Indie Publishers: You're Doing Print Wrong

I've mentioned several times on this blog how - even though I sell way more ebooks - I continue to pursue the print market as well. Some authors eschew print altogether, often citing various reasons for doing so: they can't sell enough to make it worthwhile, they don't want to learn how to format for print, and so on.  Not me. All I've ever seen are on-going reasons to make sure I produce print versions of all my work. Basically, it costs practically nothing, it's another revenue stream, and it allows me to reach additional readers. Plus, I'm still conscious of the fact that there may be readers who simply can't afford an ereader of any type. (In which case, they can always request that their local library order print copies of my books.)

Bearing all that in mind, and having been at this indie publishing thing for over three years now, I thought I had a pretty good grasp of how print worked. In essence, my approach was to make sure I priced the books high enough to make a small profit, but low enough to encourage sales.  That sounds like the formula for a winning strategy, right? I thought so, but even though I was making sales, I was wrong in that regard. Wrong, Wrong, Wrong!!! 

However, it wasn't until very recently that I discovered just how poorly I - and probably a lot of indies - understood how the print market really works.  I came across a passage written by Julie Ann Dawson of Bards and Sages Publishing, and it was eye-opening. It made me reevaluate my entire approach to putting my work in print.

Now, with Julie's kind permission (and because I found it to be extremely valuable), I am reposting the passage she wrote on the subject:

--------------------------------------------------------------------------------------------------------

We actually sell more print with many of our titles than we do ebooks. The print market is a completely different creature than ebooks.

First, print is still sold on the wholesale model. Manufacturers set a retail price, and vendors pay a percentage of the retail. Retailers then can sell the book for any price they want. Indies lose site of this because all of the POD services call their money "royalties." More accurately, POD is more of a consignment deal that a royalty deal. But that is just a matter of semantics. The point is, Unlike ebooks, you don't set the "selling" price. Retailers do.

(***KH: I added the emphasis to the last sentence in each of the above paragraphs because I think they are very important points to remember.)

What indies tend to do is set the retail price of their books to match the Amazon SELLING price of books in their genre. Don't...do...this. Look at the retail prices of the books instead. THAT should be your baseline. You want to set your retail price to match the normal retail pricing for your genre. For example, typical trade paperbacks have a retail price of between $12.99-$16.99, depending on how long they are.

Second, don't bother trying to mimic smaller formats with POD. The mass market paperback size is not cost effective in POD. To understand why, you need to understand the role that size played in print traditionally. Go LOOK at an actual mass market size book compared to a trade paperback or a hardcover. You'll notice two things. One: the covers tend to be index stock, not heavy card stock. Two: the paper tends to be thinning and more like newsprint. Until the rise of ebooks, mass market paperbacks filled the role of ebooks in the marketplace as the "low cost" alternative.

POD services use the same materials for mass market sizes as they do trade sizes, which means you are simply increasing your manufacturing cost for no real benefit. Stick with the trade paperback formats.

Third, on the matter of price and sales. If you price your book correctly, retailers will place it on sale for you. And unlike digital, when a retailer puts a print book on sale, that comes out of their profits, not yours.

(***KH: Emphasis above added by yours truly.  The next few paragraphs are also critical to understanding how the print market works, but it seemed easier to note that here than highlight so much text.)

Retailers will determine whether to put a book on sale (either individually or including in store-wide promos) based on their profit margin. The profit margin is the difference between the final sale price compared to the cost to purchase the book + its markup. ALL RETAILERS add a markup to the wholesale cost to cover their overhead (rents, utilities, wages, etc). For the sake of discussion, we will set that overhead at $1 per book. We'll assume a standard trade paperback at 200 pages through Createspace as the book. We will also assume a 30% discount to the retailer.

If you set the retail price to $14.99, the retailer pays $10.49 for the book. Through expanded distro, that means $2.74 profit for you. Including the retailers markup, that leave the retailer with $3.50 of room to play. That is plenty of room to include the title in sales promotions, like 10% off deals.

Let's say you decide "I'm going to sell my book cheap to encourage sales!" and price it at $10.99. You make $1.14 per sale. Now the retailer is paying $7.69 for the book. With his overhead, his profit margin is now only $2.30. There is less room for him to play with sales, but still some.

At $8.99, you are only making 34 cents on a sale, but you are hoping to make it up on volume. The problem is that now the vendor is paying $6.29 for the book. Which means, with overhead, there is only a profit margin of $1.70. At that price, it stops being practical including the book in sales. The book won't be included in most sales promotions, and, in the case of brick and mortar stores where shelf space is a premium, it won't even be considered for stock because the profit opportunity in relation to shelf space is too low. Why take up shelf space on a book that makes almost nothing for me when I can stock other titles with high profit potential?

It doesn't help you to price your book low if A. stores won't stock it since they can't make money and B. stores won't include it in their sales promotions because the profit margin is too low.

(***KH: Once again, emphasis added by me.)

-------------------------------------------------------------------------------------------------------------

After reading Julie's passage (more than once, I might add), I revamped my approach to print and have been pleasantly surprised by the results, to say the least. More than anything else, however, it's shown me that this is a business in which I still have a lot to learn. To that end, it's nice to know that this old dog is still capable of learning a few new tricks.