N-Wing says According to this and this, the two biggest book costs are distribution and printing, both of which are essentially $0 for electronic formats. In a very small sampling, some ebooks were cheaper and some more expensive than paperbacks. Lets mention this greed thing again.

My reply: I'd have to know which ebooks you're referring to before I could posit a reason for the price difference. A few publishers price electronic versions and print versions exactly the same so as to not undercut print sales. However, many publishers do give their e-books lower prices than their print books.

But the price points are a bit irrelevant, because ebooks have largely been failures except when you're dealing with romance, erotica, porn, and technical documentation. Romance/erotica/porn readers tend to consume a whole lot of books, and e-books are cheaper and psychologically easier to discard than paper books. Plus, e-book readers provide the ultimate brown paper wrapper to prevent the other people on the commuter train from seeing garish covers featuring vast tracts of mantitty or heaving cleavage. Technical documentation ebooks sell well because the people who buy them mostly need tech books for quick, specific reference and don't intend to read large sections in one sitting as they would with novels or long nonfiction.

But, sales show that most readers of other forms of fiction and nonfiction prefer to buy books as physical paper objects. This may change in the future if better, cheaper ebook devices become available, but so far, the fastest way to produce a book that almost nobody will read is to release it in ebook format. Yes, some people enjoy reading long works on their computers; most demonstrably do not.

My first story collection was an ebook entitled Blood Magic which cost $3 (which fairly represented the cost of cover art, layout, etc.) as a download on Fictionwise and $6 in CD format (which fairly represented the additional labor/materials involved in putting the CD version together). My current book is a trade paperback that costs $18.95 at most places. You would think that a $3 collection would sell way better than a $19 collection. However, in the 6 months that Sparks and Shadows has been available, it has vastly outsold Blood Magic, which was available for 5 years. I've heard from a lot of other writers who've had similar results. I've also heard from publishers who got started doing electronic editions but who turned to print after they kept getting messages from customers who said they'd buy more if only the books weren't so expensive to print out.

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(Go back to Part One: Why New Books Are So Expensive or Part Two: Why new textbooks are so expensive)

spiregrain says According to Brewster Kahle of the Internet Archive, printing and binding a 100 page book costs $1, which is less than the admin cost of lending and taking back a library book. See here for what this might mean for book sales and lending models for public domain books.

My reply: It would be awesome if small press books could be produced for $1 a copy. Based on what I've seen, though, a 100-page perfect-bound book (that is, a paperback with a spine) on decent paper done through a reputable POD print shop will run $2.40-$2.75 per copy, depending on things like setups and proof changes. This is assuming the book has a glossy color cover and a B&W interior. More pages equals a higher per-book cost, of course.

If the publisher were able to order books in large volume, he could get the desired perfect-bound books for a cheaper per-book price from an offset printer -- but the publisher would have to order a minimum of 5,000 copies to even begin to get the per-book price down below $2.50 a copy.

To get it down around $1, he'd have to order 20,000 or so. Aside from requiring an investment of $20,000 from the get-go, that's a heck of a lot of books to store and process. Most small presses are 1-to-5-person operations and they don't have warehouse space, nor the funds with which to rent any.

And then there's the issue of being able to sell all those books and recoup the printing investment. The average small press short story anthology sells 150-500 copies. A fiction collection or first novel from a literary writer published by a university or specialty press may comfortably sell 1000-3000 copies. An established, award-winning literary poet who gets his or her collection used as part of the curriculum of college poetry classes can probably sell 1000-1500 copies; most other poets sell far more modestly. So, 20,000-copy print runs just aren't sustainable for many book projects, and so $1 books just don't happen.

On the other hand, the publisher could produce 100-page B&W saddle-stapled 5.5"x8" chapbooks on his own for less than $1 a copy if he considers his own labor to be free. This will require ready access to layout software, a copy machine and the proper folding/stapling equipment or an actual booklet-making machine (some models run about $10,000 new). The publisher will also need lots of time and a fairly large room dedicated to his assembling and storing the books. Chapbooks are most cost-effective if the publisher works for a company that owns a big copy machine and he or she can negotiate with that employer to bring in his/her own paper and toner to do print runs.

