Why waste my money when I know I can get much better content at a lower cost (free) by reading blogs and fanfiction? You can keep raising prices as high as you like, there’s nothing that says I need to pay them.

Colin (Oct 27th, 2009 @ 5:28pm) asks how much it costs to print a book. Well, the short answer is, about as much as it costs to print a newspaper or magazine. Both kinds of printing use substantially similar machines to perform substantially similar processes, such as printing sheets of paper, and folding them, and, in the case of magazines, “perfect” binding, etc. The main difference is that most book titles are printed in vastly smaller quantities (5000 or less), and have correspondingly higher fixed overheads. Economically viable magazines have circulations of 50,000 and up, and the same goes for newspapers. The big “drug store magazines” tend to have circulations in the range of one or two million. When you are talking about best-selling authors, whose books are also sold in drugstores, their economics are very much the same as those of magazines. The books don’t rely on advertising, so they could sell for maybe twice as much as a magazine of comparable thickness. Bear in mind that the magazine’s normal price is the subscription price, not the cover price, and is typically about a dollar an issue.

The marginal cost of printing an additional hardcover book during a print run, and shipping an additional copy to a customer or a retailer, or a distributor, as the case may be, is extremely low, typically less than a dollar. There is essentially no hand-labor in the book manufacturing process. In the case of a best-seller, the costs of copy-editing, pre-production and set-up are distributed over a sufficiently large number of copies that the per-copy share is only a penny or so, the same as they would be for a newspaper, or a telephone book. The author’s royalty is of course based on the list price, say 10% of $25.00, or $2.50. That said, the publisher can probably make a marginal profit on sufficiently large orders at anything above $3.50, and considerably less if the author agrees to make concessions about royalties in exchange for volume (eg. a paperback deal, or remaindering, where the author might accept only fifty cents per book).

The publishers are not giving special privileges to Wal-Mart. They are simply saying that if you buy books by the truckload of each title, you can have them for something like five percent above actual costs, viz. paper, ink, and the author’s royalty– mostly the latter. Wal-Mart, in turn, believes in selling things for about five or ten percent above cost– and doing quite a thorough job of driving its own internal handling costs down. To have any kind of anti-dumping case, the price of a hardcover best-seller would have to be less than four dollars or so, and maybe one dollar for a paperback.

Wal-Mart already has a mail-order book operation, partially modeled after Amazon. However, thus far, it has not handled used books. For a super-bookseller, such as Amazon, the used-book operation is quite important. It provides a means to discipline publishers of “‘backlist” books. The bookseller can say, in effect, either sell us new copies on advantageous terms, or better still, participate in our print-on-demand and e-book systems, or else we will sell the customer a used copy, and you will get nothing. Amazon’s used-book operation is still only moderately efficient from an industrial standpoint. It could be improved considerably, with more automation, and more outsourcing of cataloging to India, and could probably get its costs down to a dollar a book. Well, presumably Wal-Mart will step up the pace somewhat, and Amazon will have to match them.

Once you have print-on-demand in place, of course, with a sufficiently large number publishers participating, a little kiosk can sell essentially everything.

1. Indy stores generally don’t cater to the Grisham crowd because those books can be bought anywhere, so how Wal-mart prices them is irrelevant.

2. It’s rich that Gernert is harping about $10 books. It was Grisham, thanks to his staggering advances, who pioneered the $7.99, then $8.99, then (wait for it) $9.99 mass market paperback. His agent doesn’t want prices to drop because then Grisham’s advances will have to drop.

3. If the new Grisham sells like Painted House (1,000,000+ sales according to Bookscan), then a 1.25 million first print would cost $.69 per unit, and 1.5 million first print would cost $.68. The actual costs will be higher because the first print won’t be that high, not in this economy, and those earlier sales were likely the result of multiple reprints, which would be more expensive, but you get the picture.

Stephen King sells between 400-500,000 copies in hardcover. His new book, substantially larger than Grisham’s, would cost $2.33 a unit for a 400,000 print and $2.31 at 500,000 copies.

ELAINE KURTENBACH, AP Business Writer, “Companies brace for end of cheap made-in-China era”

http://www.gmanews.tv/story/195603/companies-brace-for-end-of-cheap-made-in-china-era

says: “Printing a 9-by-9-inch, 334-page hardcover book in China costs about 44 to 45 cents now, with another 3 cents for shipping, says Goodwin. The same book costs 65 to 68 cents to make in the U.S.”

Hat Tip: Tioe Dong, on History News Network.

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