What Are Wholesale Discounts and Why Should Authors Care?
Here, we discuss book wholesalers, distributors, and wholesale discounts. Marika Reisberg welcomes Michele DeFilippo on the Sustaining Creativity Podcast.
What Are Wholesale Discounts and Why Should Authors Care?
When determining the list price of your book, there are several factors to consider, from paper and ink selection to trim size and binding style. You must also consider how much of a discount to offer wholesalers.
In a nutshell, your list price should factor in the book’s printing cost, the wholesale discount, and a comfortable profit for yourself. Keep in mind, however, that a retailer has the right to sell your book at their chosen price, regardless of your suggested list price. The retail price may be higher, lower, or the same as your suggested list price, but either way, you’ll receive the list price minus the discount you selected.
Considering this possible retail price discrepancy, you may be wondering why you should bother with a wholesale discount. After all, isn’t the idea to maximize your income?
We’ll get to the benefits of wholesale discounts later in this article. First, we should explore a few basic terms.
What Is a Book Wholesaler?
A wholesaler is a company that buys products in bulk to redistribute and sell. A book wholesaler buys large quantities of books from publishers (often via distributors) to sell to their network of retailers and libraries.
Most retailers prefer to order from trusted middlemen (well-known wholesalers) rather than multiple “unknown” sources (e.g. indie authors, who the retailers may never have done business with before and who have an unknown fulfillment track record).
You can reach out to wholesalers directly to try and convince them to buy your book, but a book distributor may be a more effective option.
Many wholesalers have restrictions that make it difficult for authors with few titles to deal with them directly (they may require publishers to have a minimum number of titles under their belt before doing business with them). If you don’t meet wholesaler eligibility requirements alone, a book distributor may be a wise solution.
What Is a Book Distributor?
Book distributors supply books to the marketplace (including wholesalers) on your behalf. Unlike wholesalers (which essentially work for libraries, bookstores, etc.), distributors work for publishers (if you’re a self-published author, you are the publisher), and they provide customer service and warehousing, shipping, and return solutions.
Some offer additional services, like marketing.
In return for their services, book distributors may charge fees and take a cut of your profits (read the fine print before choosing any distributor; not all are set up the same).
What Is a Wholesale Discount?
A wholesale discount is a reduced pricing arrangement, in this case between a publisher and a wholesaler, retailer, or library. Publishers set the price they want the book to sell for, and then they offer the book at a discounted price to wholesalers, retailers, and libraries.
The higher the wholesale discount, the more attractive it is. However, a higher wholesale discount will require a higher list price. It’s important to note that “wholesale discount” applies only to print books. (Wondering if print books are becoming obsolete? Click here.)
Depending on how and where you’re distributing your book, you may be able to choose a wholesale discount between 20% and 55%. Requirements vary by company. IngramSpark allows you to choose a discount between 40% (US minimum) and 55% (US maximum). At KDP, the wholesale discount is 40% (KDP doesn’t allow authors to adjust their expanded distribution discount).
US bookstores generally require at least a 55% wholesale discount before they’ll consider ordering your books, though there are exceptions. Although this cuts into your profit margin, selecting a 55% discount provides you with the widest exposure and can lead to more sales.
Benefits of Setting a Wholesale Discount:
A wholesale discount provides an incentive for companies to buy your book in bulk and can drive sales up.
Wholesale discounts help make it possible for you to compete with traditional publishers. Many indie authors aren’t aware that wholesale discounts can broaden their distribution opportunities, and so they don’t give their books a chance to really compete with major publishers in bookstores.
Offering competitive wholesale discounts can show credibility. Retailers won’t just appreciate the discounted cost, they’ll see that you did your research and understand the market, which can make them more likely to do business with you. (Provided you choose a high enough discount and also offer returns. Even offering discounts, many retailers might not accept your book if there are no return options.)
What Wholesale Discount Is Right for You?
A wholesale discount that works well for one author may not work as well for another. The recommended 55% discount is not a one-size-fits-all option. What discount to use will depend on where you plan to sell your book, your audience, and your overall goals.
If you want to distribute only through Amazon, you don’t need to worry about setting a discount, as it’s predecided. If you want people to be able to find your book in physical bookstores and libraries, setting a 55% discount may be your best bet.
Who is your target audience, and where do they primarily buy their books? Do they prefer physical copies or eBooks? Do they buy online or at brick-and-mortar stores? What profit margin do you hope to achieve? Is your target audience outside of the United States? You might be able to reach your target audience through channels that don’t require a high discount.
You’ll need to decide if the benefits of higher discounts outweigh the cons. A higher discount allows for wider distribution, potentially leading to more sales. Setting a higher list price can account for a higher discount, but be careful not to price yourself out of the market.
Higher retail prices generally hint at higher quality, and customers are aware of this. However, the book must also be worthy of the higher price. To ensure your book meets buyers’ standards, you should hire quality services.
At 1106 Design, we provide end-to-end services to help prepare your book for publication, from editing to cover design. All of our services come with our signature hand-holding, so we’re here to answer all your questions. Contact us today to learn more about how we can help you create an outstanding book.
In case you missed it…
How to Choose Paper for Your Print Book
A lot more goes into your book's paper selection than you may think. Click here to learn what paper options are available, which is right for you, and more.
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Marika Reisberg: Sustaining Creativity Podcast
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