Pricing Your Book
The following paragraphs provide suggestions on how you should go about deciding the price of your book.
You can arrive at the price of the book using the following thumb rule:
Price of book = Printing Costs + Author’s Earnings
Printing Costs: This is the cost of printing one single copy of the book. The printing cost depends on the number of pages in each book, the dimensions of the book (width and height), and the type of cover chosen (whether hard cover or soft cover). It also depends on the number of copies printed at a time as the larger the number of copies printed (print run), the lesser the cost per copy. The printing cost does not include the cost of editing, typesetting and other services normally associated with the development of the book.
As an example, let us assume a printing cost of Rs. 160/-.
Author’s Earnings (Author’s Royalty, or Royalty): This component is decided by you, the author. You decide how much your royalty should be, i.e. the amount you will earn per copy sold. When a book is sold, we pay you back this entire amount and do not withhold any part of it.
For this example. let us assume that the author chooses to earn Rs. 20/- from each book sold. This is the author royalty per copy.
The total of printing cost and author’s earnings is, therefore:
Rs. 160.00 (Printing Costs)
+ Rs. 20.00 (Author’s Earnings or Author Royalty)
Although this amount, Rs. 180/-, covers the printing costs and the author’s royalty, it cannot be the marked selling price of the book. This is because retailers (both, those selling through web-based (online) platforms and those selling through physical stores) will agree to sell your books only if they are offered a discount on the marked price. In most cases, these discounts stand at 50% or more. After providing retailers this discount, therefore, the cost of producing the book and the author’s revenue need to be recovered.
Therefore, assuming that the retailer is offered a discount of 50%, marked price = 180/50% = Rs. 360/-
This will be the price listed (printed, also called MRP) on the book.
Thus, a retailer that is offered a 50% discount will pay back Rs. 180/- for each book it sells. Of this, the author is paid Rs. 20/- (the entire royalty amount) while Rs. 160/- accounts for the cost of printing the book.
As illustrated above, you choose how much you wish to earn as royalty per sale. We pay you that entire amount, and withhold nothing. There are no complicated formulae, no percentages, no revenue sharing, nothing. You receive the entire amount. Period.
If you had already paid for the printing of the book, the cost of printing is also reimbursed to you. If the book was printed on demand after the sale was made, the cost of printing is withheld to cover that (printing) expense.
Note: Due to the fact that dual pricing is illegal, books must be priced the same on all channels(i.e. online and in physical stores). These channels may, in turn, individually offer their buyers a discount.
Note that, using the above formula, the higher the Author’s Earnings demanded by the author, the higher will be the cost of the book. While a larger author’s earnings risks the possibility of fewer copies of the book being sold, a smaller value for that component means books can be priced lower, thus attracting more sales.
For ebooks, the same procedure is followed to arrive at the price, the difference being the absence of the printing cost. When a book is sold, the entire amount returned by the retailers (i.e. retail price – discount offered to retailers) constitutes the author’s earnings. Many of these retail platforms have strict guidelines on how to price an ebook, mostly depending on the price of the printed book versions.
So, for example, if your ebook is priced at Rs. 199/- and the retailer was offered a discount of 50%, after each sale you will be reimbursed Rs. 99.50.