The Hidden Costs of Books: Understanding the Publishing Industry’s Pricing Strategies

As a student, I never hesitated to spend money on books, yet I often questioned why they were so expensive. Without financial support from my family and relying solely on scholarships, the cost of cultural books, beyond textbooks, was a significant expense. This led me to become a regular at the university library. After graduation, fate led me into the publishing world, where I worked for one of Turkey’s largest publishing houses. What I witnessed was beyond belief. Let’s delve into the hidden costs and pricing strategies of the publishing industry.

The Real Cost of Publishing a Book

Did you know that a novel sold for 20-25 TL has a printing cost, including cover, paper, printing, and binding, of only 1.5 to 2.5 TL? To give a more concrete example, a bestselling book with an average of 256 pages costs just 1.40 TL to produce today, including printing, paper, and cover expenses.

Breaking Down the Costs

• Printing Costs: The actual cost of printing a book is surprisingly low.
• Design Costs: Publishers often employ in-house graphic designers, reducing external costs. Even when outsourced, cover design costs range from $250 to $500, translating to just $0.17 per book for a 3,000-copy print run.
• Author Royalties: Unless you’re a well-known author in the country, receiving royalties from publishers is unlikely. Regular authors earn 3-7% royalties, while successful authors earn 7-10%, with the average being 8%. For a $20 book, this means the author earns $1.6.

Understanding Publisher Profits

Let’s break down the profit margins of publishers. For a book sold at $20, the preparation cost is $1.5, and the author’s royalty is $1.6. This means the total cost is $3.10. Dominant publishers sell this product to distributors and bookstores with a 30-35% discount, meaning they sell it for $14. Consequently, while the author earns $1.6, the publisher earns $11.90.

The Role of Chain Stores

Consider publishers with their own chain stores that never offer discounts. Imagine the profits they make! This is a significant factor in the high prices of books.

The E-Book Dilemma

Have you ever wondered why many bestselling books don’t have e-book versions? Publishers don’t allow e-book sales because the profit margins aren’t as high as with printed books. They fear inflating e-book prices due to objections like “Is this the price for an e-book?” When I wanted to sell e-books for $2.90-$3.90 through my company, I was warned by the industry association dominated by “the big players.” I was told, “You can’t price e-books below 70% of the printed book price.”

Comparing E-Book and Printed Book Profits

Let’s do the math. Suppose a popular author’s book is sold for $20, with a production cost of $3.10 and a selling price of $14, resulting in an $11.90 profit. If the e-book version were released, we would expect it to cost $4 or $5. In this case, the publisher’s profit would be $3 or $4.

Conclusion: Rethinking Our Love for Publishers

As a publisher who deals with these companies and their established systems daily, I find it hard to understand why readers don’t protest, especially regarding e-books. Perhaps it’s time to reconsider our admiration for these publishers.