amy Schaefer said...

Math is fun. Like many subjects, I think it's all in the way you were taught. There are lots of ways to tackle a problem - you just have to find the method that works for you. Just like writing.

And if getting a thrill out of sharing the beauty of algebra with my girls is wrong, then I don't want to be right.

kathy joyce said...

Besides the accounting, I'd need an agent for the negotiating. What a lot to know and understand!

Susan said...

OP here! This is so much more information than I ever expected, so to say I'm grateful is an understatement! Thanks, Janet!

This makes me happy to know that as an indie author, I'm doing everything right within the confines of what I'm able to do as an independent publisher. I have my books in a number of indie stores (including, hilariously, a friend's sporting goods store--because who doesn't want to read about Lyme Disease when they're going camping!) and offered them a 40% discount, which seemed fair at the time. I'm glad to see that's the standard.

It's also interesting about libraries. I have it set up so that if libraries want to order my book through B&T, they'll also get the discount, but I might rethink that/restrict the discount. I did a talk with a group at someone's home and one of the attendees was a school librarian. I recently found out that she ordered copies of my books for the district online--she mentioned having to order online rather than buy the copies I was selling at the home. I wonder if this is why libraries have to go through those channels.

Discarding of unsold books makes me sad. If I'm ever in that position, I'd rather they go to a literacy program or school. I wonder--can this be arranged or do the books have to be discarded (in my mind, discarded means basically incinerated, but I may be wrong).

So much useful information here. Thanks so much!

Susan said...

Ashes: There's a bestselling author in my town (who coincidentally lives a few doors down from me) who has most of their books in the local library. When I went to check-out their new release, I was told that the library would have to think about purchasing a copy. I was floored--not only did they already have the author's other books, but this author is local. I would have thought ordering this book was a given, considering. The author and I ended up exchanging copies of our books after we chatted, but I got a call a few days later saying the book had been purchased and I could pick it up at the library when ready. The author seemed happy, and now fans in the area can read it. I don't know what goes into the decision making, but if you can keep requesting books so they gets into circulation, it seems to make a difference--especially if the librarian goes to bat for it.

Colin Smith said...

Discarding books. I'm surprised Stephen King hasn't tackled that one--it gives me the chills, to be sure. I'm with Opie Susan--if you have to "get rid" of the books, give them away to a worthy cause. Burning them, though? Eeek! I can almost hear the words screaming from the page as flame consumes paper...

Amy Johnson said...

A shout out to the fellow Reider french sojourn mentioned. You sound incredible to me, too.

Janet and Ashes, Thanks for teaching me some new stuff today.

Donnaeve said...

T e Trials and Tribulations of Commenting From Carkoon:

1. Type out long comment, filled with umor and wittiness only to it publish and receive t is:

Bad Request
Error 400

arrrrumph.

2. Working wit Felix Buttonweezer is about as c allenging as working with anyone w o is filled with illusions of grandeur. There's only this one desktop - it's a uge old clunky t ing, and t e key doesn't work. (can you tell w ic one?)

3. Felix stinks so I don't like to get too close to im and e ogs t e computer.

4. My comment mig t not make it - if it does, OT: Craig, saw your comment about website. Transition woes. Maybe it'll resolve today!

Donnaeve said...

T oughts to Reider French Sojourn mentioned.

AAGreene said...

As an accountant, I love this stuff. But like "Hollywood accounting" confounds many, the basis for the book math and all the discounts is just fascinating to me. On one hand, it makes sense. On the other hand, it doesn't. And with the growth of Indie publishing, the options are endless. I love learning from everyone here. Endless possibilities, and as always - hope.

And today of all days, we could use some. Happy Friday!

Colin Smith said...

Donna: I heard a story that Felix actually removed that key after a short vacation in London's East End. He became so enamored of the accent, he wanted to type in it. I don't know whether there's any truth to this. The last time I asked him, the response I got was: "Wot ve ell you on about? Of course vere's no trufe in it! I just lost a piece of me keyboard." Let the reader judge... :)

elisabethcrisp.com said...

...deep clean the turnip field.

May I borrow that? Perfect expression.

Claire Bobrow said...

Math, gah.

But still, this post was interesting. Enlightening to learn about the discount system, and - horrors - the discarding of books!

Ashes: your comment gave me a little window into the life of a librarian, so thank you for that. Wish I could send you off to a convention or two.

Another shout out to french sojourn's Reider friend - you are in my thoughts.

Signing off now to go help Sherry deep-clean her turnip field.

