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Pricing - Retail and Discount Schedules

You, as the publisher/author, get to set your own retail price. You also should set your own pricing discount schedule for your various types of distribution. The law says that you must offer the same discount to the same "class" of customers. It is a little confusing what this means, but generally the type of customer and the terms under which your book is sold to those customers determines the pricing schedule.


Typically they look something like this:

Retail/end user (for instance on your website) Satisfaction guaranteed (returnable if not satisfied)
1-2 copies - no discount, payment upon purchase
2-10 - 10% - payment upon purchase
10+ 15% - net 30 days

Wholesale -

all quantities - 55% discount, returnable, net 90 days (pretty standard)

Retail book stores -

1-2 copies - 20%, non-returnable paid upon order (called a STOP order)
2 + copies - 40% discount,returnable, net 90

Special sales - maybe gift stores, food stores, pet stores or other genre specific
(these are less standard, but might be something like this)

1-5 copies - 25%, non returnable, paid upon order
6-20 copies - 40%, nonreturnable, net 30 days
20+ (or full case) - 50%, nonreturnable, net 45

Once you determine your discount schedule, the law says you must apply it in an even handed way. If you want to offer a different discount to a particular client, you must establish a new discount schedule with some terms that are different than your existing schedules that justifies the difference in terms. another variable that I didn’t mention above and that can effect your schedules is who pays shipping.

Now, in a very practical way, do I think the full force of the US government is going to descend upon us little publishers? No. But is it good business practice to do this and treat your customer equally? Yes.

Once you publish a book and have it listed in Bowker’s Books in Print with a specific retail price and establish your discount schedules, your work with pricing is done. Anyone who buys a book from you may resell it at any price they choose. You have no control over that - nor should you. You’ve set your terms, gotten paid according to your price schedule and released it to the world.

One word of caution that should be noted is that of credit terms. Once you establish your discount schedule, you also need to consider who you consider to be credit worthy. You do not have to extend credit to anyone, however, you do need to assess each companies credit worthiness. Having a standard credit application and terms under which you extend credit can make the difference between the success and failure of your business. There is no point in "selling" books to a company that does not have the known ability to pay for them. There is nothing wrong with asking for money or a credit card upfront. That one small act will save you a world of heartache with companies and individuals who can’t or won’t pay their bills.

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One Response to “Pricing - Retail and Discount Schedules”

  1. I note that the discount schedules provided suggest various credit terms. It is VERY important for small publishers to understand that the granting of credit is a privilege that they control. EVERY person or entity that a publisher extends credit to should fill out a commercial credit application — which the publisher should check out, including the credit references provided. (Standard business credit application forms can be obtained from the large stationery stores.)

    Offering credit for retail sales (that is, to final customers) is ill-advised, unless the customer is an established business that wishes to distribute the books to employees or clients. Others should pay with a credit card or other means that moves the credit risk away from the publisher.

    Retail book stores are _especially_ dangerous credit risks. Often, financially unstable retail stores will order direct from (small) publishers because they are possibly on “prepay only” with the large distributors. It’s almost always a red flag when contacted by a retailer who could otherwise order your book from Baker & Taylor or Ingram Book Group. (After all, both B&T and Ingram offer order-size incentives that can increase the retailer’s discount if they can meet order size requirements, etc.)

    Unscrupulous retailers understand that it is a lot of trouble and expense to attempt collection for a small order — and is even more difficult when it must be done across state lines. So a small publisher is quite unlikely to pursue collection of a $50 order. But Ingram or B&T will most certainly attempt collection of typical bookstore orders in the thousands of dollars.

    One hint, in running a small business that had a lot of customer accounts, those who talk about their “good credit” are usually the ones most seriously in danger of defaulting. Those who actually have good credit, rarely even mention it.

    It’s one thing to make a sale … but you also must be paid once the sale is made.

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