Almost nothing in the book publishing world causes as much confusion as discounts. Part of the confusion stems from the term itself. As a bargain shopper, I’m used to the idea of a discount being a good thing. (When I get a discount of 50%, it’s more exciting than when I get a discount of 10%.)
As a publisher, the opposite is true. In book-industry parlance, discounts are the money you must give away to others for them to distribute your book. In this case, a lower discount is better for you. Lower discounts mean more profits for you; higher discounts mean less.
You have to give a big discount if you want your book in bookstores. Discounts and returns are two of the reasons why self-publishing expert Dan Poynter says bookstores are just about the worst place to sell books.
In my book Publishize, I recommend that you print through Lightning Source (LSI). Distribution and discounts are the reasons. LSI is owned by Ingram, so when you sign up with LSI and pay $12 per year (per title), you get your book into Ingram’s large distribution network. Getting your book into the Ingram database through LSI makes it available to leading distributors such as Ingram, Baker & Taylor, Barnes & Noble, Amazon.com and others.
LSI’s online distribution network is great, but another key reason to print with LSI is so you can set a lower discount than the industry norm. The lowest discount you can set is 20%, which is called a “short discount” in the trade. On the LSI Web site, when you set up your book, you also set the discount and decide whether or not you will accept returns.
If you opt for a short discount, such as 20%, your book will never be stocked in bricks and mortar bookstores. You absolutely won’t get bookstore sales unless you set your discount to 55% and accept returns.
Even if you decide to set your discount to 55% and accept returns in an effort to make bookstores happy, you may not get bookstore orders anyway. The reality is most bookstores won’t stock titles that are self-published or printed on demand, so by setting the higher discount, you lose 35% on every sale on the off chance that some bookstore might actually order your book. (Accepting returns can be an even bigger problem.)
If you have local bookstores that you really want to carry the book, another option is to walk in and ask if they will sell the books on consignment or buy them directly from you (and not through a distributor like Ingram). If the bookstore carries local authors, sometimes they won’t have a problem with that arrangement.
Other discounts are those you might decide to offer to bulk buyers or through your own online store. As a publisher, when you buy books directly from LSI, you just pay the cost of printing and shipping. Any discount you decide to offer on those books is up to you.
On my book Web sites, I offer a wholesale discount to retailers who want to buy books in quantity directly from us. (You can see an example on our Happy Hound site, for example.)
We’ve sold books at wholesale prices to colleges, catalogs, and organizations. We also offer an even better nonprofit discount, which makes sense for some of our books like Funds to the Rescue. For example, recently a non-profit coalition of rescue groups purchased Funds to the Rescue in quantity to give out to their members as a gift, and we gave them the non-profit price (i.e., a 50% discount).
Although it’s confusing, understanding discounts is a big part of the “money matters” in publishing. Ignore them at your peril!