Pricing Your Self-Published Masterpiece. Caveat Emptor!
When first asked how much royalty I wanted from my novel, Deadly Portfolio: A Killing in Hedge Funds, my only thought was keeping the costs as low as possible. Outskirts Press, the publisher, recommended a price of $18.95 for the 328-page paperback. I objected. The price was too high for the market. Outskirts replied that print-on-demand (POD) books cost more than books put into circulation by traditional publishing houses who print thousands at a time. At Outskirts Press, cost are high, but this was the first of a long string of self-serving arguments on the publisher’s part. Later, I found costs with other POD publishers very much inline with the industry, competitive and profitable for the author.
Outskirts Press then encouraged me to offer the book at a discount, insisting that major brick-and-mortar dealers expected a discount of 55%. At the time, I had no idea as to how impossible it was to get a book into chain stores like Barnes and Noble or Borders, so I agreed. Then I did the math. My cost as the author was fixed at $8.21. Discounting the price of $18.95 by 55% put the book at $8.53. Thus my margin, my royalty, was $.32. $.32 a copy!
The $.32 a copy was blown away by the cost of shipping the books to me by the publisher and left no margin whatsoever for mileage, advertising items, and other expenses that I would incur in promoting the book.
First Rule: Use common sense. Prices need to be in line with current market values in order to sell.
Second Rule: Don’t be so eager to jump off the melon truck that you’ll accept whatever you’re told to be the gospel truth.
When I complained and asked for consideration, I was advised that most of my sales would come through Internet dealers like Amazon, where shipping would not be an item. Overlooked in their response was that I had been urged to pay for the right for brick-and-mortar retailers to return copies that didn’t sell as an inducement to get them to stock it. Outskirts knew, in other words, that my early sales would not come from brick-and-mortar dealers, but they withheld this information when they urged me to pay for the retail return option and then used the same information to justify their refusal to reconsider our pricing agreement.
The correct advice would have been to approach the brick-and-mortar outlets once I built up my sales on the Internet and my sales record was available and could be checked.
I asked friends to call the local chain store and ask for my book. It wasn’t in stock, of course. Clerks replied that it could be ordered but since it was a publish-on-demand book , they would never carry it because it could not returned if it didn’t sell. That’s the way the data appears on computer at the store. So much for the return option. No salesperson we called knew that a retail return option was in place. The high fee for the retail return option was one more way that Outskirts Press exploited on my ignorance and picked my pocket.
After the calls, I visited the Barnes and Noble stores in two different locations. I presented my book to the community representative who praised its appearance. Each asked me to keep in touch, but both were clear in letting me know that in order to sell with any national chain, I needed to show a good sales record. A catch-22 of sorts. They wouldn’t carry my book unless I had a good sales record, and I was constrained in creating a record because my book was not available in popular stores. This is common knowledge and also had to be known by the sales counselors at Outskirts.
But on to my next point. Outskirts printed the price of $18.95 on the book cover. The community relations persons for Barnes and Noble commented immediately that it was too high and that the store would need at least a 55% discount before it would ever be considered.
Independent retailers all registered the same reaction. They asked for the “industry discount,” 55%. Only two independent retailers paid cash, so I walked out with my $.32 profit. The other dealers would only take the book on consignment. They asked for a 60/40 split—60% to me; 40% to them, but they did not want the split against the high price on the book cover. They wanted to be competitive with Amazon and the other stores. In order to place the book on consignment, I needed to accept 60% of the discounted price, and I ended up losing money. ($18.95 X (1-55%)) X 60% = $5.12 against my costs of $8.21, or a loss of $3.09 per book.
One dealer agreed on $13.95, a competitive price, and I collected my 60% on every sale or $8.37 against my cost of $8.21; for a profit of $.16. Big deal.
Sales out of my own inventory or on consignment do not get reported to industry record keepers. I could sell 1,000 copies and not register a single sale with an authority that the chain store retailers could reference before deciding to carry my book.
Third Rule: Do your research.
On such miniscule margins, an enterprise cannot survive. I wanted to recover the costs of publishing the book and the costs of a promotional campaign as well as several add-ons like the retail return option, described earlier, custom cover design and so forth.
In my eagerness to get my book out to readers and reviewers, I put myself in a losing situation. The only way I could make a profit was to load books into the trunk of my car and start peddling them on street corners. At $12.95, I could make $4.71 each. But, hey, if someone offered me a job selling books for commissions only, I’d laugh right out loud.
Everything Outskirts presented was disclosed accurately and explained. I hold myself responsible for not setting my own goals more realistically and then putting a plan into place to optimize my chances of making things work out. I know how to do that. My analysis, regrettably, was always about three breathless weeks behind my enthusiasm.
That said, Outskirts Press did me a severe disservice by withholding good, helpful advice and letting my obvious inexperience and eagerness take the lead when I should have been regarded as a client who needed guidance and mentoring. I have no respect for their ethics. I will publish again. I am posting on the Internet and becoming recognized. My mission now is to keep others from making the mistakes that I did.
In my profession as a financial advisor, comparable behavior would have been grounds for discipline. Any advisor who sold unnecessary products to an inexperienced investor was required to justify the transactions on the grounds of suitability and forced to answer to charges of inappropriate professional behavior.
Everything in this article is true and can be supported by the correspondence I hold on file. It took me twice as long and three times the money to get my book positioned, as it deserved. It is regaining lost ground every day because it a good piece of work that has been enthusiastically received by the critics, creating a buzz among friends and acquaintances, and it is selling well.
I have changed publishers, and I am very happy with createspace who have produced the book at a cost to me of about $4.00. It is being offered at $13.99—nearly five bucks less than Outskirts’ price but with 13 times greater payout to me. The quality of createspace’s work in every respect equals or exceeds Outskirts.
This is the second in a series of articles that I am going to post on self-publishing. If you have enjoyed reading it, I would like to invite you to click on the “About the Book” caption on the left had side of this page and take a look at my novel. Thanks.