Robert Ceres said...

I really didn’t think for the world that I would have anything to say about this post, but…

About librarians, I agree with Ashes. They do drive sales, especially for obscure but really excellent books. People see other big readers (who would otherwise go bankrupt buying books), and ask, “what-cha reading.” The big readers brag on the book. The librarians get the feedback, “great book,” so they recommend it more, so it’s less available, on hold, so frustrated patrons head to the local indie book store, or even Barnes and Noble. They hold a book group, opps, there’s eight sales. They buy the book as presents, dot, dot, dot. The librarians review the book for ALA, which drives sales and causes the NYT book reviewer to review it. Then kaboom, it’s on the NYT best seller list.

So I see librarians as a potential big factor in driving book sales. Plus they are usually really pleasant, intelligent people who are fun to be around. I often ask them for recommendations.

I remember reading somewhere, I don’t remember where, that librarians persistently recommending his books was a factor in keeping John Green in circulation until The Fault In Our Stars burst upon the scene.

Ashes said...

Susan: Our library does carry books from local authors. However, and I've mentioned this here before, we have a relationship with those authors. They come in for readings and events (which are a win, win), and some are regular patrons. We buy their books locally.

The two ways our library receives books are locally and from the regional board. When a book is added locally it's either donated by a patron or purchased by our librarian. We make local purchases very rarely, as that money comes out of our shoelace budget for petty cash which also has to fund the children's programs.

Books sent by the board are always shelved, donations are sometimes shelved, at the librarian's discretion (she is more likely to shelve it if you mention you loved it).

Requesting books does help in getting the regional library board to purchase them. Our library (and most libraries) have a system for interlibrary loans (ILLs). If you request Kale Kreatures of Carkoon, and we don't have it on the shelves, we'll request it from another library and have it for you within the week. Unfortunately that book will spend zero time on our own shelf, when you return it to us we'll send it right back. But if enough people request it, the board will decide it's cheaper to buy us a copy than to continue sending the same book back and forth to us.

Also if patrons are nuts for Felix Buttonweezer the regional library will notice that and send us his future books.

Claire AB. said...

Thank you, Janet, for this amazing information, which I hope will come in handy one day. It's nice to have something happy to dream about on this particular January 20th.

And all good wishes to the brave Reider out there taking care of her aging parent. My thoughts are with you and your mom.

Joseph Snoe said...

Good entry today.

I’d like one clarification. Janet Reid wrote “And yes, authors make different royalty rates at the different discount levels.”

Do you mean literally different rates or the same rate applied to the actual (discounted) sales price to the retailer? If different royalty rates, are the varying rates applied to the suggested retail price or to the actual discounted price to the retailer?

Thanks.

Lisa Bodenheim said...

A friend works at a bookstore. They do tear covers off unsold books that have sat too long on the shelves but the books are not put to flames. Employees read them, and in the process discover new authors (future purchaser of author's next book) and recommend them to customers (more future purchasers of author's next book).

Hank Good wishes to the Reider caring for her parent. My sister and I just spent this week at the hospital with our parents. Happily, Dad is back home--bright-eyed and bushy-tailed, keeping Mom busy with his newfound energy. He's in the last stage of his disease process (we don't want to know length of time), so we treasure each day.



kathy joyce said...

Kudos to librarians, and also to book store staff. One of my favorite books, An Instance of the Fingerpost, by Iain Pears, came to me via a handwritten "staff picks" note posted at a bookstore. I loved it (the book, not the note), then read everything else the author wrote, and recommended him a hundred times. That little note basically started me reading historical fiction, and I've spent a lot of money on that. My first stop at the library is always the "librarians' pick" shelf. Special good wishes to everyone who works with books.They'll save humanity!

BJ Muntain said...

Yet another reason to get an agent - accounting. Yes, I knew agents do this. I know I don't want to do it. If I'd wanted to work with numbers, I would have become a mathematician or an accountant. Or a scientist. Unfortunately, I burnt out the math portion of my brain when I took 4 university math classes at once. I suggest, unless you are extremely gifted that way, don't do that.

As for the destruction of the books: Yes. I was told this many years ago when I would buy books and magazines at a tiny convenience store in my small town. The store would tear the covers off... then illegally sell the books for a much discounted price, after they got their money back for them. (This was over 35 years ago. I don't think they're still in business, or at least, the owners then are not the owners now.) They were *supposed* to be destroying them. That's why you see in many books these days, "If this book is being sold without a cover..."

