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

[alg]

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

[pir8fancier.livejournal.com]

Fascinating. I write for a small mystery publisher, and I don't think they have the same woes, but I have heard the same woeful tales from other editors. Another key thing which no one realizes is distribution. The evil "d" word. Interesting that amazon actually orders its own books.

[alg.livejournal.com]

Small press works very differently!

[pir8fancier.livejournal.com]

They are determined to keep it small so that they don't lose control. I remember talking with an editor at Simon and Schuster about the process to okay a book. How 10 people have to love it. It's book by committee. If the 10th person doesn't love it, it doesn't get published. With my publisher, if the editor likes it (who also happens to be the owner), it gets published. They run it for love, not money. Lucky them.

Has the romance mid-list gone through the same hell as the mystery mid-list? I have a friend who was cut from Bantam because she sold through only 40,000 paperbacks. ONLY 40,000! Wow. I would be doing handsprings if my books did that well, but it wasn't good enough for her. They cut her.

[alg.livejournal.com]

ALL midlist has gone through the same cuts. ALL of it. Mystery, SF, fantasy, westerns, romance, etc. The difference is in the numbers.

(Frankly, the above doesn't sound very plausible. A 40,000 sell through is good -- unless you printed 200,000 copies of the book, which I doubt it did.

A 40,000 print run is what is not good.)

Now I understand

[sarahmccarty.livejournal.com]

I make a good living as a small press e/print author and I understood when I expanded into the NY market I might be taking a cut in pay on those books, at least initially, but I didn't understand why. Rather simplistically, my mind stuck on the formula of larger print run/sell thru equals larger sales. All things proportional, the larger print runs should make up for less percentage per book. After going through this a few times, I now understand why that's not true.

Thanks so much for explaining this.

Re: Now I understand

[alg.livejournal.com]

My pleasure! I'm glad you understand it!

Re: Now I understand

[sarahmccarty.livejournal.com]

LOL!! Well, I had to go through it four times and it might be more accurate to say I'm assuming I understand it now. But I totally understand why my formula didn't work.:-)

Re: Now I understand

[alg.livejournal.com]

Well, listen, I have done this about a million times -- okay, realistically? I have done it at least a few hundred. Seriously. And I am still learning new bits and pieces. So expect to always have something new come out! THis is bare bones stuff -- the real P&L is a lot more complex.

Re: Now I understand

[sarahmccarty.livejournal.com]

You know, I can easily see where trying to "nail" this formula could become a personal challenge to someone having to deal with it daily. I'm not in this end of the business and I've already played a "what if " scenario with it. ;-)

Re: Now I understand

[alicebentley]

I would avoid spending lots of time finalizing a formula (unless you really like playing What If) because not only do the variables change for every single book, the industry influences that affect everything are also in flux.

Makes for all sorts of fun.

Re: Now I understand

[sarahmccarty.livejournal.com]

I know, but that's the hook. With so many variables, it could almost be a mental sport. Or the next mind game to sweep the nation....