This is the first post I made on this blog. I still really like its topic, and since I am still away for training, I wanted resurrect it from the archives. I hope you are having a wonderful day and I can’t wait to get back.
After the back blurb, the price of a novel is the second thing that I look at once its cover catches my eye. If the price is set to high then I will likely put it down. If it’s priced to low then the author can make little to no money on their product despite the countless hours that they poured into it. Using some basic business skills that I picked up when I studied Business Management at Western Illinois University, we can create a plan in order to help indie authors price their work.
The two factors that create a price are expenses and profit margin. A general rule is to try to double an investment. If it costs $5 to create a book then the seller would want to charge $10 to cover their initial investment and make a high enough profit for it to be worth their time. The tricky part to figuring out what the price of a book should be is accurately tracking the expenses. Beyond printing costs, there are editing fees, cover design, marketing, as well as the value of time that is spent writing.
If you are still reading then I am assuming you have some piece of literature that you want help pricing. First you need to reasonably project how many books that you can sell. If you can sell more than 2000 copies on your own, there is a chance that a publishing house will start to become interested in your work. This post is intended for indie authors so we will try to shoot a little lower than 2000. Let’s say that you think you can sell 1000 copies over the life of this book. Here are some ballpark numbers to illustrate how to find a price.
- Print Cost for a 300 page 6”x9” paperback on Createspace: $4.45/book
- Comprehensive Edit at Two Brothers Press for 100000 words: $1800
- Average price for Custom Cover Design: $800
- Facebook Ad Campaign for 31 days: $500
Not including the printing cost, it will take roughly $3100 to give your novel the publishing services that would be seen from a traditional publisher. Since we were planning on selling 1000 copies, you need to divide the total publishing cost by the number of the projected sales.
$3100 (Total Publishing Cost)/1000 (number of books)= $3.10
Now you need to add the publishing cost to the printing cost in order to find the expense/book.
$3.10 (Publishing Cost) + $4.45 (Print Cost) = $7.55
The last piece is how much do you want to charge for writing the book. This would be similar to the royalties that an author at a traditional publishing house receives. It does not matter if you sell your book at a discount or at full price, you will always earn this amount on every sale. Royalties are usually between 10-15% of the MSRP. Let’s say that you plan on selling this book for around $20, a 12% royalty would be $2.40. This gives us the wholesale price.
$7.55 (Expense/Book) + $2.40 (12% author royalty) = $9.95
If you choose to sell your book to a bookstore, you should charge them your wholesale price. It is up to you if they need to buy five, ten, or even a single copy to take advantage of the wholesale price.
Once you have wholesale value of your product, use the general rule of business of doubling your investment in order to find your MSRP. Take the wholesale price and multiple it by two for your retail price.