4 ms·

If a publisher sells a book in a store, they typically split the revenue 50/50 with the store. So, that $20 book gets the publisher $10 in revenue. Then, they

by spatten 15y ago

If a publisher sells a book in a store, they typically split the revenue 50/50 with the store. So, that $20 book gets the publisher $10 in revenue. Then, they had to print the book and ship it. Plus, they don't get paid for the books that they print but don't sell. This is a surprisingly high number on some books. Out of that they have to pay the author (usually 10% of the revenue, or $1) and the printing and shipping costs of ALL the books, not just the ones that sold (say $2-$3 per book sold). Plus they have to pay to get the books a good placement on the shelves and pay for the people to go to all of the bookstores and arrange for them to buy the books. That doesn't leave much. Selling an e-book for $10 and getting 70% of that from Amazon or Apple seems like a good deal in comparison. The real benefit of ebooks, though, is that publishing a book is way less risky when you don't have to sink a lot of costs into printing books. Looking at this from the viewpoint of an author leads to an even more obvious answer...

aristus 15y ago
Spot on, but a minor correction. The 70% (or 60% for print-on-demand) revenue split advertised isn't what it seems. This is how it breaks down in reality: Paperback retail price: $15 Amazon takes 40% of retail: -$6 Amazon charges you full cost of printing: -$2.72 Your cut: $6.28, or 42%. Ebook retail price: $5 Amazon takes 30% of retail: -$1.50 Amazon charges you a "digital delivery fee": -$0.35 Your cut: $3.15, or 63%. This method of calculation, if not the specific values, are standard. Note that this is a MUCH better per-unit that you'd get from a traditional publisher. Often they will take 15% of retail for their margin, but they have to sell copies to bookstores at 60% off retail. So a $15 book might net you a buck, while they take home three. It's justifiable because they take the risk on printing large numbers of books, distribution, contacts, marketing, etc. But a justifiable deal and a good deal are not always the same thing. A publisher would have to sell 6-8X more books than you can by yourself before you'd make the same revenue. Meanwhile they would own your copyright and other things like the right to publish a sequel.
- phaus 15y ago
  Your example prices the book too low. Even at 100% it would be impossible for the author to make the same amount of money. 9.99 is a price point that most people seemed to think was reasonable. If a $15 paperback book was prices as an ebook on Amazon for 9.99, the author's cut would be 6.64. This would allow an author to sell the ebook at 2/3 the normal price while still receiving a larger payment.
  - aristus 15y ago
    Not sure I get your point. At a higher price, the net would higher, yes. But it is still not and will never be "70%" as advertised by Amazon. The total cost of printing the book or "digital delivery" is taken out of the author's cut. Traditional publishers offer much worse deals, in return for marketing muscle. Btw, those are the real prices of my book. It's not expensive, not cheap. Maybe I'm pricing the digital version too low, but figuring that out is part of the game. http://www.amazon.com/Lauren-Ipsum-ebook/dp/B0069ZG8MY/ http://www.amazon.com/Lauren-Ipsum-ebook/dp/B0069ZG8MY/
    - phaus 15y ago
      I thought you were just giving a made up example to make a point. I do think you are pricing your ebook too low. As long as your paperback is selling decently at 15.00, I think that most people would consider 9.99 for the ebook more than fair. Using the math that you did, it would give you 6.64 instead of 6.28, while also giving the reader a substantial discount. If your ebook is only 5 dollars, you will lose money in comparison to your paperback. I used the number 9.99 because for a long time it seemed to be the "standard" price for an ebook. Lately the costs have been going up pretty rapidly. Pricing a product does take a lot of time and research. I haven't published a book before, but I have bought lots of ebooks. When I look at a book on Amazon, if the price of the ebook is at least 33% less than the price of a paperback or hardcover, I'll at least consider it. If there isn't a significant price advantage, I wouldn't ever purchase an ebook that is readily available on paper. I think that the best bet is to first decide how much money per book you want to have in your pocket once all is said and done. The amount of money you are comfortable receiving should guide your prices. Once you have a ballpark figure, you can tweak the price just a little to see if you can increase your volume.
- deleted 15y ago
  [deleted]
- spatten 15y ago
  You're right, I completely forgot the digital delivery fee. It's, if I remember correctly, $0.15 per megabyte, rather than a flat $0.35. So this can be significant for books with lots of images.
  - aristus 15y ago
    FWIW, my book is 3.something MB. I don't care that much, though most people assume that revenue splits come after costs. It turns out that most/all book contracts give everyone's cuts out of the retail price, then costs. The rest, if any, goes to the author.

