When you’re an indie publisher, you control much of the process of publishing your book. Last week, the Gettysburg Writers Brigade talked about how to price your book to maximize your sales and profit. Author Gail Furford spoke about her process.
What’s in the price?
The first thing to understand is what goes into the retail price. Here are some ballpark averages (which is why the numbers don’t add up to 100%.
- Retailers – 40% (big box stores and wholesalers get an even bigger break).
- Publisher – 20%
- Production costs – 15%
- Promotion – 10%
- Author – 8.5%
- Agent – 1.5%
You can see there’s a lot of fingers in the pie, and you as the author (and the creator of the work) get one of the least amounts. Even indie publishers still have to consider the retailer cut, production costs (which tend to be higher), and promotion costs.
What do similar books cost?
The next thing to look at is what similar books cost. If you price your book too high, you will negatively impact your sales. If you price it too low, you will sell plenty of books, but you will lose money.
Price method #1
The first way to price a book is to work backward. Start with the retail price your book will sell at. Subtract a 55% wholesale discount and the production costs (including shipping). What you are left with is the amount you will make and the portion you will use for promotion.
Here’s an example:
- $25.00 Retail price
- – $13.75 Wholesaler discount
- – $ 4.25 Publication cost
- – $ 2.50 Promotion
- $ 4.50 Profit
Now because you are the publisher, you can adjust the price as need be. For instance, I know an author who automatically deducted the wholesale cost from the price she sells her books for at festivals. So she would sell her $25 for $15.
I have found from my own experience that I can offer better deals at festivals. So I sell my books as “Buy 2, Get 1 Free.” Not only does free attract customers but this offer helps maximize sales, and I give a 33% discount and still make more money per book. My mainstream author friends aren’t able to offer that type of discount, and especially not offer it and make more money.
Price method #2
Price method #1 was Gail’s method. I learned pricing differently and simpler (which I’m all for) when I became an indie author. Multiply your production costs by 5 and 8. That is your retail price range. Choose a price that fits in the retail market price for similar books.
I like this method because it is also simple to adjust. If my retail price doesn’t fall within the market range, then I need to find a way to reduce my production costs. This usually means I cut some pages from the layout or chose a larger format layout that requires fewer pages. Either way reduces my production cost and hence, my retail cost.
In this method, I consider production cost not only what it costs to produce the book but what it costs to ship it to me. Some authors just consider what it costs to print the book. You can use either one. My way just makes it harder for me to get my retail price to match up with the market prices.
Also, things like graphic design and editing that I often pay someone to do, I expense as contract labor because it would be difficult to break those cost down to a per unit cost unless I estimate how many copies I will ultimately sell of the book.
Do you have a different way to price your book? If so, let me know. I’ll share it with the group. Next week, I’ll write about pricing e-books.