It might seem like a simple equation. Take the cost of producing a book (or any product really) and add the profit you want…Ta! Da! You have your price. However, it doesn’t work that way.
Of course, you must look at that margin and know what it is. But let’s say that would make your book $10, but on average books in that category sell for $15. Trust me, you might bargain price your book at $14, but you’re not going to sell at $10.
On the other hand, the “cost plus” price might be $30 and the average selling price in the category is $10. Then, no matter how lovely the book is, you’re not going to publish it.
Sometimes, companies have “loss leaders” — product that either doesn’t make money or loses money, just to get people in the door. Retail stores do it fairly often, and publishers might contribute to the cost of it through extra discount or coop dollars.
And occaisionally a publisher will do a book because they believe it to be important and accepts that profits might be very small or take a very long time to materialize.
Pricing is a very big issue in the self-publishing world. In general, the smaller the print run, the more expensive the book. But if your cute 6 x 6 board book costs you $20 to print, you’re not going to sell very many outside your family and friends.
I hear this discussed among independent booksellers a lot. Most of the self-published books presented to them aren’t very good. But even when they see a book they really like, it’s usually overpriced — as much and two to three times the average price for similar books in the store.
This is why booksellers usually have very clear policies in regards to self-published books. They buy on consignment. The author often needs to be local. And they might even require the author to sponsor an event. In other words, pay for or execute the publicity for the booksigning.
Interestingly, when I do hear about a self-published book doing well in a store, it’s usually a very local or regional interst book. Perhaps this is the best use of the self-publishing model.