DROID by Motorola showing Kindle App

To reuse a couple of ‘graphs from my previous blog, “Book Pricing, Finding the Sweet Spot”:

One grand thing about e-books is, since there is no printing involved, once edited, designed, typeset, and formatted, the cost of an e-book is zero. Another is that the retail price a publisher sets can vary day to day.

But, with these two advantages, what does a publisher need to be concerned about when pricing an e-book? Vook, the innovative company that melds books with video, has issued a splendid white paper that goes a long way toward answering this question.

Here are Vook’s Golden Rules of Pricing annotated by yours truly:

1. Zero variable cost means it’s OK to significantly lower prices to maximize revenue.

Week to week—or even day to day—price changes are easy, as are limited-time specials.

2. Optimal pricing is highly content specific.

Business books may command a higher price than books on how to write.

3. Certain pricing thresholds trigger psychological “automatic” purchases.

Lower prices increase impulse buying.

4. Categorization has a large role in optimal pricing and discoverability.

A book that lists calories in popular packaged foods is likely to be found by readers more often if it is placed in the category of “Health Care and Fitness” rather than “Reference.”

5. Merchandising whole catalogs is more effective than single titles: “A rising tide lifts all boats.”

The Write Thought publishes a catalog of writing titles under the Classic Wisdom on Writing series. It is our hope that we will see a synergistic effect on revenue because of this grouping.

6. Containers are critical to driving upsell in App environment.

My understanding of the term “container” as used here is the same as “series.”

7. Lift effects through savvy launch promotions have a profound impact on sales.

For instance, it is suggested that a publisher may wish, when launching a title, to place a low price on it for a period of a few days to a couple of weeks in an effort to get sales to a level that will be noticed by a retailer’s algorithms. Books that stand out sales-wise are used to populate “you may also like” recommendations generating additional sales creating a cyclical effect.

8. In general apps cannot support as high price points as eBooks.

Apple has begun declining apps that are effectively unenhanced e-books, referring publishers to the iBookstore. This basically leaves the android app market for plain Jane e-book Apps.

9. Real‐time sales tracking is necessary to adjust pricing in a dynamic eBook world.

Just like any data, you have to watch what’s happening and adjust accordingly.

10. For each retailer there are distinct best practices to maximize discoverability and revenues.

Pricing doesn’t need to be the same for each retailer. The sweet spot for an e-book in Apple’s iBookstore may be higher than the sweet spot for the same title in Amazon’s Kindle Store.

It’s a new world out there full of challenges and rewards. Sharpen your spear and forge forth.

Just a write thought.

The Pub U is held on the two or three days just prior to the huge, annual Book Expo America.

If you are a book publisher or if you plan on publishing, attending both makes a great one-two educational punch. I’ve been in the book biz for 17 years or so, and I learn something new from these two events every year. And, of course, networking is perhaps the most valuable component of both.

My presentation at Pub U was part of a panel that discussed the necessity of a publisher using a distributor or a wholesaler to get his or her books to market. The two others on the panel were Richard T. Williams of Small Press United, a book distributor, and Craig Pollock of Ingram Book Company. Ingram is the 800-pound canary of the book wholesale industry. Nancy Stewart, also of Ingram, moderated.

In the book industry the terms “distributor” and “wholesaler” are not identical. A distributor contracts with a publisher for the exclusive right to supply a publisher’s books to the greater book trade, including retailers, wholesalers, and libraries. A wholesaler sells into the same book trade but doesn’t require exclusivity.

A distributor is supposed to supply active and aggressive sales representation on behalf of the publisher’s titles. This sales representation can get watered down for a number of reasons, including the fact that many distributors represent too many publishers to give first rate attention to any but the largest and most successful ones. A distributor’s staff may not like a title or see its potential, or may not feel the publisher is doing enough marketing for it and therefore may not get behind it.

The distributor usually retains 25% to 30% of net sales for its services.

 Below is a link to the PowerPoint from my talk. The first two slides explain this a bit more.

Steve Mettee Look Before You Leap IBPA-2011 

I think with brick and mortar bookstores accounting for less and less of the market for books, a publisher should think twice before signing with a distributor. That was the gist of my presentation.

What should a publisher do with the extra margin retained when not using a distributor? Spend the money on marketing the books.

 Just a write thought.

Hook someone on your brand of toothpaste or a certain wine and you’ll get sale after sale. Hook someone on your book and the best you can hope for is that he buys copies for gifts—and that he has lots of friends—or that he talks it up so others will be prompted to buy a copy.

Here is a quote I stole from a recent edition of Shelf Awareness, a great daily newsletter for those interested in bookselling:

Margaret Atwood (Image from Wikipedia.)

“When people say publishing is a business—actually it’s not quite a business. It’s part gambling and part arts and crafts, with a business component. It’s not like any other business, and that’s why when standard businessmen go into publishing and think, ‘Right, I’m going to clean this up, rationalize it and make it work like a real business,’ two years later you find they’re bald because they’ve torn out all their hair. And then you say to them, ‘It’s not like selling beer. It’s not like selling a case of this and a case of that and doing a campaign that works for all of the beer.’ You’re selling one book–not even one author any more. Those days are gone, when you sold, let’s say, ‘Graham Greene’ almost like a brand. You’re selling one book, and each copy of that book has to be bought by one reader and each reading of that book is by one unique individual. It’s very specific.”

                          —Margaret Atwood in an interview with the Globe & Mail

Canadian Margaret Atwood is a poet, novelist, and short story writer. She has been described as a “scintillating wordsmith.”

As challanging as we find the book biz, many publishers—and authors—manage to thrive. My guess is, excellent writing is the best place to start.

 Just a write thought.