Publishing 101 or setting the price for the book
This is part of the business of publishing and marketing. Initially, I was selling the book for $25 and I was getting it printed and bound at Staples in small volumes. While that was useful to make a few sales, I wasn’t making much money from the book. Because duplication costs, binding, etc, I was paying between $18-35 per copy. (Yep, I don’t go there any longer--I had a reasonable estimate and when I went to pick up my order, they said there was an error.)
As I progressed, I improved the production by printing them on my duplex laser printer. I am not sure what the price was for those as I would have to determine the number of books I produced, the binding charges and the supplies, including cartridges. This was better, but I knew the deal that Amazon specifies on their website.
Well, lets see. If I am charging $25 and my cut to print and ship the book is $11, obviously, I won’t make any money if Amazon sells the book. Simple solution, raise the price, $49.95.
There is an annual fee of $29.95 to be a member of Advantage. Your fee includes unlimited title enrollment, access to our Vendor Services team, and access to the Vendor web site to manage your account. The standard terms for Advantage vendors is 55% - you keep 45% of the List Price. That means that Amazon.com is entitled to 55% of the List Price for each unit that sells. You, the vendor, receive 45% of the List Price. You set the List Price, also known as Suggested Retail Price, of your products, and all payments made to you are calculated based on the List Price. If Amazon.com decides to further reduce the sales price to the customer below the List Price, the customer discount comes out of Amazon.com's percentage.
Okay step forward. I paid the set up cost with my printer/distributor. This includes a contract with Amazon. Okay good. When I do this, there is a default publishers discount that “I can set”. Okay, I set it at 45%. Amazon will buy it for $27. My price is the retail price. My book goes on Amazon for $29.95. Well, I am not going to sell any books from my website if Amazon is selling them for $20 less. Why did I raise the price if no one is going to charge that amount.
I re-read what Morris Rosenthal has explained about the print on demand market. I had used his advice in choosing Lightning Source Inc. However, what I didn’t know was that he did not have an agreement with Amazon. He set his general wholesale discount at the value he wished to use. Then I change that discount. I succeed in getting Amazon’s price up to the retail price, but this really slows sales. I have set a new price for my book at a more reasonable $34.95 and chose a discount that I hope will place my book at a more favorable price with its competitors.
In setting the price, I wondered why Amazon had not changed their price. I find a note with my printer that my cover must be changed as well because a price code had been embedded in the book. I complete the change, upload the new cover with the new price, pay my $40 and I’ll wait for the changes to show up and see what effect they will have.
I am sure there would be others smiling now because they know everything that I am slowly learning.