Before we delve into the world of hardback, full-color children's books, let me assure everyone that the paperback, black and white editions of all the children's books have received a final bid check and all of them will be able to retail for $9.99, whether your book is 54 or 24 pages in length. All titles can be purchased for the full, standard discount of 50% off the Suggested Retail Price (SRP) and the full royalty of 15% will be paid to the author and the full royalty of 15% will be paid to the illustrator.
That is the great news. Now let's move into tougher territory.
After all is said and done, after all the bids are in and the numbers are crunched, Jennifer was satisfied we got the best bids for the highest quality materials for the new line of children's full-color hardbacks. The 6 x 6 books will feature wrap-around dust jackets and ship (all year round, no matter the weather) with audio CDs. Interior pages will be full-color on heavy, high gloss stock. All paper will be recycled and all inks will be non-toxic. But in the same breath that she told me all of this, she also said that most of our authors won't be happy.
Writing under a nom de plume for more than two decades, Jennifer has published both paperback and hardback children's stories. All of them have been published by either OHP (in the 1980s) or other small, independent presses. Her SRPs range from $14.99 to $28.99. She doesn't have a problem selling copy. As a matter of fact, her royalties from other presses are gifted to OHP every year, helping us stay in business. How does she do it? How does she sell copies of books that are priced so much higher than her competitors at the big presses? In a couple of ways.
1) She sells at charity events. Jennifer teams with charities that she believes in and sells the books for the full SRP. $2 to $4 from each book goes to the charity. People like this feeling and don't compare her books to mass market, big label books.
2) She sells after dynamic performances. Jennifer stages mini plays based on scenes from her books or reads from the book while the audience interacts with her with crafts (such as masks of the characters, or call and response). The cost of the book appears to include the cost of admission to the show and people see value in this.
3) Other than the books that Jennifer buys for resale from OHP, no other press gives her a royalty on the books she buys from them. She usually gets a 30% discount. Having paid only 70% of the SRP, she resells the books for 80% of the SRP. This way she makes her money back, makes a profit roughly equal to a 5 to 10% royalty on gross received, and the buyer gets a 20% discount that they love.
This list actually goes on. But since Jennifer has been actively writing and selling her own books since she was sixteen years old, this isn't surprising. Of course, any of our authors can do any of these things that Jennifer does, especially #3 because OHP grants a 50% discount which allows a lot more play room when passing on the savings to end buyers. However, there's something that Jennifer has that most authors don't have: An inside view of the bottom line. In this blog, I'd like to change that.
If we move forward with the bids we have, our full-color, hardback children's books will have SRPs ranging from $22.99 to $26.99. If your book is naturally black and white already, and so the hardback would stay black and white, you'd be looking at a SRP of $21.99. This includes the audio CD included with the book and all the quality materials and details I outlined above. But let's go a step further. Let's actually try for absolute transparency.
Interior full-color pages are $0.06 each.
Dustjackets are $0.22 each.
Hardback cases are $5.55 each.
Binding is $0.21 per book.
Shrink wrapping is $0.20 per book.
Audio CDs are $0.25 each.
So, this means that if your book is an average 38 pages long, the interior pages cost $2.28. The pages are printed on huge sheets so you don't get a discount if some of the 38 pages are black and white. They all cost $0.06 each. Add the $2.28 to the other costs of $6.43 for a total of $8.71 per book. $8.71 is what OHP has to pay upfront for each book.
Fine details: Our hardcases are solid black so dustjackets must be used. Cases and binding are mandatory for obvious reasons. Shrink wrapping must be done if we include CDs. Jennifer prefers to have audio downloadable only but almost all of our authors have voiced a preference for a included CD.
Most presses (and lots of self-publishing guides) like to use the ratio: Cost x 3 = SRP rounded to the nearest industry standard price. Let's use that formula: $8.71 x 3 = $26.13. Now let's go look at the shelves at the Barnes & Noble Super Store. There are hardbacks with SRPs of $16.99, $18.99, $19.99, $21.99, $24.99 and $26.99. There are even some gorgeous editions that are signed for $28.99. There's no $17.99, $20.99, or $25.99 that I could find. So I guess we're looking at a $26.99 SRP for a full-color, heavy gloss stock, dustjacketed children's book with an enclosed CD.
Let's run with that for now.
So we have a SRP of $26.99. Take a 50% discount right off the top and that leaves $13.49. So a bookstore buys the book for $13.49. But wait! First remove the royalty. 15% for the author and 15% for the illustrator. A 30% royalty deducts $4.04. This leaves $9.45 to OHP. Minus the $8.71 material cost for a remaining profit of $0.74. Yes, for the layout, design, packing, ISBN, etc. etc. to produce the book, OHP nets $0.74.
And guess what? Jennifer is fine with that. Sure, she'd rather make a whole dollar profit, but that simply isn't possible here.
However, I would be willing to bet that we lost many of our authors as soon as I said, 38 page book for $26.99.
Now, how can you sell a book with a $26.99 SRP? Well, you get the book from OHP for 65% off the SRP (that's your standard 50% discount plus your 15% royalty right off the top). So you pay $11.47 per book. How much do you want to profit? If you only want to profit what OHP does, than resell the book for $12.21 and make a $0.74 profit. Or, resell the book for $14.99 and make a $3.52 profit! The choice is yours. Imagine the deal your buyers are going to see when they can buy a $26.99 book for half off!
So, shall we dialogue from here? What do we have to talk about? Well, if you want your audio to be download-only and no CD included, than minus $0.45 from your cost. Calculate your SRP with the formula above and round it *up* to the nearest industry standard. Does that SRP work for you if you can order the books for 65% off and resell them for whatever you like? Think about it. Then email me :)
Cris