To the Reider Hank mentions: (((hugs)))

Ashes: There are a lot of libraries out there. While selling to lots of libraries won't make you a bestseller, it's still pretty good sales (especially since, as Janet points out, they don't get that much of a discount.) In Canada, there's a fund for authors to get paid according to how much their book is borrowed from libraries, which also helps a lot.

Craig F said...

So we can blame Sam Walton's Wally mart gang for more than trashing rural America, which led to that thing in D.C. today.

He is also causing the demise of the indie bookseller. There is only one left in the city I live in. We had six not that long ago.

Karen McCoy said...

Ashes: I was one of those regional librarian purchasers you mentioned, but I was lucky in that I had years of public service in addition to that experience. I can say that the public experience definitely helped, because I always tried to keep users in mind. But I also know that not everyone does.

There's an example that demonstrates this (though I don't know if it's true). A congressman tried to lick a stamp because it had been so long since he'd actually mailed anything himself, that he didn't know stamps were self-adhesive.

As far as discounts go, it depends on what vendor we buy from. For example, Ingram sells to both booksellers and libraries, and the discounts would vary depending on the book. Baker & Taylor usually had an average of a 40% discount (and this is the usual standard for Ingram too--Ingram just had more variables).

Susan said...

Ashes: It sounds like you have a great library--due, I'm sure, to its excellent librarians ;) Fortunately, we have a number of libraries in my county. Unfortunately, the one just a few blocks away isn't the best. They don't seem to outreach with any authors for readings and events--even my Big Name Author neighbor, whom they know is in town (this is part of the discussion I had with my neighbor, who would be happy to participate if asked). I have a friend on the library board this year who says that the problems are stemming from there and trickling down. The library isn't failing financially, per se, but there are so few programs that they're not bringing readers in. It's a shame, really. Libraries are magical places. Thanks for doing what you do for yours.

Theresa said...

There are librarians who specialize in making recommendations to readers. I always figured some librarians did this anyway, but after my book was published, I was contacted by a librarian with just this specialty. She did a Q&A with me for her newsletter. And an old friend of mine, a librarian, always tried to attend BEA (I think that's the right acronym--Book Expo something)every year so she could find out about all the big books.

OT, today I reaped a reward from modest book promotion. A local woman came across one of my book marks. She's in a 25-member book club and since it was her turn to choose the next reading, it will be my book. And I was invited to the book club for a Q&A.

Thanks for the math diversion today, Janet.

Donna, I hope all is well in your neck of the, um, woods.

Susan said...

I should also point out that I offered to donate my books to them. They (rudely) said they didn't want them. One of the other libraries in the county was thrilled and placed them on the local authors shelf, so thankfully they're now in circulation in the county. I chose to have an event there for my first book release. Community makes a difference.

Susan said...

I'm posting way over the limit here, but once you get me taking, I don't shut up :)

Theresa: First, thanks for the shout-out yesterday about nostalgia fiction. Second, that's awesome about the book club! In-person talks and events like that light me up, and it's so much fun to hear what people think of your work. Congrats on the promotion working for you--that's huge! Have fun :)

roadkills-r-us said...

Janet,
As always, thanks for the insights. I know some, but not all of that, and wasn't sure what the discounts looked like.

I have taken my books to three libraries now.
One gets them onto the local author shelf within a week or two. If it's checked out enough it will move to a standard shelf and they may buy more. Otherwise it's sold.
One gets most onto the local author shelves- probably. (Mine are in process, and will be.) They don't say what the rules are on their website, and the librarians I was talking to didn't know.
One couldn't tell me anything except that someone would make a decision and they would be shelved, sold, or given as book club prizes. They weren't even sure they could accept bookmarks. The other two happily took the bookmarks.
I need to get them into more libraries. But some make it difficult.
I have also gotten some into a school library (I know the librarian) and my day job's library (ditto). I need to get into more schools as well.

Karen McCoy said...

Susan: If it helps, I wrote an article about author promotion in libraries recently: The Write Life: Why Getting to Know Your Library is Crucial for Book Promotion I hope it's useful!

Susan said...

Karen: That article was fantastic! It cleared up a lot about the library programs and even gave me some ideas to bring to my friend on the board for community outreach (I love the idea of a lock-in for teens and would love to volunteer my time to teach a youth writing class). My friend has been trying to get me to join a committee, though I've been reluctant due to the time commitment. I might have to re-think. Thanks for sharing this, and great job with the article.

AJ Blythe said...

