New Media
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Who makes money from books?

 

Whether or not your prime motivation was to make money is not the point, you do deserve to be properly rewarded.

So how does the traditional publishing industry recognise that basic requirement? Generally speaking, by paying authors the smallest amount they can legally get away with—a ten percent authors royalty. Whoopy do!

Will this generosity provide you with a comfortable old age or even a comfortable sofa? Probably not, unless you are a celebrity ( in which case your agent will arrange for somebody to write it for you), you are an already established “name” in the media or you've slept with somebody famous. Otherwise, forget it!

Unfortunately in the eyes of a publishing house, this is not about quality or content, this is about money and commercial decisions. Sorry. If you don't fit the strict criteria that they have for a commercial venture, then it really doesn't matter that you have created a real work of art, they will just not be interested.

So, put aside any preconceptions you may have about publishing, what you may think you want at the moment, may not be what you actually want, if you were in full possession of the facts. The first step is to understand the product you have created, for that is what a book is, and who will buy it.

So who makes money from books?

    Here is the equation. Let us assume that a book has a retail price of £10. The shop that sells it to you will probably take around £3 to £4 of that as their retail profit. From that margin they have to pay towards the cost of running their premises, the staff, the pilferage, the advertising, the rates and a profit for their shareholders. So what is left is around £6.

Next in line is the publisher. They have to pay for the cost of production. This includes the typesetting, layout and design and the actual cost of printing the book plus distribution and promotion. That will swallow up a further £5.

 

Last in line is the author, without whose hard work none of them would get fed. So, for all your trouble, here is a pound. Don't spend it all in the same shop. No wonder there is such a queue of people trying to get into print!

Now, turn the coin over once again and look at the same equation from a different perspective. Suppose that you were both the author and the retailer. Now instead of just 10% as the author's royalty, you add a further 40% giving you 50% of the cover price. Five pounds profit per copy is a lot more interesting that just one pound.

To be the retailer doesn't mean you need to have a bookshop. Many niche authors simply receive orders by post, email or through a shopping cart on their website and fulfill them from home. No overheads, very little hassle and money in the mail every day.

What puts people off though is the sheer cost of printing a large enough quantity of books to get them at a realistic price, and having somewhere to store them all. The thought of a garage full of books which will go moldy before you can sell them is not a happy one. In fact it is exactly this that has killed off so many small niche publishers in the past.

Fortunately technology has come up with a solution. It is called Print on Demand. Surprisingly, many of the books you see in the bookstores are printed in this way. What happens is that a customer asks for a title at the counter that they can't see on the shelves. The assistant looks it up on the computer and finds it on their wholesale books database. An order is then placed on line. This triggers a Print on Demand request which is fulfilled within 24 hours and posted out to the store. It is this technology that now makes it possible for the niche author to get into print and bypass the conventional publishing route.

Whether or not you chose to make your title available to the retail book trade, you can use this method to get quickly and inexpensively into print. If you follow the formula, you only need to print 100 to recover your costs. After that you only order what you need to satisfy your customer orders.

 

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