Small Press Publishing: How to Price, How to Discount
Indie publishing has always delivered its fair share of horror stories; sadly, most of them involve booksellers and percentage points, rather than spooky clowns, sexy werewolves and so on. Here are some tips from Valley Press director Jamie McGarry on how to sell to the big boys and still come out on top.
When small press publishers meet up, online or in person, one topic never fails to arise: the difficulty of dealing with large bookshops, specifically when they request (or demand) books be supplied at a 40% discount from the RRP. I’ve heard every variation on this complaint: from ‘oh, it’s a bit difficult but we’re making it work’, to ‘so I spat on the 3-for-2 table, kicked over the Dan Brown display stand, and stormed out of that cesspit!’
Once, on the homepage of a respectable small press, I read the following admission: ‘Our books are available on Amazon, but please don’t buy them there as we make a loss every time.’ These stories (especially that last one) send a chill to my bones. So I’ve written this short article to say: it doesn’t have to be like that. Even if that bit in bold is the only thing you take away from this, it will have been worthwhile.
In the past, I’ve spoken about how, as an independent publisher, you aren’t beholden to anyone: if you don’t like the terms being offered, you don’t have to go ahead with the sale. ‘I have all the books. If you want one, you have to pay me,’ was my suggested motto. However, if you want to work with bookshops — and for many authors and publishers, this is what it’s all about — you’ll need to compromise. Waterstones, Amazon, and even the friendly indie bookshop down the street need a 40% discount to make their margins work; and they may well ask for more. Going forward, it might be safest to assume we need to be able to sell our books at 45% discount from the RRP (or ‘recommended retail price’; which is set by us, of course).
Let’s also assume we need to make a clear £3 profit every time a book is sold. Being a small publisher, selling 300 copies of each title we publish would be highly respectable; at £3 per sale that would give us revenues of £900 per title, enough to cover a designer, editor, proofreader and any overheads. I’ve been using that figure of £3 for six years now, it’s served me pretty well.
With that established, and with the decision made to pursue bookshop sales wholeheartedly, we simply need to ensure we make that £3 profit even when selling at 45% discount. We do that by setting a sensible RRP, because that ‘cover price’, set by the publisher, is our first and best bargaining tool. Here are a few examples of how it might work, using figures from the real world (correct as of October 2017):
- We print 350 64-page poetry collections for £400; assuming we’ll only sell 90% of those, that gives us a print cost per unit of £1.27. Adding our £3, and let’s say £1 gross receipts for the author (the lucky devil!), that gives us a total unit cost of £5.27. So the RRP is set for £10, where 45% discount will still see us collect £5.50 each time a book is sold. Problem solved.
- We print 250 320-page novels for £750 (as we’re not sure this one will sell 300 copies); that gives us a print cost per unit of £3.33. Adding £3 for us and £1 for the author, that gives a total unit cost of £7.33. So this time, the RRP is set for £14, and we collect £7.70 when the book sells to a shop. Still doing well.
- Finally, we go a little nuts and print just 100 copies of a 400-page hardback, with gold foiling on the spine, which sets us back £950. This time we’ll hope to sell 95 of the copies, so our print cost is £10 per unit. Adding us and the author makes total unit costs £14, so this time the RRP must be £26. Yikes.
Have we run into a problem? Is anyone going to pay £26 for that last book? Well, if they’re really into the author, and the author takes the trouble to sign and number the 100 copies, it becomes a collector’s item and almost worth that much. The second example though, paying £14 for a standard-sized paperback novel, is a serious sticking point; that’s where most small publishers, if they come up with this bit of maths, chicken out — they’re fearful of seeming unprofessional. ‘Penguin prices their paperback novels at £9.99, why are yours £4 more?’ the public cry.
The answer, first of all, is: ‘we’re not Penguin.’ Don’t ever make business decisions just to look like a big publisher, that’s sheer vanity and can only lead to disaster. In my second year of professional publishing I released a paperback novel at £12 RRP; I never heard any complaints from readers, and it soon passed 300 sales, mostly through chain bookshops — and that was 2012, when you’d hardly ever see a short mainstream paperback above £8.99. A sales rep told me £12 exactly was an absurd cover price, but he didn’t complain when his commission arrived…
But even ignoring that last paragraph, there’s another benefit to pricing this way: you can offer big discounts on your direct sales, i.e. when you sell at events, or through your own website. Picture yourself at a book fair, with your lovely books; as the punters approach, they see a sign proclaiming ‘30% off everything, today only!’ Their hearts start to beat a little quicker, and suddenly a clock is ticking and they feel compelled to take advantage of this generous opportunity. (Note we haven’t gone all the way down to 45%, we’re keeping a little in hand to cover travel costs, table fees and your time.)
How much are they paying on the day for that novel, cover price £14? £9.80, slightly cheaper than the latest paperbacks on the front table in Waterstones. Everyone’s happy. And in the longer term, this will encourage people to buy direct from you instead of going elsewhere: if the book is £14 on Amazon (or £12.60, they love a discount too!), but £10 on your website, the decision is an easy one. If they decide to go with Amazon for the convenience, that’s their choice; you still get your £3 profit either way. Your publishing empire can flourish, everyone in the supply chain wins, and the world is a better place. Hooray!
As ever, if you spot a mistake in any of the above, please do let me know by way of a reply; I love a good discussion about this sort of thing. If not, and if you hear a small publisher talking about their discount woes in future, please send them in this direction — for my sake, as much as theirs.