The Price of Books

People like us who buy a few dozen books every year are very aware that book prices continue to rise at a steady clip. I noticed just the other day, in fact, that those new mass market books that are being produced in a slightly taller size than the standard "paperback" are being sold for $9.99, a full $2.00 more than the old size. I judge the new size to be slightly less than an inch taller than the old standard, and I suspect that the large print font used in the new books has added a few pages to each book, but a $2.00 jump in price does seem a little much.

While agreeing that the price of books today is "crazy," the folks over at Three Percent (University of Rochester) offer a look at book pricing from the publisher's point-of-view.

In brief, a bookstore gets an average discount of about 45% off the retail price of a book. Of the remaining amount, 20%+ goes to the publisher’s distributors—more if you figure in charges for returns. Authors get 7.5%, or more, of the retail price on all sales, and most translators get 1.0%. That leaves approx. 35% of the retail price to cover salaries, production, marketing expenses, operating costs, etc. So, if a trade paperback lists for $15, the publisher gets about $5.25 per unit sold. And if a book sells about 3,000 copies (which is solid for a work of literature), that comes out to $15,750. And printing costs alone run about $6,000.

I haven't quite figured out how to make the math in this example work out, but the important point to take away from all of this is that the publisher, on average, nets about 35% of the retail price of each book and has to cover all costs from that margin.

It's also interesting to note that bookstores like Barnes & Noble receive a discount of approximately 45% on each book that they place on their shelves. That tells me that they don't make much of a profit on bestsellers since they sell those at a minimum of 30% off to all customers and at 40% off to those customers who hold one of their membership cards. On top of that, Barnes & Noble sends out occasional special discounts to club members for an extra 15% off of any one book in the store. I have often used one of those coupons to pay less than 50% of the retail price of a bestseller, meaning that Barnes & Noble must have sold the book to me at something below their own cost.

Bottom line: those of us addicted to reading dozens of books a year will always find a way to get our hands on them despite the fact that they are getting more and more expensive every month. We just have to be a bit creative by taking advantage of all the good deals offered by bookstores and by using all the book-trading services offered on the internet. It is highly unlikely that the price of books will ever cause us to read less.