Hmm, I'm starting to get the idea that in my absence Donnaeve has been banished to Carkoon. I hear they are still on dial-up so I'll look for confirmation in a few months time.

Hank's Reider friend - it's a tough thing you are doing. Stay strong.

Back (almost) on topic, our central library has a bookshelf specifically for local authors. We have a lot of local authors, with quite a few big names (I'm hoping it's something in the water!), so the shelf is quite large. An author friend of mine is reading her way through them all and has been at it for a number of years.

LynnRodz said...

Thank you, Hank, Janet and all your Reiders for your kind support for me and my mum. Every day I tell myself I need to stop by here, but every night I go to bed with other thoughts on my mind. There are good days and bad days, moments of joy and moments of sadness, of laughter and of tears.

Mum is better than I had feared before getting here. Physically she is healthy; mentally it's up and down. There are times when she's her old self and then there are times when she's confused. The worst is when she's aware of what's happening to her, when she prays and asks God to not take her memory away, to please give her her mind back. Those are the times when it's the hardest, when I feel so helpless because I can try and make life easier for her, but I can't give her what she wants.

Anyway, thank you everyone for your prayers and support which means a lot more than you know. I'll try to stop by from time to time. Thank you, Janet, for creating this incredible community.

Colin Smith said...

LynnRodz: I did notice you hadn't been around much recently. Now I understand why. I wish only the best for your Mum, and for you too as you care for her. :)

Panda in Chief said...

I love our local library and librarians. Because my book purchasing $'s are limited, I do a lot of reading from the library, but when I find a book I love, I usually try to gather the $ to buy it for my own. I also have a small house, so space is an issue too. Maybe if I didn't have so many unsold paintings sitting around, I would have room and $ for more books and shelves.

We have a wonderful library system, and our fabulous independent book store stocks both best sellers and all books by local authors be they big name folks or us locals. I turn what she buys from me into store credit so I can buy more books.

I am staying away from all news sources today, to preserve my sanity as much as possible.
Thanks for coming by and visiting the pandas, Claire! Fun to see a recognized name here and there. I hear watching panda videos is very relaxing.

Panda in Chief said...

Oh, and one more comment about our fabulous, supportive library: when I was telling one of my favorite librarians about my graphic novel (which has not been sold yet, but it is out there making the rounds) she said, "when it's published, we want to have your book launch here."
Huzzah!

also: "Kale: it's not as bad as I thought."
Snort.

Karen McCoy said...

Thank you, Susan! So glad it offered some tangible ways forward. And, in case you didn't see it linked from the other article, I also wrote about book purchasing from the library side: The Write Life: What New Authors Need to Know About Library Systems

kdjames.com said...

I got to the end of the first paragraph and then the lyric "the boogie woogie bugle boy from Company B" started playing in my head. Thanks, Susan.

I love math and statistics. And I know that the more variables there are in an equation -- the more moving parts, if you will -- the more they'll will squirm around until they mean what someone wants them to mean.


Lynn, I've been thinking about you and your family, and feeling much empathy. Sending virtual hugs and strength your way.

Beth said...

Lynn, you're a good person. Prayers for you and your mom.

AJ Blythe said...

Panda in Chief, I've had a similar thing happen to me. My local bookstore has invited me to have my launch at their store when I get published, but the best thing is they said they would create a cozy category in their store when I do!! (FYI, in Oz it's a genre hardly anyone knows and there are hardly any cozy books in stores here, let alone a section for them)

BJ Muntain said...

Roadkills: The best way to get your books into libraries is to have people request them. If a library gets enough requests, they'll often buy the book. If it's checked out enough, they'll buy more. Get all your fans to request the books at their library branch and to get people to borrow them.

Lynn: I'm so sorry you and your mum are going through this. You can use this time to prepare for when the disease worsens. I wish I could give you articles and books to read - I've read a few articles on the topic, but they didn't help my situation, where my dad denied it right to the end. But it's possible to use this time to prepare. Maybe that way, your mother won't be so anxious about it. Most of all, love her and love yourself. Take care of your health, too, so you can better deal with her health. And, again, (((hugs)))

Susan said...

Kd: Glad to be of service! ;)

Lynn: My heart is with you and your family.

All: I'm so glad to hear that your libraries and indie stores have local author shelves! I truly believe there's value in community, and even something as small as adding a few books to a shelf adds to that (not to mention helping with readership!). Very cool.

LynnRodz said...

Again, thanks everyone. Hugs to you all.