Saturday, November 26, 2005

Distributor Discounts

Question: I'm interested in working with a distributor but I want to make sure what the discounts mean. For example, you say "Discount: 25% of net sales for mid-sized publishers." If my book retails for $10.00, does that mean they will pay me $2.50 per book or $7.50 per book? Any help would be appreciated.

I already sell a lot of books through Ingrams and B & T and I give them a 55% discount so I'm trying to compare the two.

John's Answer: If your book sells for $10.00, then they will pay you 75% of the price they sell the book for (they keep the other 25%). For example, if they sell your $10.00 book to a bookstore at 40% discount, the bookstore would pay them $6.00. You would get 75% of that $6.00, or $4.50. The distributor gets the other $1.50 (25%).

If they sell your $10.00 book to Ingram or B&T (wholesaler accounts they would take over), then they would receive $4.50 (if they sell at 55% discount to these wholesalers). You would receive 75% or $3.37 of that amount. The distributor would keep the other $1.13.
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