2/14/08

How I'm Getting Filthy Rich Off Gullible Authors

What is the average printing cost of a copy of a typical $15.95 LDS fiction book?
I always hesitate to answer questions like this because:
  1. I'm not privy to the numbers for any publishing company other than the one I work for,

  2. Some of my colleagues are gonna' be ticked that I'm giving out this info; and

  3. I imagine this question is being asked by an author who thinks they're getting ripped off based on the measly royalty they're getting and the limited marketing/promotional budget their book has been given. And that many of my readers feel/think just like him/her and are going to yell at me in the comments section and via e-mail and threaten to smack me in the face because I've reduced their heart and soul to "product" status.
But I personally believe that there is some merit in full disclosure, so I'm going to reveal all the dirty secrets of the LDS publishing industry and once and for all admit that we're getting filthy rich off the backs of you poor, gullible and naive authors. (I hope everyone caught the thick sarcasm there.)

So the answer is:

It depends on the number of books you print at a time, the number of pages in the book, the type of cover (matte, glossy, embossed, etc.), whether you print here in the U.S. or overseas, the relationship you have with your printer (for example, if you'll be printing 10+ titles with them in one year vs printing 1 title with them), whether you use a standard press or a print on demand, shipping costs, etc.

Here's a scenario with a title from our company. For us, this is fairly typical of a new author's first fiction book.

Price: $13.95; 2500 copies, 6x9 trade paperback, 224 pages, 4-color flat gloss cover, printed within 100 miles of the warehouse, on a standard press = $1.40 per book.

Now BEFORE YOU GO ALL CRAZY because you just did the math and it's completely unfair that the author is only getting $1.12 per book (8% royalty) while we're raking in a big fat $11.43 per book in profit, you have to figure in a few more things. The true cost of the book is not just the printing, you know.

Print run: $3500
Editing: $500
Typesetting: $900
Cover Design: $500
Pre-release promo: $650
Initial Marketing/Promo: $2000
Total $8050
Per book cost: $3.22

Now, here's how you use those numbers:
$13.95 (Retail) — $3.22 (initial cost) — $5.86 (avg 42% Wholesale Price) — $1.12 (Royalty) = $3.75 gross profit per book.

Out of that $3.75 per book, we still have to cover all our internal expenses and overhead such as rent, phones, staff, etc., etc. This particular book did not sell through its initial printing so we lost money. (We generally do not make money unless we go into a second printing within the first year of release.)

Now, these numbers are going to vary between publishers. The big two (which are now one) have the benefit of company name recognition (both with bookstores and individual readers) AND guaranteed access to the LDS market through their websites and shelf space in their retail stores. They also have the benefit of what we call "economy of scale" which is the more you do, the cheaper you can do it.

Smaller publishers have a much harder time just getting their product to market. They have to take the financial risk with no guarantee that they'll be able to get their books on the DB/Seagull shelves or even on the DB website. And let's face it, if your book is not there, 90+% of the LDS buying public will not even know that it exists.

The costs to the really small publisher is even higher. There are a few that I know of that use a print on demand service and their printing costs could be as high as $6.00 per title—which means if they do any marketing at all they're going in the hole.

You may be thinking now, how do any of the smaller publishers stay in business? The answer is, a lot of them don't. That's why you see a lot of come and go LDS publishers. The ones that do stick around are ones who are able to get their books on the DB/Seagull shelves and who have titles that sell upwards of 6000 copies in the first year—or their fiction is a labor of love subsidized by their non-fiction titles.

8 comments:

Tristi Pinkston said...

Thanks for breaking this down so we can see it -- I think even if we know the books are expensive to produce, it's helpful to see the actual numbers.

Don said...

Wow. Seeing these numbers is very informative.

To the uninitiated, 2500 would seem like such an easily achievable number. But I'm beginning to understand that it's more difficult than it looks at first.

Anonymous said...

Can you break this one down for me:

6-9 Hardback, 500 pages, print run of 50,000 copies, printed in China, 4-color flat gloss cover,

LDS Publisher said...

I'm sorry. I really don't have good numbers for that one. We've never done printing overseas but I've heard that it's about 1/2 what it is here in the US.

Anonymous said...

LDS Publisher-

You will be glad to know that I am not a disgruntled author, but rather a curious bookseller.

Anonymous said...

I think you have to print about ten projects at the same time to make it worth the cost of shipping on a slow boat to China.

So can you break down the 500 page hardback, 50,000 copies if it were printed within 100 miles of downtown Salt Lake City?

Janet Jensen said...

Thank you for offering some numbers and formulas. And I won't hold you to them! Authors are often asked in Q & A sessions about costs and royalties, etc. and it's most helpful to have the brekdown you've suggested - - - - as ballpark figures.

It would be very helpful to know just how much it does cost for your publisher to produce your manuscript into a book - editing, cover design, etc. It seems like information an author should know and understand.

And it would also be helpful to know how many books the publisher must sell in order for a book to be profitable. Which begs yet another question: what are typical sales numbers in the LDS market? What is considered a "successful" book in terms of sales?

I was recently surprised to learn that projected # of editing hours can be a factor when a publisher is condering a manuscript for acceptance. I think we all try to send in the most polished error-free manuscripts possible, and now we have another incentive to do so!

Janet Jensen said...

oops! Paragraph one should read "breakdown."