[pwalker8]

Originally Posted by darryl

That's certainly not my understanding and it seems to be counter-intuitive. Perhaps there is someone here with more knowledge of the industry who can comment.

See, for instance:

http://www.macgregorliterary.com/blo...e-doesnt-earn/

Why do you think that it's counter intuitive?

Thanks for the link, but keep in mind that when MacGregor, a literary agent, talks about not earning out and the publisher still making a profit, he's talking about the big sellers. He's not talking about the average author who sells 3,000 books, or even the above average author who might sell 10,000 books. He's also talking hard back prices, rather than paper back prices. Do the math. If the overhead is $50,000 and he assigns $2 per book, he's assuming that the publisher will sell at least 25,000 copies. If you sell 3000 books, the the overhead is actually $16 per book, which is more than what the book sells for.