While the resulting booklets may have a charmingly DIY look, they are not going to be aesthetically competitive with perfect-bound books with glossy color covers. And it's hard to generate even 500 copies of a book this way. I've known several small-press publishers who started out doing chapbooks and 'zines by hand; most all of them eventually got tired of the labor involved and switched to using commercial offset printers or POD when they could.

(Go on to Part 4: Book distribution and printing cost too much. Why don't publishers switch to e-books?)

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(Go back to Part One to read about the mass market paperback pricing mentioned here)

I've heard from a couple of people who don't believe that the economics mentioned in Part One work for textbook prices.

I look at the biology textbooks I've used -- which have been massive, sturdy hardbacks with lots and lots of illustrations and photographs (pro photographers expect to get paid) and color ink and slick paper -- and I see pretty high production/printing cost right off the bat.

Specialist nonfiction of any kind pays much better than fiction, and publishers have to pay more to interest a professor in producing a textbook that will take a lot of his or her energy and time away from teaching and research (in some cases, choosing to write a textbook may actually harm a prof's career because a textbook doesn't "count" the same as other scholarly publications that may take much less time to write). The publisher might, for instance, have to recoup an advance of $40,000 or so across 5,000 copies, and I don't think it's greedy to expect $40K for authoring a book that takes a lot of expertise and several years to write. And finally, distribution will still be expensive no matter what kind of book you're producing.

According to the National Association of College Stores (NACS), Collegiate Retailing Industry, Higher Education Retailing Market, the breakdown of each $1 of an average new textbook's price goes like this:

Paper and printing: 32.1 cents
Distribution: 22.9 cents
Marketing: 15.3 cents
Author's income: 11.5 cents
Shipping: 1.3 cents
Publisher's operations: 9.9 cents
Publisher's income: 7.0 cents

So in the case of textbooks, printing costs more than distribution, and marketing and the author get the other big hunks of the cheese. The publisher ends up making about $5 profit from each copy of a $70 textbook, which costs about $22.50 to print. Percentage-wise that's not hugely different from what you get with a mass-market paperback.

(Go on to Why can't most publishers print books for $1? or Book distribution and printing cost too much. Why don't publishers switch to e-books?)

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The other day, I was in Barnes and Noble when I overheard a college student in the literature aisle say, "I'm not paying twenty bucks for this!" followed by the slap of an 80-page poetry collection being forcefully returned to the top of the shelves.

I'm sure we've all been feeling a bit of sticker shock at the bookstore, particularly if you are old enough to remember when pulp novels actually did cost just a dime.

So, why have new books gotten so damn expensive? Don't publishers realize they could sell a lot more paperbacks at $4 a pop than they can at $7 a pop?

The simple answer is, yes, they do, but the reality isn't simple. A book's pricing is based largely on how much it's costing the publisher to get into the readers' hands, and there's a lot that goes into that.

The basic formula goes like this:

author advance + design + printing + distribution + profit = price

At this point, you may be shaking your fist at the authors and muttering about how greedy they are. And I'm here to tell you that the author advance is often one of the smallest pieces of the book pricing pie. The advances offered by publishers to writers can vary hugely, as can the royalty percentages. But since I know what several mass market publishers generally pay and know their print runs, let's look at a theoretical mass market paperback publisher called Bighouse.

Most Bighouse paperbacks have a cover price of $6.99. An average Bighouse author may be offered an advance against royalties of $2500 and his or her book will have a print run of about 30,000. The publisher will hope that the book will actually sell about 25,000, and the rest of the copies will be stripped and returned¹. At 25,000 copies sold, Bighouse will have made back all their money from the advance, and they probably won't owe the author any more money (clauses stipulating the publisher's right to keep reserves against returns is a diabolical bit of contract evil that I'll address someday in another article).

