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What discounts to offer for self-published POD books

Guest post by Maggie Lynch.

 

In an Authors Guild discussion group, author Maggie Lynch provided an excellent explanation for self-published authors who want to know how to work with wholesalers. I reprint it below with Maggie's permission.

 

It's important to understand critical information about WHO are wholesalers and their role (e.g., Ingram is a wholesaler who takes 15% of retail price of every book they print on demand). They also fail to disclose how the discounts really pass down to bookstores. Finally, they make it sound like you get to choose one discount for online retailers and a different discount for small bookshops. Not true. You choose one discount. Period with a print-on-demand (POD) vendor (e.g., Ingram Spark).

Which Companies Are Wholesalers?
Ingram is one. As I said they take 15% of retail.
Amazon is another one for those who go to Amazon direct via KDP print. They take 40% of retail.
Gardners in the UK is another one. They distribute to smaller bookstores and to libraries.
These are just the major ones, but there are hundreds of smaller ones as well. Every one of them takes some percentage of retail, usually in the 10-15% range.


What Do Bookstores Actually Get the Book for When They Order from Ingram?
Let me share a story of local bookstores in the Portland, Oregon area where I've done a number of events and know the owners. The story of what the bookstores get depends on where the book originates (Amazon, Ingram, another indie printer such as Lulu, Xlibris, BookBaby, etc.).


Originates with Amazon and is printed by Ingram
You set discount at 60%, the only option with Amazon POD
Amazon takes 40%
Ingram takes 15%
Bookstore orders book and has only a 10% discount not including shipping.
     NOTE: Most bookstores won't order from Amazon direct (a few do).


Originates with Ingram Spark
You set discount at 55%, the recommended discount with Ingram POD.
Ingram takes 15%
Bookstore orders book and gets a 40% discount. Most bookstores have an agreement with Ingram to get free shipping if they order 10+ books (not necessarily all the same book).
     NOTE: This discount is traditionally what bookstores expect and they have the room to discount the book in the store if they wish and still make a profit. Three small bookstore owners I've spoken with told me they traditionally discount a new release 20% in order to compete with Amazon. That leaves only 20% for them to pay their overhead costs and realize a profit.

Three Notes of How I Handle Discounting and Pricing for POD


I always choose the 55% discount at Ingram Spark for the reasons above. I support small bookstores and libraries and I value what they do to serve the public.
I do upload to Amazon direct for print, but I DO NOT select expanded distribution because Ingram is handling that for me. That makes my print book available on all Amazon sites with a 60% royalty to me (minus the cost to print the book). I upload to Ingram for everyone except Amazon. I choose the 55% discount. Ingram makes my book available to wholesalers, retailers, small and large bookstores both online and in person, as well as libraries anywhere in the world they distribute.

     I price my Amazon book and my Ingram book exactly the same. If it is $14.99 at Ingram, it is also $14.99 at Amazon. Some people price the Amazon book lower because they are getting a higher royalty and they want to compete with traditional books. IMO this is a mistake because they are, in effect, negating the purchase of the book at any small bookshops and driving traffic to their book on Amazon. You might as well not load to Ingram if that is what you are going to do. I price the same for both. Sure, I make more if someone buys on Amazon than from some other online or local retailer. But I push local bookstores as much as I can because I actually have a higher reach with them.

     Bookshop owners have told me how, in the past five years, they've watched potential customers come in the store, look at the books on the shelf and then immediately call up Amazon to see if they can get it for less. If so, they leave the store and purchase it online. It makes me very sad that some people put no value in the services of their local bookstore.

For more information about Maggie's business helping authors self-publish their books, see POV Author Services.

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