In Ravens Gathering – The Paperback I made a plea: don’t order it from Amazon. This may seem perverse, especially as advance orders can help your rankings but, as I said then, each sale would cost me money.

Which raises the question: why make it available on Amazon?

Some of you will already know the answer, but I’ll explain for the benefit of those who don’t.

If you read my No Rules posts, you’ll know I try to look at things from the reader’s perspective.  So, when I discussed pricing with the publishers, I was focused on how much a comparable book would cost in the shops. My thinking was, if readers are used to paying, say, £7.99 to read a recognised author, how much are they willing to part with to try a new one?

Clearly, I could be underselling myself but, as someone who buys books, I know I think about the cost and weigh it up against whether I’m confident I’ll enjoy the read. If I buy a Lee Child, for example, I can pretty much guarantee a good time.

The publishers, on the other hand, were suggesting a higher price because of the length of the book.  Now, I know size doesn’t matter – I’ve heard those reassuring words often enough.  It’s quality not quantity that counts. The problem is, the reader who hasn’t experienced a Graeme Cumming novel before (pretty much everyone), won’t know what the quality is like. Some might even hesitate because they think it’s too long (sadly, no reassurance offered there).

So I felt I should pitch the price at a level likely to appeal to readers, not one based on length.

For what it was worth, I’d done my research, looking at authors whose work might appeal to a similar readership.  A Dean Koontz paperback, for example, seemed to range in price from £6.99 to £9.99, Stephen King: £5.99 – £10.99.  The wide variations weren’t offering much in the way of clues.

My instinct was to go with £7.99.  But then I set up a spreadsheet.

I’m not great with spreadsheets, but they’re useful in certain situations and this seemed like one of them.

The aim was to establish the margins for different sales outlets and different prices.  Clearly, I was spending money on this project, so I needed to look for the potential to get some of it back.

You’ll be relieved to know I won’t go through the mechanics of the various permutations.  What is worth sharing is detail about the deductions.

First, there’s the cost of production.  Because I was ordering a batch, the cost per book is estimated at £3.17.  So, at £7.99, I’d be making £4.82 – if I sell them myself and ignore any costs incurred in promoting the book.

The alternative is to look at other retailers, and that’s when we encounter “discounts”.  Discounts are the percentage the retailer wants discounting from the cover price to make their profit.

For a traditional retailer, the discounts range between 30% and 40% of the cover price.

For Amazon, the discount is 60%.

That’s right, Amazon expect a discount of up to twice the amount other retailers get.

In addition to this, if the publisher is distributing it direct or to retailers, they take 15%.

So, at £7.99, my profit margins would be:

Direct sale (me): £4.82

Direct sale (publisher’s website): £3.62

Retailer – 30% discount: £1.22

40% discount: 43p

Amazon: -£1.17

That’s a big variation, isn’t it?

Looking solely at Amazon, I considered the effect of going with the publisher’s recommendation, and the loss would still be 67p.

In fact, when I did the calculations, I realised I’d need a cover price of £12.67 just to break even on Amazon, so it was clear that, to offer the book at any reasonable price, I’d have to accept a loss every time I sold through them.  The question was: how much of a loss?

Rightly or wrongly, I’ve decided to sell at £8.99, which means I lose 92p on each sale with Amazon, which is only 25p a copy more than if I followed the publisher’s advice. I figured that difference wasn’t going to skew my profitability significantly unless the book became very successful. If that miracle occurs (I can dream, can’t I?), I could review the pricing, but such success would also result in increased eBook sales as well as extra sales through other channels which could help offset losses.

Which brings me to the question at the beginning: why make it available on Amazon in the first place?  In practice, because it’s on the market, they’ll list it anyway.  But if I don’t make it available through them, they’d show it as “not available” or something similar, so the less determined reader would probably look for another book. It could also send out the wrong message to potential buyers.

In short, I’ve concluded I should leave it there. I’ve invested time and money to get this far, and I don’t want to limit the market for potential readers.

For now, I’d suggest anyone wanting a copy should support their local book shop by ordering one there.

%d bloggers like this: