Book Economics - Factors Influencing the Selling Price

“You write so well. I will buy any book you publish.” Don’t fall for that line when estimating the number of printed copies you want to issue in the market, especially if you are a first-time author.? Your primary network is your core target market, but you might be surprised that only 5-10% or less buys your book. People may decide not to buy your book due to financial challenges or the fact that they have secretly wished to publish a book for years and haven’t hacked it while you appeared to achieve that feat with relative ease. Access and distribution challenges could also deter your potential audience. Some readers may hesitate to invest in an unknown author, fearing poor quality, even though they are familiar with your writing style. This is fair as authors, too, could be deluded that their work is the best when the fan base thinks otherwise.

An author is, therefore, advised to use conservative numbers when issuing a book in a market. He or she should treat publishing as a business venture, even if writing for fun. As a first-time author, you would most likely have to invest in production costs towards launching your book. There are exceptions where notable persons in society or celebrities get sponsored for their works as their vast fan base guarantees a scale market. Most upcoming authors, however, don't have that luxury and have to be prudent on their route to market and budget implications versus return on investment. The following costs should be considered when deciding the selling price of a book.

Capital Costs of Book Production

A. Pre-Production Costs

These include:

·?????? Editing and Proofreading:?This entails professional editing to refine your manuscript and proofreading to catch errors before publishing. Different publishers adopt diverse cost structures. Examples include $0.01-$0.05 per word for basic proofreading; this cost could go up if combined with editorial work. Some editors charge per hour ($30-$100) depending on their expertise while some will charge you per cluster of words (e.g., $80 per 1000 words copyedited and proofread). Some publishing firms/editors would also give you a rounded figure like $2000-$3000 for editing and proofreading. ?The cost could be higher for non-fiction books, depending on the subject matter being addressed that needs extensive fact-checking for accuracy. Some first-time authors opt to work with upcoming editors to try and reduce the costs of the book, while others do the editing themselves.

·?????? Cover Design:?Covers the cost of hiring a graphic designer to create a visually appealing book cover. Most publishing houses will give you a quotation for the paperback version and the hardcover version for fiction and non-fiction books. The costs could range from $500 to $3000 depending on the complexity of the graphics needed on the cover, which designer they are using, and also the size of your book (length and width). Take note, however, that most printers compromise on the quality and the more intricate the cover design, the chances are that you may not like the final outcome of the printed version. If self-publishing, some platforms offer basic cover design while some authors invest in software to enable them to design the cover themselves while aligning to the book measurements.

·?????? Typesetting:?This cost includes the interior formatting of your manuscript to meet publishing standards for layout and typography. Just like editorial costs, the cost of this varies with different approaches to pricing. Some publishers might charge you $8-$25 per page for fiction and non-fiction $40 per page or above. The cost ranges if you have illustrations, graphics, or process diagrams in the book. Some publishers will also choose to give you a ballpark figure based on the genre and size of the book and desired dimensions. Some first-time authors choose to invest in software where they can do the typesetting themselves or pay upcoming typesetters to work with them. The budget available is a determining factor.

·?????? ISBN Registration:?Obtaining an International Standard Book Number to identify your book. Most self-publishing sites if you opt to use their cover design facility, will also assign you their ISBN and not charge for it. So why should an author pay locally for an ISBN? Governments strive to track creative works coming from their nationals. Usually, they work with the National Library Service to issue an ISBN. ?Some governments require payment for that number while others avail the service for free. If you pay for this number, you should factor it as part of the production costs. Depending on your publishing needs, you can either buy a singular ISBN or batches of ISBN projected to the volumes you want to issue. For most, it’s a one-off cost, but some governments also require a new payment to be made when a book surpasses a certain distribution mark in the market.

·?????? Legal Consultation (if needed):?You may need to consult with a lawyer regarding copyright and publishing agreements. A book undergoes different iterations and so, at the production stage, many hands have access to it and chances of copyright infringement are real if your work resonates with the market or the industry. An editor assigned to work on your book could also walk away with the ideas. Some publishers have been sued over copyright infringements. You might not be overly concerned about your first book but if you are aiming to publish more in the future, you should invest in a good lawyer. Most self-publishing sites already embed copyright and related rights for all markets, so this may not be a big deal for authors using the service.

·?????? Taxation:?Factor in government taxes for literary works. This applies whether you are printing through traditional publishers or using self-publishing sites. The Kenyan government, for example, charges 16% VAT on the entire production process, and this sum is deducted even before you launch a book in the market/there is no guarantee you will recover the costs. Self-publishing sites automatically mark up the taxes for respective governments and withhold the tax.

B. Production Costs

These include

·?????? Printing Costs:?Depending on the book size, paper quality, diagrams and illustrations, coloured or black and white, number of copies printed etc; the author will be charged printing costs per page.

·?????? Distribution Fees:?These are associated with selling your book through online retailers or physical bookstores. Most established bookstores either mark up 30-40% of your book price or take the equivalent amount from the cost per book that you set up. Some even charge as high as 50%. It's why first-time authors end up selling their books expensively because the capital costs are high and the book runs low so the economics of scale doesn’t work at the initial stages of launching a career in writing. The markup by bookshops is to recover their operational costs including staffing and rent.

C. Marketing and Promotion Costs

·?????? Book Marketing Strategy Development:?Creating a plan and budget to reach your target audience. The author will have to decide which channels to address.

·?????? Online Advertising:?Paid advertising on social media platforms or search engines -most of them charge per click and depending on the volume and traction, that charge can progressively increase as it shows their marketing is working

·?????? Website and Author Platform Development:?Creating a dedicated website to promote your book. You need to pay for a domain, and maybe a web designer or you can opt to design one yourself but you still need to pay for the domain and hosting services including security encryption

·?????? Book Tours or Events:?Organizing book signings or appearances?- especially if you have opted to distribute your book via bookstores. The physical presence is a good boost but the author also needs to invest in advertising for the event.

Factors Influencing Costs:

• Book Length:?Longer books generally require more editing and printing costs
• Genre:?Some genres might require specialized design or marketing approaches. They may also need the use of high gloss printing and larger size books that would cost more
• Publishing Route:?Traditional publishing may involve higher upfront costs for you but potentially smaller royalties/these royalties can increase if more books are progressively put in the market, while self-publishing gives you more control but requires managing all aspects of production and marketing

?Author's Earnings

First time authors if publishing a printed version are advised to start with fewer copies – most publishing firms will set the minimum at 500 copies. It's therefore technical for an author to earn royalty given the steep production costs.? An author could decide to recoup their capital costs only with the first market entry as they strive to make a name. Some authors decide on a paltry 0.5-1% of the book price while other authors hit back and state if everyone else is making steep monies from the author throughout the production cycle, why not align with the industry standard of 10-15% per book price? ?The author will have to assess the opportunity costs of launching in a market versus making a book affordable. Some bookstores and publishers are also notorious for not submitting royalties to the author. Before you sign up for local publishers, check the royalty cases in the court system so you can make a wise decision. Self-publishing sites are more transparent on the royalty but some may not have a remittance structure to your country making payment of royalty difficult.

?Key Takeaways

Whatever route you choose, traditional, self-published or hybrid, there are costs involved and you have to brace for them. For your primary network who cheer you but don’t buy a book, don’t loose sleep over it. At the bare minimum, they inspired you and gave you the courage to publish else you would have been procrastinating for life.

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