So, regardless of the royalty percentage dictated in the author's contract (which will probably be around 7.5%), simple math tells us that in this case, about ten cents of every book sold goes toward paying the author's advance.

Ten cents. Whoa. That's not very much, is it? So that means that Bighouse is making a huge profit on every book, right?

Not exactly. There's the cost of editing the book, laying it out, proofreading the final copy, printing galleys, and paying for cover art and cover design, but since they're a big publisher and have full-time staff, this will cost them less per book than it would a small press publisher. I don't have hard numbers for this, but let's assume that it's about $2500 depending on how speedy the staff is. Either way, that's still not a big slice of the book pie.

Now comes printing time, and paper's much more expensive than it used to be. I've heard from a fairly reliable source that your average 350-page paperback costs about $2.25 per copy to print ... provided the books are ordered in batches of 30,000 or more. The per-copy price for small publishers, whether they go with an offset printer or a POD company, will be much higher, simply because they can't buy in volume. A certain amount of the printer's cost is purely the cost of setup, and that's the same price whether you're ordering 100 copies or 100,000.

So, from purchase to production to printing, a $6.99 paperback has cost the publisher about $2.50. Big profits time for the publisher, right? Only if they get to sell all their books directly from their own warehouse. And they don't: they need to send the books to distributors like Ingram so that the books get into bookstores.

And distributors like Ingram and Amazon.com generally want a 55% commission from the sale of every book they handle. Fifty-five percent, kids. Smaller bookstores may only ask for a 40% commission, but the big boys want 55%.

So, out of the $6.99 paid by a reader for the paperback at Amazon.com, $3.85 goes straight to Amazon. Once you subtract that and the direct production costs from the book, that leaves a whopping $0.64 "profit" per copy. If they've struck a deal and only have to pay a 40% commission, the "profit" rises to the kingly sum of $1.69 per copy.

But much of that $0.64-$1.69 isn't profit at all. Remember those 5,000 books that didn't sell? Those still had to be printed, and the publisher most often doesn't get them back. The bookstores rip the front covers off the unsold books, dump the books themselves in the trash, and mail the covers back to the publisher for credit. The book returns alone in this example would eat up $0.45 of the $0.64, leaving a mere 19-cents-per-book profit. And some portion of that 19 cents needs to be used to pay the other departments at the publishing house that aren't directly involved in production, such as the acquisitions department and the legal department, but most especially the marketing department.

After all, the marketing department is responsible for stuff like designing and placing ads and sending authors on book tours. They can make or break the book. I didn't include the book's marketing cost in the original equation because this is a very elastic cost for paperbacks. Sometimes a big publisher goes whole hog to promote a book, but sometimes they quietly release it to bookstores and let nature take its course.

Marketing costs take many more forms than paying an intern to set up author signings or paying designers to create the ads you see in magazines and newsletters. Do you ever stop to browse through the stacks of new releases placed prominently in the fronts of bookstores? That's not usually the staff sharing their new favorites; the publishers of those books pay to get their copies up front where people can see them.

If you want a number, though, possibly two to fifteen cents out of every dollar spent on the book (see below for statistics on textbook costs) goes toward marketing. But let's say that the publisher in this case has decided to back the print run with a bit of promotion, and they pay to get the book placed well for a week in stores and take out some magazine ads. The marketing budget takes up 50 cents per copy. And so if you subtract 45 cents for unsold copies and 50 cents for promotion from $1.69, the publisher gets $0.74 profit per book in a better-case scenario. But it could just as easily come to a $0.31 per book loss in the land of the 55% commission, or if there are a lot of unsold copies.

So in the end, it's the distribution costs that are the biggest expense of a paperback fiction book, followed by the cost of printing. No fiction publisher can refuse to deal with Amazon.com² or Ingram and expect to get their books into as many hands as possible, so they have to factor those big 40%-55% commissions into their book pricing.

