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: breaking down some line items

[(Anonymous)]

I especially agree with #4. It's astonishing that publishers do so little to maximize sell-through. In fact, most incentives offered to booksellers -- including co-op -- are designed to get us to over-order. Sometimes, there's a good reason for that and sometimes you do get good results from this. But more often than not, the result is more waste.

More books would be profitable if each copy sold didn't have to bear the costs of two unsold.

-- Jim

Re: breaking down some line items

[jackfirecat.livejournal.com]

Indeed. I liked the line about 'production bumped it up to x print run to save money in case it was a best-seller'. But how many books are best-sellers? If you instead reduced every print run on principle, you would indeed be caught out by the rare best-seller, but so what. The reprint would be slightly more expensive than having some extra copies from the first printing, but you would have saved from all the other printings that didn't turn out to be bestsellers.

Re: breaking down some line items

[flawed-creation.livejournal.com]

Ah, but the mroe copies you make, the mroe you sell, even if you don't seel them all.

suppose, as a very very simplistic model, there are three bookstores in the world, each of which has offered to stock 1 copy of the book. and suppose that there's a 1/3 chance at each store that the book will sell before they decide to "return" it.

so you print 3 copies, send one to each store, and sell 1 of them. ideally, you make enough to money to cover the cost of all 3 off the one sale.

sure, ti looks wasteful. but if you only printed 1 copy, you'd only be able to have 1 store stock it, and then you might well sell one at all.