After you've spent the time and money to edit, design, and market your book, the thought of selling it at a discounted price may seem counterintuitive. However, offering a discount is an excellent way to expand your reach in the book distribution channels. Discounting your book can help get it picked up by retailers. Here's how.
Before you can determine how much to discount your book, you need to consider your ideal sales channels. Will you make it available online, in physical stores, or both? Do you plan to make it available in libraries, chain stores, indie bookstores, or all of the above? Your discount will depend on how and where you want your book to be available. IngramSpark allows you flexibility in setting your discount at the time of title setup, but you still need to understand how book discounts work.
What is a Wholesale Discount?
The wholesale discount you set determines how much a wholesaler will actually pay for your book. Wholesalers include online retailers like Amazon, as well as brick-and-mortar retailers like Barnes & Noble and Costco. They sell your book at list price. The difference between the two is their compensation, or profit. If they can't make a profit from selling your book, they won't buy it.
Many authors think that the only way to get their book into bookstores is through the traditional publishing path—this is hardly the case. Many bookstores are more than happy to support local authors. All you have to do is ask. However, most bookstores will not be willing to buy your book directly from you. It's more likely that they'll want it to come from a distributor, like Ingram, from which they order all of their other books. Selling your book with a wholesale discount and making it returnable via a book distributor is a good way to get your book on bookstore shelves.
It might seem counterintuitive to discount your book—but consider what you are getting in return. IngramSpark's distribution channels include more than 39,000 retailers and libraries. When you take advantage of these sales channels, they become part of your sales force. They can give your book the kind of exposure that would be impossible for you to achieve on your own. You'll do better selling 2,000 books at a discount through major distribution channels than you would selling 200 at list price on your own.
Taking on the Competition
1. Traditional publishers: Traditional publishing houses, like Penguin Random House, offer retailers a discount so the retailer can make a profit. In order to compete for shelf space, you must also offer a discount. If you don't want your title rejected by retailers, set your book up with a competitive wholesale discount and offer returns.
2. Other self-publishers: Not all self-publishers understand why they should offer wholesale discounts, so they don't. The savvy indie author, like you, is already beating out tens of thousands of other self-publishers just by knowing the necessity of offering these discounts. This knowledge puts you on the same playing field as major traditional publishers.
Having a wholesale discount lends you credibility and professionalism as you market your book to retailers. Because having this discount makes you competitive with traditional publishing houses, retailers will see that you know what you're doing and will be more likely to do business with you.
What Wholesale Discount Should I Offer Bookstores?
The trade discount most publishers choose to offer booksellers is 55%. IngramSpark provides the option of setting a discount within the range of 30-35% (minimum) to 55% (maximum). Applying a discount less than 55% can possibly limit the sale of your title to booksellers; however, this may be the right choice for you depending on your author goals and marketing strategies.
Let's walk through an example: If your book is 6x9, black-and-white, 150-page, paperback book is priced at $15 and you set a 55% wholesale discount, the wholesale price of the book will be $6.75.
$15 list price - ($15 X 55% discount) = $6.75 wholesale price
The wholesale price is the amount the bookstore will pay for the book. A wholesaler will keep a portion of that discount and pass along the rest to the bookstores ordering the book, and retailers may pass along a discount to the end consumer (for example: the retailer may sell your $15 book for $12.99 in their store). The cost to print your book (based on format choices you've made such as hardcover or paperback, black-and-white or premium color, page count, etc.) will be deducted from the $6.75 wholesale price, and you will be paid what is left over as your publisher earnings on that sale. (To continue with our 6x9, black-and-white, 150-page, paperback example, the price to print a book with those specifications would be $2.97, meaning you get paid $3.78 for every book sold after all is said and done.)
You may be thinking, "Hey, why would I set a wholesale discount that enables the bookstore to make more money than me on the sale?" but consider how many sales you might not achieve without the help of retailers. If you have your own e-commerce and fulfillment methods and an unlimited fan base that you know will purchase from you without fail, then offering a higher wholesale discount may not be necessary for you. The minimum wholesale discount you can offer with IngramSpark is 30% (35% in international markets). But majority of the readers visit their local bookstore or online retailer than will visit your author website or hand you cash for a copy, so you have to consider what that exposure is worth to you, and where you do that is your wholesale discount.
You promote your book and let people know what retailers they can purchase it from. The retailers handle the inventory, ordering, and selling of your book so that you can make what may end up being $3.78 on your $15.00 book—but it may be $3.78 you wouldn't have earned otherwise. And if your book sells through stores, the stores may place more orders, and multiple $3.78 sales could end up equaling more than the handful of $15.00 sales you may get if you try to do it all on your own.
If you think you'll offer a bookstore a 30% wholesale discount so that you get more and they get less, consider how many books they're asked to carry and how limited their shelf space is. A 30% wholesale discount is considered a short discount and is not typically a big enough incentive for a bookstore to purchase your book over another with a standard trade discount of 55%.
Do Online Retailers Need a High Discount?
Online retailers differ from physical retailers in that the end sale is to the reader. Because online retailers don't need physical inventory of your book in order to sell it, when they order your book from Ingram, the final sale (to the reader) has already been made, eliminating the risk involved in the online retailer's purchase of your book. Physical bookstores take risks when they buy your book; it might not sell when they stock it on their shelves and it's taking up valuable space that might be better served by a different title. You should still discount the title to online retailers as is standard industry practice, but you can get away with a shorter discount than you would offer a physical retail store.
How Does the Discount Work on Books Ordered by the Publisher?
When you (the publisher) order your book yourself, there is no discount involved. With these publisher-direct orders, you pay printing and shipping. For example, if you're hosting a book signing, you might order 50 copies of your book to have on hand for the event and sell the book to attendees at list price. Your profit is the difference between the price you paid for printing and shipping, and the price individuals pay for your book at the signing. Using our paperback example from above, it would cost $148 to print 50 copies (plus shipping to wherever you're located). If you sold all 50 copies at your $15 list price, that would be $750 revenue minus $148 to print (plus shipping) and what's left over is your profit. Or perhaps you know a school teacher whose class is going to read your book—you can order books for the students yourself at the publisher-direct price and invoice the teacher according to your agreed-upon price.
Do Libraries Need a High Discount?
Libraries are different altogether because they're not trying to sell your book. They have a set budget for purchasing books, so you don't have to offer them a high discount. However, you do have to make sure your title metadata properly catalogs your book for library purchase; otherwise they'll have trouble ever finding it to make their purchase.