(Go on to Part Two: Why new textbooks are so expensive, Part Three: Why can't most publishers print books for $1?, Part Four: Book distribution and printing cost too much. Why don't publishers switch to e-books?)

---

1: The number of copies printed and released versus the number of copies sold is called the "sell-through rate". An 80% sell-through rate -- that is, 80% of the released copies sell and 20% are returned -- on a mass market book is considered very good. Anything above 80% is awesome. I'm actually using an 83% sell-through rate in my example; most books will not sell that well, so the cost of paying back the author's advance would eat into the 64-cent profit outlined above.

And again, the 80%-as-excellent-sell-through applies to mass market books. Small press books with much smaller print runs may require sell-throughs of 90%-100% for the publisher to simply earn back the production and promotion costs. Or, a seemingly-unreasonable cover price: $20 for an 80-page poetry collection.

2: HW Press refused to deal with Amazon because of their commission rates. The publisher didn't want to bump the book price by $3 just to account for Amazon.com's cut. Selling on the web is selling on the web, right? But it's not. Amazon.com goes around the world and offers a bunch of discounts and incentives that a Mom-and-Pop distributor can't match. Amazon.com offers rewards credit cards, for instance, and was able to negotiate cheaper shipping costs for itself with the US Postal Service because they do such a high volume. Furthermore, LibraryThing and Bookcrossing and a host of other sites pull their data directly from Amazon's data, and if you're not in there, it's like your book simply doesn't exist for a certain number of potential readers. Amazon.com is the 15,000-pound gorilla in publishing. People look at you funny if you tell them that, no, you can't get the book on Amazon, even more than when you tell them they can't find your book down at the local Barnes and Noble, either.

And when you come down to it, Amazon.com's cut is not necessarily unbridled greed. They have warehouses to maintain and staff to pay. The free shipping you get with every $25-or-more order gets paid for out of their commission. I know one online bookstore, Shocklines, that only charged a 40% commission; the owner is having to close down the shop because he ended up doing too much business to keep up with on his own, but he could never quite make enough to hire an assistant. It's an expensive business.

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Liberty Books & News is a relatively new bookstore at The Shops on Lane Avenue (1649 West Lane Avenue) in Columbus, OH. If you are a reader, you seriously have to check this store out. It's got an excellent selection of both children's and grown-up's books, and it has the single best magazine section I've seen in town, hands-down. Not only do they carry Locus and the SFWA Journal, they have issues of The Journal of Irreproducible Results.

The comics section is much better than in most bookstores, but of course can't touch the offerings of the city's actual comic book shops, such as Midgard Comics (5541 Westerville Rd # 312g, Westerville, OH) or the Laughing Ogre (4258 N High St, Columbus, OH).

As added bonuses, Liberty Books & News has comfy chairs, free coffee, and offers author readings.

---

May 23, 2007 Update: Sadly, Liberty Books will be closing its doors soon.

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by Gary A. Braunbeck

There's a dark side writing that few people have dared address. I'm talking about the single most dangerous foe to the writer's resolve; the thing that can stop even the most dedicated wordsmith dead in his or her tracks; an element of the publishing business that renders all of us absolutely powerless when faced with it.

No, it isn't the dreaded book signing that finds you sitting at a table for 90 minutes, during which time the only person to approach you and the unsold stacks of your new book is someone asking for directions to the bathroom; it isn't having someone discover you're a horror writer and asking (almost as if compelled to do so by a Congressional Decree): "So, do you know Stephen King?"; and, no, it isn't that utterly radiant, mettle-testing moment when you open that first royalty statement to discover that your book has, in the course of one year, sold only one-third of its print run so obtaining that more pricey loaf of bread is going to have to be put on the back burner once again. Yes, all of these can test you, no doubt; they can chip away at your confidence if you let them; and they can make you a real buzz-kill who doesn't get invited to many parties, but I'm not here to discuss my dreadful personality problems.

