Many newbie authors don’t understand how basic retailing works. I sometimes see posts on author’s forums from people who are most upset because Amazon is selling their books below THEIR price.
Let’s Take a Short Course in Business 101
You write a book. You then want to sell your book. (And who doesn’t?) There are different way to accomplish this, depending on the book format. These days most authors sell an ebook and a print edition. I’m now going to explain the differences in how they are distributed.
For ebook editions distribution is pretty simple. You upload your file to Amazon or Smashwords. You determine your retail price. Amazon asks you what percentage of that price do you want them to pay you as a royalty. You make you selection, submit your file, and viola! You ebook is now available for purchase, at your price.
So, how are you able to do this? Well, simply put, ebooks are intangible. They’re an electronic file. Amazon didn’t purchase tangible, printed copies of your book for resale.
Print editions are different. They are a tangible product. It costs money to have them printed and distributed to booksellers. So, how does this work?
Most small press and independent authors will usually use Print on Demand. POD for short. Here’s how POD works. Once your book is typeset and your cover is designed, you upload the file to the distributor, which, oftentimes, is Ingram. You include your retail price, along with a discount, typically 55%. That discounted price is your wholesale price. Your retail price is, essentially, the Manufacturer’s Suggested Retail Price, or the MSRP.
So what’s a wholesale price?
Your wholesale price is what resellers, or retailers, you know, book stores, pay for your book. They then stock your books in their store.
So why aren’t they selling your book for your price?
The retail price is what the consumer, in this case, the person who wants to read your book, pays to purchase it from the bookseller.
The bookseller has overhead expenses, such as rent, the electric bill, and so forth. Therefore, he or she has to factor in their overhead and sell the book at a price so that they can make a profit. That price may be the same as your MSRP, or it may be less. If they can sell it for less, the consumer is more likely to buy. If they are having a sale, they may drop the price even lower. Either way, the final retail price is determined by the bookseller, not the author. The author’s price, which is printed on the book cover, is the suggested price only. There is no written agreement between the author and the bookseller.
Your other option–print and distribute it yourself
If you’re not happy with the way books are printed and distributed you can print and distribute your book yourself. Some authors choose to do this, and there is certainly nothing wrong with it. However, there are some disadvantages. First, you’ll have to find a book printer and pay for a print run, which is typically 500 or 1000 books. That’s a lot of books, so you’ll need a place to store them.
Once you have your print books in hand, you can sell them directly from your own website at your MSRP. Again, some authors do this, quite successfully, but it’s also a lot of work. Once a book is sold you’re responsible for the shipping, so plan on spending time waiting in line at the Post Office. You can also sell the book yourself on Amazon as a third party seller. However, you’re still responsible for fulfilling the order, which means you’re still the one who has to go to the Post Office.
So there you have it. If you want total control of the MSRP, and you don’t want anyone selling your book for anything less, then you’ll have assume responsibility for the printing and distribution, and well as fulfilling the orders. Again, some authors do this successfully, while others do not.