If you are self-publishing a book, you need to understand wholesale discounts and how it affects the amount of money you will make when you sell a book through retail channels. When I talk to authors about how to calculate their book’s profit they’re often a little lost when it comes to understanding wholesale discounts. In this self-publishing article, I will explain what a wholesale discount is, and how to calculate the amount of money you will make when you sell your book.
To clarify, wholesale discounts apply to print books only. I’m not talking about eBook sales here, just print.
What is a wholesale discount?
In very simple terms, a wholesale discount is a discount off the list price of your book that the book wholesaler requires to buy your book from you for resale.
If your book is listed at ten dollars, they’re not going to buy it from you for ten dollars then sell it to a consumer for the same ten dollars. They would not make any money that way. They require that you sell your book to them at a discount off the set list price. The amount of that discount is called a wholesale discount.
To calculate your book’s profit, you take your list price, subtract the wholesale discount, then subtract the printing cost of the book. What’s left over is how much you made off the sale of that book.
Let’s look the following scenario:
- you’re printing a paperback book with 300 pages through IngramSpark
- you’re setting a retail price on the book of $15.00
- the print cost of the book through IngramSpark is $5.35
- you’re selecting a wholesale discount of 40%
Take that list price of $15 and subtract a wholesale discount of 40% which leaves $9.00. Take that nine dollars and subtract the printing cost that IngramSpark is going to charge you of $5.35. That leaves $3.65 which is how much you will make from that book sale.
$15.00 list price
-$6.00 wholesale discount (40% of $15)
-$5.35 printing cost
=$3.65 profit made per book sale
With IngramSpark you can set your wholesale discount as low as 30 percent. With CreateSpace you have two options:
- Their Standard Distribution which will get your book listed on Amazon.com only for a 40% wholesale discount
- Their Expanded Distribution for a 60% wholesale discount, which will get your book on more online book retailers, such as BarnesandNoble.com and Booksamillion.com, as well as Amazon.com.
IngramSpark will get you that wider distribution for a 30% wholesale discount, versus the 60% required at CreateSpace. If you are looking to have your book available on other online book retailers other than Amazon, I suggest using IngramSpark due to the lower wholesale discount needed for that level of distribution.
This post is part of the Author Toolbox Blog Hop. A monthly hop for authors who want to learn more about being authors.
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