If you are self-publishing a book, you need to understand wholesale discounts and how it affects the amount of money you will make when you sell a book through retail channels. When I talk to authors about how to calculate their book’s profit they’re often a little lost when it comes to understanding wholesale discounts. In this self-publishing article, I will explain what a wholesale discount is, and how to calculate the amount of money you will make when you sell your book.
To clarify, wholesale discounts apply to print books only. I’m not talking about eBook sales here, just print.
What is a wholesale discount?
In very simple terms, a wholesale discount is a discount off the list price of your book that the book wholesaler requires to buy your book from you for resale.
If your book is listed at ten dollars, they’re not going to buy it from you for ten dollars then sell it to a consumer for the same ten dollars. They would not make any money that way. They require that you sell your book to them at a discount off the set list price. The amount of that discount is called a wholesale discount.
To calculate your book’s profit, you take your list price, subtract the wholesale discount, then subtract the printing cost of the book. What’s left over is how much you made off the sale of that book.
Let’s look the following scenario:
- you’re printing a paperback book with 300 pages through IngramSpark
- you’re setting a retail price on the book of $15.00
- the print cost of the book through IngramSpark is $5.35
- you’re selecting a wholesale discount of 40%
Take that list price of $15 and subtract a wholesale discount of 40% which leaves $9.00. Take that nine dollars and subtract the printing cost that IngramSpark is going to charge you of $5.35. That leaves $3.65 which is how much you will make from that book sale.
$15.00 list price
-$6.00 wholesale discount (40% of $15)
-$5.35 printing cost
=$3.65 profit made per book sale
With IngramSpark you can set your wholesale discount as low as 30 percent. With CreateSpace you have two options:
- Their Standard Distribution which will get your book listed on Amazon.com only for a 40% wholesale discount
- Their Expanded Distribution for a 60% wholesale discount, which will get your book on more online book retailers, such as BarnesandNoble.com and Booksamillion.com, as well as Amazon.com.
IngramSpark will get you that wider distribution for a 30% wholesale discount, versus the 60% required at CreateSpace. If you are looking to have your book available on other online book retailers other than Amazon, I suggest using IngramSpark due to the lower wholesale discount needed for that level of distribution.
Do you have more questions about self-publishing? Watch our free self-publishing videos, or sign up for a consulting session.
I really appreciate you breaking this down in simple, easy to understand terms. Thank you!
Thank you! Such helpful and easy to follow information. Very important info for an independent author! With Ingramspark it sounds like there is a range between 30%-40% for which the author has the leverage to choose. Is there any downfall to a new author choosing the lower 30% discount for wholesalers? Thank you.
Omg…I just finished my novel that’s taken a couple of years! Now to see the actual profit….oh my was it worth it? You have to sell lots of books to reap any benefit…..wonderful info especially formatting which I’m having a huge problem with on my word2010. Thanks so much for this help!
Wow! Great info here. Thanks so much. I’ll mark this post to reference it when I publish a book. [Hopefully!] I’ll follow your blog and connect with you online.
http://victoriamarielees.blogspot.com
I’m pretty sure I intend to self publish, so this is really useful to know.
Thanks for sharing 🙂
This is great advice! I wanted to ask since I haven’t worked with IngramSpark or CreateSpace, they do not charge anything extra for transportation to the wholesalers? It seems the transportation cost would vary according to the location of the wholesaler for IngramSpark/CreateSpace to oblige to a flat discount. If that’s the case, wouldn’t transportation cost have to be subtracted separately from the sales revenue?
They do not charge any transportation costs, that is built into the pricing. I am pretty sure the wholesaler pays for the shipping of the books to them. Just like you pay for shipping if you buy something. If you order books to be shipped to you, then you pay the shipping costs.
Great information and a clear breakdown of profits that are made on book sales. Thanks, Kimberly! Quick question, is 40% typic for a wholesale discount or should we expect an even larger one?
It is only typical with IngramSpark and CreateSpace when the books are POD and do not take up space on retail shelves. If you were to approach a retailer and ask them to carry your books in their store, they often ask for at least 50%, sometimes 60%.
You make it sound simple!
Having never (yet) ventured into the CreateSpace/IngramSpark arena, this is new information. Thanks for sharing. I’ll bookmark this page for future reference.
Interesting. So much to learn about self-publishing. I don’t know how so many writers do both.
Anna from elements of emaginette
I don’t self-publish, but I appreciate this information because in the future I may need to know this. 🙂
This is really great information. Thanks for sharing
Such great information. I had no idea about any of this. I’ll plug this on Facebook in a couple of weeks as well. Thanks, Kimberly!