by spatten 15y ago

aristus 15y ago

Spot on, but a minor correction. The 70% (or 60% for print-on-demand) revenue split advertised isn't what it seems. This is how it breaks down in reality: Paperback retail price: $15 Amazon takes 40% of retail: -$6 Amazon charges you full cost of printing: -$2.72 Your cut: $6.28, or 42%. Ebook retail price: $5 Amazon takes 30% of retail: -$1.50 Amazon charges you a "digital delivery fee": -$0.35 Your cut: $3.15, or 63%. This method of calculation, if not the specific values, are standard. Note that this is a MUCH better per-unit that you'd get from a traditional publisher. Often they will take 15% of retail for their margin, but they have to sell copies to bookstores at 60% off retail. So a $15 book might net you a buck, while they take home three. It's justifiable because they take the risk on printing large numbers of books, distribution, contacts, marketing, etc. But a justifiable deal and a good deal are not always the same thing. A publisher would have to sell 6-8X more books than you can by yourself before you'd make the same revenue. Meanwhile they would own your copyright and other things like the right to publish a sequel.

phaus 15y ago
Your example prices the book too low. Even at 100% it would be impossible for the author to make the same amount of money. 9.99 is a price point that most people seemed to think was reasonable. If a $15 paperback book was prices as an ebook on Amazon for 9.99, the author's cut would be 6.64. This would allow an author to sell the ebook at 2/3 the normal price while still receiving a larger payment.
- aristus 15y ago
  Not sure I get your point. At a higher price, the net would higher, yes. But it is still not and will never be "70%" as advertised by Amazon. The total cost of printing the book or "digital delivery" is taken out of the author's cut. Traditional publishers offer much worse deals, in return for marketing muscle. Btw, those are the real prices of my book. It's not expensive, not cheap. Maybe I'm pricing the digital version too low, but figuring that out is part of the game. http://www.amazon.com/Lauren-Ipsum-ebook/dp/B0069ZG8MY/ http://www.amazon.com/Lauren-Ipsum-ebook/dp/B0069ZG8MY/
  - phaus 15y ago
    I thought you were just giving a made up example to make a point. I do think you are pricing your ebook too low. As long as your paperback is selling decently at 15.00, I think that most people would consider 9.99 for the ebook more than fair. Using the math that you did, it would give you 6.64 instead of 6.28, while also giving the reader a substantial discount. If your ebook is only 5 dollars, you will lose money in comparison to your paperback. I used the number 9.99 because for a long time it seemed to be the "standard" price for an ebook. Lately the costs have been going up pretty rapidly. Pricing a product does take a lot of time and research. I haven't published a book before, but I have bought lots of ebooks. When I look at a book on Amazon, if the price of the ebook is at least 33% less than the price of a paperback or hardcover, I'll at least consider it. If there isn't a significant price advantage, I wouldn't ever purchase an ebook that is readily available on paper. I think that the best bet is to first decide how much money per book you want to have in your pocket once all is said and done. The amount of money you are comfortable receiving should guide your prices. Once you have a ballpark figure, you can tweak the price just a little to see if you can increase your volume.
deleted 15y ago
[deleted]
spatten 15y ago
You're right, I completely forgot the digital delivery fee. It's, if I remember correctly, $0.15 per megabyte, rather than a flat $0.35. So this can be significant for books with lots of images.
- aristus 15y ago
  FWIW, my book is 3.something MB. I don't care that much, though most people assume that revenue splits come after costs. It turns out that most/all book contracts give everyone's cuts out of the retail price, then costs. The rest, if any, goes to the author.