No; the single biggest foe to the writer's resolve, confidence, and determination is (insert ominous chord here): the Horror of the Used Book Store.

We all shop at them. We're writers, for pity's sake, our major source of income is our writing (see Laura Anne Gilman's previous post to learn more of that particular daily terror), none of us can afford to shell out 30 bucks for each new hardcover or 8 bucks for each new paperback on a consistent basis. We go there to find a bargain, or perhaps to locate a book that's been hard to find or out of print for several years. While we're doing this, we remind ourselves that the First Sale Doctrine, codified in Section 109 of The U.S. Copyright Act, allows the original owner of any book to transfer ownership of the phyisical copy in any way they choose, so, technically, there's nothing legally or morally wrong with our purchasing any books here.

Besides (we tell ourselves), stores like this make books affordable to folks who otherwise wouldn't have the money to buy them. So it's all good ... until we find ourselves face to face with copies of our own books.

Don't shake your head at me; if you've ever published with a mass market house, odds are you've found yourself in this situation. And what is the writer's first reaction? But, my work is eternal, it speaks to the deepest pain of the human condition, my books are things to be treasured , to be passed down from generation to generation, not end up here!

The first time I discovered copies of my novel In Silent Graves on the shelf at a used book store, I felt a slight twinge of disappointment -- who wouldn't? We all hope that our books will be things that readers will want to keep around to read again someday, but here we are, faced with the bald hard truth that not everyone who buys and reads our books is going to want to keep them. I at least had the pleasure of knowing that the 3 copies I found on the shelf had been well-read, as evidenced by the wear on, and cracks in, the spines.

Two weeks ago, I'm in another used book store with a friend of mine who also happens to be a writer, and he points out to me that another copy of Graves is on the shelf. I'm really into this now, I've adopted a helathy attitude, I want to see how well-read the copy was, enjoy the sight of those cracks in the spine, hold it in my hands knowing that whoever had owned it before read the living shit out of it before selling it here.

Well, guess what? (Here's the moment that really tests the mettle.)

It hadn't been read. It hadn't even been opened, as far as I could tell. It still had the Walpurgis-Mart sticker covering the bar code on the back.

"What is it?" asked my writer friend.

"This hasn't even been read," I whispered.

"You don't know that," he replied. "maybe the person who sold this is like you, they take care not to damage the spine when they read a paperback. Maybe they're just very careful with their books."

"And maybe they just didn't read it." (Outwardly, I'm doing the Healthy Attitude Shuffle, I'm very calm and cool and collected; inwardly, I'm jumping up and down and throwing a fit and threatening to hold my breath until my face turns blue.)

"Okay," my writer friend said, "then you gotta tell yourself that there was some earth-shaking emergency that forced them to sell this book. They lost a job. They lost a limb. Their Workman's Comp ran out. They had to do it to put food on the table for their family, man! You know they had to do it to put food on the table! Dear God, why else would they part with one of your books? IT WAS A MATTER OF LIFE OR DEATH!"

"So what you're telling me in your own subtle way is that I'm over-reacting?"

"God, no! You're a hero, Gary, a lifesaver!" He threw his arm around my shoulder and began talking very loudly. "Because of you and your book, somewhere in this city tonight, a man's family is not going to bed hungry. They can afford Grandma's medication for another month. Little Eunice can get that knee surgery so that her dreams of the Joffrey Ballet needn't be forever buried, thus turning her into a bitter, empty shell of a human being before she turns 13! And it's all because of this book on this shelf. I'm sorry, I'm ... I'm getting emotional, tearing up. So moving, it is. I so rarely get to witness acts of decency and heroism. It reaffirms my faith in humanity. We must all hold hands," he cried out to the terror-stricken customers. "Indeed, we must all hold hands and sing out our joy at being here to mark this resplendent moment in human history. Come, sing with me, all of you: 'WHEN YOU WALK THROUGH A STORM, KEEP YOU HEAD HELD HIGH, AND DON'T BE AFRAID OF --'"

"So I'm over-reacting, is this what you're telling me?"

