In regard to these cost-of-print financial models ... the thing I think they usually ignore is the fact that you would almost never produce exactly the number of books you need.
If you don't print enough, you have lost sales that need to be included in the finances. If you print too many, you have wasted books and carrying costs that need to be included.
I think the flexibility that ebooks gives you is one of its key features. Furthermore, the fixed costs of setup goes down if you use ebook only. You could ideally start a low-cost line that had less production costs, but that needed to sell fewer volumes to break even. Say a recognized publishing name brand, but with generic covers, no ARCs, only one editing pass (not as thorough) etcetera. These 'penguin-lite' books wouldn't promise the same quality.
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