Monday, June 11, 2018

How I arrived at a list price (printed price) for my Print-On-Demand iami1 blog book with low sales potential

Last updated on 13th June 2018

Over the past few weeks, I have been working on making my Print-On-Demand book titled, 'The Ultimate Existential Reality Answer; Vedanta; God and Science', which has been self-published with Pothi.com's help at https://pothi.com/pothi/book/ravi-s-iyer-ultimate-existential-reality-answer-vedanta-god-and-science, more and more like regular paperback books that are sold in bookshops. Note that the changes are being made to a draft version which will later be updated on Pothi.com. Further note that the corresponding ebook is available for free download.

One important aspect of a regular paperback book sold in bookshops is that a price is printed typically in the bottom right section of the back cover page of the book. This price is viewed as Maximum Retail Price (MRP) even if only the word Price and the figure in Rupees are printed on the back cover page without the words Maximum and Retail. So customers expect to be charged either the MRP price or lower but not a higher price. Note that for online bookshops, the shipping charges are extra and do not get included in the MRP price.

Now for books which have high sales potential, book distributors are willing to tie up with publishers on one side and book shops on the other side. The publisher will offer the book to the distributor at say 50% less than the printed price (MRP) which I think is also referred to as the list price. I presume that the distributor would have to handle some stocking and shipping expenses. The distributor may then offer the book to the book seller at say 20% to 30% less than the list price, along with a credit period of a few months. The book seller, in this hypothetical case, gets a (profit) margin of 20% to 30% of the list price of the book for a book copy sold at the list price.

But books like my book above are a niche category with low sales potential. So regular book publishers would not want to publish my book.

I have no choice but to self-publish my book using either a self-publishing and Print-On-Demand support company like Pothi.com or do bulk printing using an offset printer company (minimum print run is typically 500 copies). Bulk printing involves large upfront expenses as well as management burden of mainitaining the inventory of copies, transacting with bookshops etc. But offset printing in bulk offers much lower cost of printing per copy.

Print-On-Demand using self-publising support company Pothi.com was what I chose to avoid both the large upfront expense as well as management and transacting with bookshops burden.

Pothi.com provides for sales of book through its online store and, for a charge, through its online retail partners like amazon.in and flipkart. Physical book distributors would not be interested at all to stock & distribute my niche book to book shops/book sellers due to its low sales potential. Further a print-on-demand book like my book, is significantly more expensive per copy than bulk printed books, which further reduces its sales potential.

Pothi.com's lowest charge package for distribution to amazon.in and flipkart is called Standard distribution which is Rs. 1500 one-time and an annual fee which is currently waived. So far I have not opted for that and so my book is sold only through Pothi.com. But I am considering to opt for Standard online distribution.

Based on my initial exploration of this matter, my book of 123 A5 sized Black & White pages with colour cover front and back page, may sell at Rs. 159 in Pothi.com store (which is the current price at which the current version of the book sells) and Rs. 199 at amazon.in and flipkart. In both these outlets my royalty will be ZERO. [Pothi.com has a transparent royalty price calculator for sales price and royalty on Pothi.com and other channels, under their free and priced distribution packages. If readers want to get some feel of it they can visit this link (you need to click on royalty tab to see the royalty calc): https://publish.pothi.com/tools/price-royalty-calculator/.]

For Puttaparthi bookshops who are willing to sell the book (if there are interested buyers), they will have to buy copies from Pothi.com (like regular customers). As my royalty is NIL, even the author price at Pothi.com is Rs. 159 (same as customer price). BTW I have given a free copy to one bookshop. So they don't make any investment. If that copy sells then they can use that money to buy the next copy from Pothi.com.

Shipping charge for 1 copy to Puttaparthi is Rs. 50 (at Pothi.com web store) which drops to around Rs. 85 for 3 copies. If Puttaparthi bookshop guy buys a single copy from Pothi.com, he will pay Rs. 159 + 50 shipping charge which comes to a total of Rs. 209. He will want to apply a margin of say Rs. 40 on it, raising the price to Rs. 249 when sold by his bookshop.

So what I propose for the list price (printed price/MRP) now, is to print Rs. 249 against the word 'Price' on the back cover page of the book. [See 13th June 2018 update below.] I will NOT be printing the price on inner content pages of the book including the Title-Verso pages.

