Book discounts can be confusing and make your head hurt.
Should you give a big discount to stimulate distribution?
Or a small discount to maximize your per-book profit?
And if you pick the wrong one, will retailers shun your book?
These questions and more have come up recently in blog comments and email queries. Here’s an email from a client who has arrived at the moment when you have to put something into the discount box in your Lightning Source title setup.
This is even more nerve-wracking because at a print on demand vendor like Lightning Source, you can only set one discount percentage for all the books they sell, no matter who they are sold to. (My responses in blue.)
My book is almost at Lightning Source. I’ve sorted through so many questions and I’m down to the issue of wholesale percentages in order to complete my contract with Lightning Source. I have spoken to a friend in marketing and an author with a lot of experience, and they all suggest I call you. I didn’t find the topic of wholesale discounts on your web site but please direct me if it is there.
Congrats on getting your book (almost) finished. Now comes the fun part. If you search on my blog for articles relating to “distribution” and “discounts,” you’ll find quite a few that go into this subject. Here’s one to get you started: Self-Publishing Basics: Understanding Book Discounts
I expect most of my book sales to come through me giving talks and my website, Amazon and other online sources. However, I would like to market to independent bookstores that normally expect the 55% discount off the cover price ($14.95).
Bookstores will require a minimum 40% discount, 55% is for distributors or wholesalers.
Can you give me any feedback on the issue of what percentage discount to choose for my Lightning Source agreement?
The only real choice you have in my mind is between 20%, the minimum allowed by LSI, and 55% if you want to try to attract bookstore sales. You need to give LSI 55% because distribution will cost you the 15% added in, and the bookstore will receive 40%.
Do online sources like Amazon, give some priority to your book if you offer a bigger discount?
Or do they market it as much if they only get a 25% or 30% discount as is more common for them?
Retailers like Amazon don’t do any marketing at all–that’s your job.
My friend the author thought we should give the biggest discount so they have more flexibility in marketing but that might not serve and it certainly cuts into any revenues.
Perhaps he’s remembering his days as a traditionally-published author. Unless you plan to aggressively market to bookstores, why give up the extra %? Remember: No one will market the book, only you. So what are you paying for?
If I make the discount only 30% off the retail price, can I as a publisher sell it directly to stores like our local indie, by buying for example ten copies myself, then selling to them with the 55% discount and my own promise to take back any unsold books?
I would strongly advise against this plan. First, why give 30% if you only have to give 20%? What are you getting for the extra 10%? Nothing I can see. This store and other indies are unlikely to buy your book, although they will let you consign it. And they don’t need, nor do they get, 55%. Unsold consigned copies will be returned to you since they are your property anyway. I don’t consider consignment a real form of distribution, by the way, but it’s a good way to go if you have an event planned at the store.
No problem, and good luck!
Learn Things in the Comments
As frequent readers know, often there’s a lot to be learned in the comments on blog posts, and some of them have become lengthy and detailed discussions in their own right.
One of the most popular is Amazon and Lightning Source: End of an Era? with 166 comments so far, many reflecting authors’ personal experiences.
The subject of discounts came up there, too, and frequent commenter James Byrd of the Self-Publishers Online Conference helped out with this comment:
“The distributor … demands a 55% discount because they need to be able to offer 40% to book stores and keep 15% for themselves. If you are selling direct to bookstores, 40% should be fine.
We actually make no effort to sell to bookstores. We agree with Dan Poynter’s philosophy that bookstores are terrible places to sell books. We set our discount to 20% and don’t allow returns, which means our books are sold POD by online booksellers only.
In our experience, if you set the discount higher, the retailer just passes most of the savings on to their customers, which means offering a higher discount is effectively the same thing as lowering your price. We’ve even had Amazon offer our books at a discount when they only have a 20% margin to work with!”
James along with wife Susan Daffron have at least 10 self-published books for sale and consult with many authors.
It’s also good to remember that many people become self-publishers because they want to do things their own way, and why not? Remember, you’re the publisher and you get to make the rules for your own company.
There may be times you want to adust your discounts one way or another, and this was spelled out really well by Gary Roberts of Toolemera Press:
“I don’t think there is any one fit for any one title or publisher. I recently filled an order from a museum store for ten copies of each title on my list. I upped the discount from 55% to 60% as they are buying direct from me and informed them that for the future, they can buy from me or from Ingram. It’s up to them.
The good will gesture produced further orders for titles needed for a conference they were planning as well as contacts from another museum store.
The point is to put books into the hands of new customers who will, hopefully, turn into repeat customers or recommend you to other readers or buyers.”
I’m indebted to all the knowledgeable people who post comments here, because they help give readers a wide-ranging perspective that’s more valuable than any one person could do on their own, and I thank you all.
Do you have questions about discounts? Ask them in the comments.
Photo by Orin Zebest