P&Ls and how books make (or don't) money

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Profit & Loss/Profitability & Liability: How Books Make (or Don't Make!) Money

A basic outline of what happens when an editor buys a book and wants to publish it. This is very much a basic look at publishing and publishing finance, with some explanation of terms commonly used by the marketing and sales departments.

Comments

Re: Returns - always bad?

[(Anonymous)]

I'm not Anna, but this is what I think given what she said.

Why would a pub print only 10K if they think there's demand for more? The more they print, the cheaper per unit cost becomes:

[(fixed cost + variable cost) / (# of units printed)] = per unit cost

Since fixed cost is the same, and the variable will change depending on the number of copies printed, and since the per unit cost of printing will be much less if you print more, a publisher is most likely to print as many copies as it thinks it can sell.

So the fact that Aeryn sold 8,400 copies means (in my non-publishing expert's opinion):

1. The publisher printed a lot and she only sold 8,400 copies -- crappy sell-through

OR

2. The publisher couldn't print many copies because nobody really wanted to order her books that much (meaning B&N, Borders, Walden, and other retail outlets) and consequently she sold badly

Either way, poor Aeryn's screwed.

Anna -- please provide more enlightenment on this because I may have been completely wrong!