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Old 12-06-2009, 06:40 PM   #12
DMcCunney
New York Editor
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Quote:
Originally Posted by Leep View Post
If a paperbook sells for $25 which includes paper, cover, printing, shipping, overstock and point of purchase personnel and an ebook sells for $9.99, how can they possibly be losing money on the ebook which is on demand and only uses an existing website?
Easy: what did the ebook cost to produce?

Having a book in electronic format cuts manufacturing, warehousing, and distribution costs. It does not reduce the cost to acquire and produce the book in the first place, and those can be substantial.

When a book is published, it must first be acquired. An editor will read a manuscript, decide the book has potential, and choose to buy it. The publisher will negotiate with the author or author's agent and if successful, will agree on a price to license the right to publish the book. The price will be paid as an advance against royalties, and how large the advance is will be determined by the publisher's best guess of how well the book will sell. If the book sells enough copies to cover the advance, it is said to have "earned out", and further sales will generate royalties for the author as specified in the contract.

Once a manuscript has been acquired, it must be prepared for production, including line edits by an editor intended to improve the overall quality of the manuscript, and copy editing and proofreading. Once a final form of the manuscript has been agreed upon, it must be marked up and typeset to produce the files which will go to the printer and/or become an ebook. And a cover must be designed and commissioned.

The book will also be charged with an allocated share of general corporate overhead: rent on office space, telephone bills, utilities, salaries of other publishing house employees not directly involved in acquiring and publishing the book...all of which are incurred whether or not the book ever gets issued, in paper or electronic form.

The mere fact that it's an ebook doesn't make those costs go away, and the amount it costs to acquire and prepare the book will tend to set a lower limit on the price that will be charged. Pricing cheap and making it up on volume only works if there is significant volume for a particular title, and price is only one factor in demand.

Some books will sell better than others. A new Dan Browne book may be confidently expected to sell hundreds of thousands of copies. A first novel by a new author may be confidently expect to sell a few thousand copies, if all concerned are lucky, and if all concerned are really lucky, sell enough to make the publisher receptive to acquiring future books from the author.

Being in electronic form won't magically that first novel a big seller, nor will a cheaper price. The book is competing not only for your dollars, but for your time, and if it's not a book you want to read, it doesn't matter what the price is.
______
Dennis

Last edited by DMcCunney; 12-09-2009 at 03:40 PM.
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