When it comes to pricing your book, there are three numbers to concern yourself with:
- The suggested retail price
- The wholesale price
- The print cost
If you are working with a combination print-on-demand/book fulfillment service like IngramSpark, here’s how things work. When you list your book in their catalog and make it available for stores to stock and sell, you set a suggested retail price for the book. This is not the price that bookstores pay for the book. It is the price at which you suggest they sell the book to their customers. You sell the book to bookstores at a wholesale price (more on that in a moment). Most bookstores will sell the book to customers at your suggested price, but some will sell it for less in an effort to lure customers away from other stores. This will not affect how much the bookstores pay you for your book.
When a bookstore buys the book from you through a fulfillment service, you must offer it to them at a price lower than your suggested retail price. This is the wholesale price. The typical industry standard for a wholesale discount is 55 percent off of the suggested retail price. That means if your suggested retail price is $15, and you are offering stores the standard 55 percent discount, the wholesale price would $6.75. From that price, the printer will subtract the print costs. What’s left is your profit.
Let’s say your book is 250 pages long with a print cost of $4.20. Here’s how the math would work out:
Suggested retail price: $18.00
Wholesale price (assuming 55 percent discount): $6.75
Your profit after the $4.20 print cost is deducted from the wholesale price: $2.55
If you wanted to increase your profit, there are a few things you can do:
- Opt for a higher suggested retail price
- Reduce the page count to lower the print cost
- Offer bookstores a lesser wholesale discount
Although a 55 percent wholesale discount is preferred, most bookstores will be okay with you offering them the book at a 50 percent discount. If you drop that down to 40 percent, most physical bookstores won’t stock the book, but online stores will still list it.
Keep in mind that these numbers pertain only to books sold through stores. When you sell books directly to readers yourself at your suggested retail price, you keep all the profits after the print cost is deducted.
For ebooks, you will generally make 60–70 percent of the suggested retail price for the ebook.
Two things to keep in mind:
- A typical mistake many self-published authors make is to increase the retail price to make more money per sale. This can do more harm than good. If you are pricing your book higher than the norm for your genre, people are not likely to buy your book. It is much better for you to sell several copies of a book with a lower profit margin than one copy with a higher one.
- A pricing tactic used by most self-publishers is to their ebook at a much lower rate in the hope of driving up sales numbers (and getting better placement in online stores). A good range for this is $2.99–$3.99.