Dave, where can I find the PERCENTAGE breakdown on the average of what it costs a Publisher to print and distribute hardcover and softcover books. In other words, I am looking for how their broken down overhead costs out in percentage form, based on the total end bookstand price of the book?
And failing that, at least, approximately what percentage of the hardcover and softcover book does printing, shipping, and distribution amount to?
And last, what percentage range of the end bookstand price does the publisher normally pocket for its own share of the take?
To get the best possible answer, I sent off your question to my colleague Gary June, Chief Marketing Officer at Pearson Education's Professional & Technical Group. He was kind enough to find some time in his busy day to field these questions and the following are his "approximate" figures to help shed light on this question...
Typical trade margin ranges between 37% discount and 50%.
Most books are 50%, but our more reference titles are typically 37%. Some
publishers offer a bit more, others a bit less. Wholesalers work on low
single digit spreads. Co-op is another 3-5 pts at most publishers.
You can't just count printing costs, you have to factor in the cost of
returns and warehousing. That being said, stand-alone edition costs are in
the 15% range, but the biggest problem with trade publishing and the reason
it is a single digit net margin business is returns--which can run as high
as 40%.
Pearson's warehousing costs are low relative to sales and our competition
due to our size, but most publishers they range in the 5-8% range. So......
| $50 | list price book |
| $25 | to publisher |
| -4 | for printing |
| -5 | for inventory and obsolence |
| -2-3 | for royalties |
| -5 | for selling and marketing |
| -5 | for overhead and warehousing |
| -1 | for co-op |
| -2 | for editorial and marketing |
You can now see why there aren't a lot of people getting into the computer
publishing business lately! There are better place to park your capital.
By the way, these are all estimates and the actual figures vary wildly by title and publisher, but they should give you a good barometer.
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I did a writeup on this many years ago as part of our "So You Want to Write a Book?" author booklet, now on the web, at http://www.oreilly.com/oreilly/author/index.html (It's available via the 'Write for us" link at the bottom of the left nav bar on the home page.) The specific section you're looking for is at: http://oreilly.com/oreilly/author/ch03sb.html
It's a sidebar called "The business of publishing."
Even though this was written ten or fifteen years ago, it's still fairly accurate. Our manufacturing costs have gone up by a number of percentage points as we've done more two- and four-color books, have done more books at lower consumer price points, and have experienced higher return rates in the bearish computer book market of the past four years. We've brought our order entry and fullfilment costs down considerably to offset that, but our profits have still gone down because so many books are selling in smaller quantities than they did in the glory years, and you need to produce more books to generate the same revenue.
I hope this helps.