"Nah. They probably got through the first 20 pages and decided it was too much of a downer. You gotta admit, this thing ain't gonna make anybody's list of My Top Ten Favorite Chuckle-fests."

"I feel so much better now, thanks."

"Hey, take your pick: They did it to put food on the table, or they did it because they thought your book sucked the dimples off a golf ball through 40 feet of clogged garden hose."

We're writers, we exist because of fantasy and delusion and our ability to convey them on the page. And when you have to rely on your writing as your major source of income, any delusion helps, especially if you know it's a delusion.

So I helped a stranger put food on the table for his family. I feel good about myself.

Hey, I'm a writer. Delusion is my business.

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I found Yellow Springs to be a very pleasant, very arty little community. It has about 4,600 residents and is home to Antioch College. Apartment rental and real estate prices are on the high side because so many people working in Dayton want to live in Yellow Springs.

It's also the home-away-from-Hollywood for popular comedian Dave Chappelle, who was spotted there after his 2005 nervous breakdown and flight to South Africa.

The village really reminded me a lot of parts of Bloomington, IN and Portland, Oregon. (Presumably, it would remind me even more of Eugene, Oregon, another city that has been accused of being stuck in the sixties, but I have not been there yet.)

While we were there, we stayed at the Morgan House Bed and Breakfast, which is within walking distance of practically everything you'd want to visit in the town. The location is the major advantage to Morgan House; while it is far less expensive than most B&Bs, it's not ideal if you're looking for a getaway with your significant other. The rooms don't have private bathrooms, and the accomodations are more rustic than romantic. You also can't lock your room when you leave, and although I was assured my belongings would be safe, I still found it a bit offputting.

Yellow Springs' downtown is nice, but it's small, and the village rolls up its sidewalks fairly early; if you're out and about after 8 p.m., the only food you'll be able to find is at the Sunrise Cafe, which looks from the outside like it might be a greasy-spoon type diner but which is a more formal restaurant inside. The food there is good, but perhaps a tad overpriced.

If you're willing to drive a bit north out of town, a very good place to eat (if you're a carnivore) is Young's Jersey Dairy. They offer excellent burgers and real fountain Coca-Cola made with syrup and soda water that taste much better than the bottled kind. The food is fresh and inexpensive.

If you're a book lover, you should check out Dark Star Books while you're there. The front of the shop has a very decent collection of comics and anime; my first impression was that this was entirely a science fiction book shop, but when I went toward the back of the store, I realized most of their stock is used books on a wide variety of subjects.

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Many of us remember the ultra-plainly-labeled, über-cheap generic foods sold in bulk at grocery stores a few decades back. Stuff like bulk beer, which came in plain white cans with just the word "BEER" in stark black letters, plus minimal nutrition information and a bar code.

Fewer people remember that, for a very brief period of time in the white-label heyday of the early 1980s, someone attempted to market generic genre books.

Yes, completely generic paperback books. They had a plain white cover with just the title in black block lettering: ROMANCE or SCIENCE FICTION or HORROR or WESTERN.

They released one book in each genre; an older friend of mine collected the whole set. The books had no back-panel blurb, no author information, no publisher information, not even a copyright page.

My friend said the novels were uniformly awful, but entertainingly so. Apparently the writer or writers went out of their way to incorporate every possible genre cliché into the paper-thin storylines.

I'm guessing the white-label SCIENCE FICTION novel had a bad case of white room syndrome.

The books, of course, failed miserably except as a collector's oddity for bibliophiles. It's hard to get authors to do good work when they're not even given a pseudonym, and it's even harder to get readers to pick up a book without the benefit of snazzy cover art, a catchy title, or author name recognition. And, of course, without publisher information attached to the product, there's not much possible motive or method to marketing.

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