Friday, September 23, 2005

Book Marketing: Distributor Discounts

Question: Thank you for the fabulous online resources, such as your Top Independent Book Distributors page. I have a question related to some of the data on that page. You use the term discount. I am not clear on how it is being used. For example, you say that one distributor has a "25% to 30% of net sales" discount. Does this mean the publisher receives that amount (25 to 30% of list price)?

John's Answer: Many people get confused by discounts. Let's use an example of a book priced to sell for $10.00 in a bookstore.

List price: $10
Net price (sales): $5 (that's probably a good average for distributors since they sell many books to wholesalers and bookstore chains).
Their 25 to 30% discount comes out of the net price of $5.00.
So the distributor ends up with $1.25 (25% of $5.00)
And you the publisher end up with $3.75.

The numbers would be a bit different at 30% of net:
Distributor gets $1.50.
Publisher gets $3.50.

So, on a book selling for $10, the publisher ends up with about $3.50 or $3.75 when using a distributor. Given a print cost of $1 or a bit more (if the book is priced correctly), the publisher ends up with about $2.50 for profit and other expenses (advertising, office, design, etc.).

Given those kinds of numbers, you can see how you'd like to be able to price the book higher, get the cost of printing down lower, and/or sell more books direct to consumers via through bookstores (and distributors).
blog comments powered by Disqus