The various sales channel possibilities and related prices are as follows:

1) Pothi.com online store price for me (author) as well as any customer: Rs. 159  [123 pages, A5 size book; zero royalty]. Shipping charges will be extra. As this price of Rs. 159 is lesser than list price of Rs. 249, customer will not have complaints about being charged above the list price.

2) Online retailer (amazon.in and flipkart) price if I opt for Standard distribution: Rs. 199 [zero royalty]. Shipping charges will be extra. If amazon.in does not agree to have a price of Rs. 199 when Pothi.com store price for customers (not just author price) is lower at Rs. 159, then I may NOT opt for selling on amazon.in.  Here is a help page from amazon.in related to this matter: https://www.amazon.in/gp/help/customer/display.html?ie=UTF8&nodeId=202034980. It states, "Tell Us About a Lower Price is a feature that lets you to notify us of a lower price you found elsewhere, for items sold on our website. We convey the feedback received through this feature to sellers."

As this price of Rs. 199 is lesser than list price of Rs. 249, customer will not have complaints about being charged above the list price.

[11th June 2018 update: Pothi.com clarified that all channels like Pothi.com web store and the retailer channels of Amazon and flipkart, should sell the book at the same price. As it is important for me to allow customers to buy the book online at the lower price of Rs. 159 from Pothi.com, I think I will NOT opt for distribution (Extended Online Distribution). Note that, under the cheapest Extended Online Distribution package of Pothi.com (Rs. 1500 one-time charge and with annual fee being waived currently), the minimum price for retail channels of amazon.in and flipkart for my book of 123 A5 size Black & White pages is Rs. 199. end-11th June 2018 update.]

3) Book shops may sell the book at Rs. 249. They will buy the book from Pothi.com (at Rs. 159), pay for shipping (say Rs. 50), and then have a margin of Rs. 40 for each book sale.

As this price of Rs. 249 is same as the list price of Rs. 249, customer will not have complaints about being charged above the list price.
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It may help readers to get some idea of what the list price would have been if I had gone the offset printing route (500 copies+ printing at one go, stocking and distributing). I think that printing 500 copies of 123 pages A5 book, black & white inner content and colour cover front and back pages would have cost around Rs. 25,000 if I had approached a decent offset printer. [They would offer lower rates to high volume customers like a publishing house.]

That would come to a basic printing cost of Rs. 50 per copy. Getting the copies shipped to Puttaparthi may add, say Rs. 5 to per copy cost. That makes it Rs. 55. If somebody did the stocking and distribution as a business service, he/she may charge around, say Rs. 50 per copy to cover expenses and their margin. This would make the price at which a book shop is provided the copy as Rs. 105. Adding a book shop margin of Rs. 35, would make the final sale price as Rs. 140. This Rs. 140 could be the list price printed on the book back cover.

The big risk in this scenario is that only a few books may sell making the bulk of the investment of around Rs. 25,000 to print 500 copies, a waste. Another disadvantage in this option is that online sales would require setting up arrangements, if possible, with some online book store(s) to sell the book in their online book store(s).
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Update on 13th June 2018: Pothi.com informed me that even if I do NOT use distribution (selling via big online retailers like amazon.in and flipkart through Pothi.com) and sell on Pothi.com only via Pothi.com web store, they will sell the book on Pothi.com store at the price printed on the book. So my plan to have Rs. 249 printed as the Price on the book back cover page, with Pothi.com online store selling it at Rs. 159 + shipping, and the Puttaparthi book shop(s) guy(s) selling at Rs. 249 (to cover buying from Pothi.com at Rs. 159 + shipping + some margin), has gone for a toss!

If I print Rs. 249 as the price on the book back cover page, Pothi.com online store will sell the book at Rs. 249 and NOT lower. And shipping charge will be extra. I tried to impress upon them that amazon.in offers a discounted price for many books on their site, and so Pothi.com also could do so - i.e. sell the book at discounted price of Rs 159 even if Rs. 249 is printed as the price on the book. But Pothi.com did NOT budge.

That has left me with the only option of NOT printing the price on the book, for the Pothi.com case. Perhaps if I explore self-publishing & printing the book additionally with some other self-publishing support company (my agreement with Pothi.com is NOT exclusive), they (other company) may be willing to sell on their store at a discounted price. But that means getting into the hassles of an additional arrangement with another self-publishing support company. I am not sure whether I want to do that, as of now at least.

So the immediate solution is NOT to print the price on the book back cover page OR anywhere else in the book, as is the case for the current version of the book sold by and printed through Pothi.com.

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