The logistics of self-publishing can be overwhelming at first, and I get questions regularly via email. Here’s a recent one about a challenging book price:
My self-published print book is very big at 700+ pages. On KDP I was able to set my price at $20 and make a small royalty. On IngramSpark I have to put my retail price at almost $30, but then all the other countries (using the 55% discount) go into minus compensation. So I have to keep increasing my retail price to well over $40! No one is going to buy a paperback book at that price!
Maybe I am doing something wrong or missing something; but what am I supposed to do? Is it even worth my using Ingram for their services?
This author has several pricing-related issues. Let’s take a look at this specific situation because many of the strategies for addressing it may be applicable to your situation too.
Book Price Issue 1: Book Length and Printing Costs
There are two basic approaches to book printing:
- A traditional print run of hundreds or thousands of books, and
- Print-on-demand (POD), in which each book gets printed only when ordered.
When you do a print run, because of the scale achieved, you get lower costs per unit than you do with POD. However, the big benefit of POD is not having to hold inventory or manage its distribution. This simplifies things for indie authors, so most indies use the two major print-on-demand platforms, KDP (owned by Amazon) and IngramSpark.
Our correspondent has an extremely large book at 700+ pages, probably in the neighborhood of 200k words, which is about twice the industry norm for this type of book (fiction). The POD print cost for a book that long is relatively high—around $10–11. There is a minimum price you must set to avoid losing money, so with a high print cost, the minimum price must increase, potentially to the point of sticker shock for customers.
If this book were still in development, I’d suggest revising to make it shorter, or splitting the book in two, bringing each book down to the standard length.
Maintaining the current word count, the author could reduce the number of pages by using a smaller font, tighter margins, and so on, but that’s unlikely to make a material difference.
At this point neither recommendation is viable for the author.
Book Price Issue 2: Setting Prices across Platforms
Our correspondent is using two platforms: KDP and IngramSpark (IS). Because KDP and IS have different print costs and different sales channel discounts, the minimum prices needed to make a profit are different. Our author set the price on KDP before making sure it would also work on IS.
The author needs to find a price that works on both platforms. How would they explain it if one person bought their book for $40 on B&N and found out a friend bought the exact same book for $20 on Amazon?
The solution could be raising the KDP price or lowering the IS price (or both).
Note that the price you set on KDP and IS is a suggested retail price; retailers can, in fact, sell your book for a different price, and of course we see this happen all the time. But the starting price should be the same for the same product regardless of platform. (I’m just talking about online platforms here, not about something like special events pricing where you may give discounts or charge more for signed books.)
Book Price Issue 3: Setting Discounts
The next issue is the sales channel discount. To understand it, here’s a refresher on the calculation that determines how much indie authors make on a book sale. There are three components:
- the list price (which they get to set),
- the cut the sales channel takes (known as the “discount”), and
- the printing cost.
On KDP, the Amazon sales channel gets 40% of the price. Printing a 150-page b/w book costs $2.65, so if we price at $10, the profit calculation is:
- List price = $10
- minus Sales channel (40%) = $4
- minus Printing cost = $2.65
- equals author revenue = $3.35 ($10 – $4 – $2.65 = $3.35)
If you use KDP’s Expanded Distribution, the sales channel gets 60% (because another party wants their cut), so you make $1.35. The KDP sales channel percentages are fixed.
When you use IngramSpark, the calculation works the same, but the print cost is $3.13 and you have a choice of what discount to give the sales channel.
The minimum discount you can offer is 30%; the maximum is 55%. To entice brick-and-mortar bookstores to carry your book in their inventory, you need to offer a 50–55% discount. However, if you plan to sell primarily online, you can set the discount at 30%, thus retaining as much profit as possible.
Setting a 30% discount for the IS sales channel gives you $3.87 in revenue. Setting a 55% discount for the sales channel gives you $1.37 in revenue. (Notice that even with IngramSpark’s higher print costs, it’s possible to earn more per book with IS than with KDP.)
The author who emailed me had set all the IngramSpark discounts to 55%. By doing so, the minimum viable price went up, far above the KDP price with a default 40% discount.
The point of using the 55% discount on IngramSpark is to make your book viable for bookstores to carry. However, just making your book available is not enough. The bookstores must 1) know your book exists and 2) anticipate customer demand for it. This requires a strong marketing plan aimed at bookstores.
Because our author is new, the book is longer than the industry norm, and the retail price would be high to make a 55% discount feasible, it would be extraordinarily unlikely for bookstores to carry this book in inventory.
I recommended the author focus on online sales and reduce the discount to 30%, which would make it easier to synchronize the KDP and IS pricing to a level the market would bear.
Book Price Issue 4: Setting International Prices
Both KDP and IS allow you to sell your book in other countries. As you set the price for your primary country, they suggest converted prices for the other markets. You can accept the suggestions, or you can choose a price for each country yourself. For IngramSpark, you can also set the sales channel discount by country.
Our correspondent was allowing the system to set international prices based on the 55% discount set for the primary country. This was causing them to have to raise the primary price to avoid negative royalties (I presume due to variation in conversion rates).
As a first-time indie author, what is the likelihood you are going to have a strategy in place to get into brick-and-mortar stores in multiple other countries? Pretty slim. So for our correspondent, I’d suggest either:
- Set all countries to the lowest discount possible, or
- Set the primary country to 55% if they have a brick-and-mortar marketing plan, and set all other countries to the lowest discount possible.
Recommendations in a Nutshell
Due to their frustrations with pricing, our correspondent asked if it was worth using IngramSpark. In my opinion, yes.
As a first-time indie author with a long book, their best bet is to bypass brick-and-mortar bookstores and focus on online sales. Despite their extra-long book, printing on IS is only about a dollar higher than on KDP. By adjusting the IngramSpark sales channel discount to the lowest level, they can more easily synchronize pricing across platforms—and they may find they make more through the IS channel than through the KDP channel.
The Lessons Summarized
Book industry standards have evolved for a reason: to balance price, profit, readers’ needs, and the demands of a good story. If you plan to go outside those norms, be sure you understand the ramifications on both cost and pricing. Additionally, if you’re a first-time author, be aware that readers may hesitate to invest time and money in a long book, so shorter (and cheaper) may be a better strategy.
Before setting book prices, know your marketing and distribution strategy. Unless you are truly targeting bookstore sales, set the lowest possible discount to start. When you gain a following and demand grows, including internationally, you can rethink your marketing and pricing strategy.
Set the same retail price for the same book across platforms, and make sure your pricing works across all platforms before you finalize it.
This self-publishing stuff can be confusing, folks! There’s a lot to learn (I pick up something new with every project). If you need a hand shepherding your nonfiction book through the publishing process, get in touch at email@example.com or 919.609.2817 and let’s see how I can help.