The one thing that most authors worry about is the price of their book. Most of them would like to have the price as low as possible “so people will buy it”. What is really important to know is ‘where the money goes’ when a book is sold so that you know if your book is being sold at a profit – or at a loss. Every author needs to know these numbers!
The most profitable books that an author can sell are those that are purchased from the author’s own channel. This can mean the author’s website, their social media, at their events, or from their own marketing efforts. With these books, the money is collected by the author directly rather than through a third-party retailer – like Amazon, who will take a proportion of that income.
Book sold through the book trade requires the author to give a 60% discount. This means that the author receives back only 40% of the retail price. Out of that 40% comes the cost of printing. What is left is shared equally between the author and the publisher. Typically, each receive 10% of the retail price.
So where does the 60% go to? A bookshop receives a retail margin of 45%. The distributor, who supplies the bookshop, receives 15%. The two together makes up the 60%.
If the cost of printing is more than 40% of the retail price, then the book will be selling at a loss and the author and the publisher will not get paid. So how can you fix this? Because the wholesale price is a percentage of the retail price, then it is the retail price that needs to be increased for the sums to work.
But will people not buy the book if it is too expensive?
If a book represents good value for money and contains what the reader is looking for, the difference of a pound or two, either way, is unlikely to put them off a purchase. They will also have the option of buying it as a cheaper eBook. However, nobody will actually be buying the book at the full retail price. Why? Because each retailer will price the book to sell at what they consider to be the right for the marketplace. They have a margin of 45% to play with which they will use to sell the book at a discount. If the retailer doesn’t think the book will sell, they will reduce the price themselves. Setting the price of a book is what your publisher is expert in. Have this discussion with them, and agree what is right for your book to ensure your are selling at a profit and not a loss

A help sheet from Filament Publishing Ltd, Consultant Publishers Members of the Independent Publishers Association Telephone +44 (0)20 8688 2598 chris@filamentpublishing.com