Quote:
Originally Posted by Daithi
I'd be interested to see what the financials really are in regards to a typical new hardback book. Is Amazon really losing money on ebooks they sell at $9.99? How much does a hardback actually make after you deduct the cost of printing, distribution, and the discount from unsold books returned to the publisher? What is the author's percentage?
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I can't give you exact figures, each publisher is different. But I ran a publishing company (and I'm still involved in publishing), so I can give you some generalizations.
1. Amazon is losing money on the $9.99 bestsellers. Books are "sold" to retailers with a percentage discount based on the listed retail price. The discount is generally 50 to 55 percent. Even with a 60 percent discount, Amazon would need to pay the publisher $10.38 on a book that has a suggested retail price of $25.95. Probably the breakeven point is a suggested retail price of $19.95, but few new bestsellers in hardcover have such a price point.
Why this question keeps surfacing, I do not understand. The publishers themselves have said that Amazon is taking a loss and none of the analysts have disputed this. Seems to me that that this question should be laid to rest permanently.
2. How much does a hardback make? That depends on a lot of factors, not least of which is the print run -- the larger the print run, the lower the print cost. A Harry Potter book that probably made the publisher $5 or more dollars per book
after all costs. Books with small print runs make comparatively less. One unknown in the equation is the number of books remaindered. Remaindered books are generally a loss for a publisher. The profit margin on a hardcover is much greater than that on a paperback. It is like with automobiles. The SUVs are high margin profitmakers whereas the small compacts are very low margin.
3. Author royalty percentages are based on the value of the author. Stephen King and JK Rowling command significantly higher roylaties than John Unknown. However, the range generally begins at 8 to 10 percent. It also matters how the royalties are structured. Some royalties are based on suggested price, some on wholesale price, some on other bases.