We use two criteria for determining whether we will offer a publication contract for a manuscript. The first is the quality of the manuscript: is it a well written manuscript that will entertain our readers or contains information that should be shared? For a publisher this must always be the first criteria. The second is whether we can produce the book at a profit. This should not come as a big surprise to anyone; publishing is a business, and businesses that are not profitable tend to go out of business.
In my last blog on word count, I show that using print-on-demand (POD) to publish a 450 page book (which costs $6.75 per copy to print using POD) will probably not be profitable for a genre where the average paperback book price is $15. The obvious question at this point is why not use offset printing? Most people will tell you that printing costs tend to be twice as much using POD and that most publishers use offset printing so that books can be sold in bookstores. But is offset printing really the best way to print books? Consider the following facts:
- An offset print run of 1,500 copies for a 450 page book costs $5,160, or $3.44 per book (about half the price of POD printing). One would need to print 5,000 copies using offset printing to get the price down to $2.05 per book.
- The average book in the US sells 500 copies (Publisher’s Weekly, July 17, 2006) and only 1 in 10 books are successful.
- The discount given to bookstores is 40% of list. Net sales (the amount of money the publisher receives) is 60% of list
Assuming that the book in question has a list price of $15 (which seems to be the average for mystery & thriller paperbacks), your net sales per book are $9.00. Thus, if you sell the average number of books (500) your net sales are $4,500, or $660 less than the cost of the offset print run. If you also use a distributor (most charge up to 15% of list in addition to the retailer discount), your net can be as much as as $1,785 less than the cost of printing. Most important, if you only sell 500 books your actual printing cost per book sold (total cost of the offset print run divided by number of books sold) is $10.32 per book, which is $3.57 more per book than using POD. Thus, the possibility exists that you will actually pay more per book sold using offset printing than you would have using POD if the book does not sell well.
If you include author royalties, editing and cover design (estimated at 25% of net in my last blog), you would need to sell 765 copies of this book (or 51% of the books printed) to break even if you do an offset print run of 1,500 copies. Is it possible to sell this many books? Of course it is – people wouldn’t get into publishing if it wasn’t. But the point of this article is that, given the low success rate for books, you are just as likely to lose the investment you’ve made on that offset print run.
Someone recently asked me what the break even for our short story collections was. For Damn Faeries, our break even was 91 copies sold using POD. This includes in the fixed costs the one-time payments made to the authors for use of the stories. My break even for Damn Faeries would have been 369 copies, or over 4 times the number of books sold, using an offset print run of 1,500 copies. Quite frankly, the reason we feel comfortable doing short story collections (which are never big sellers) is that we are able to minimize the risk associated with printing costs and returns using POD.
As a publisher, the choice is yours. You can assume the additional risk associated with offset print runs and make more money per book (assuming you reach break even) or you can make less profit per book but also assume less risk using POD. Caveat Emptor.