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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:
THIS IS AN EXAMPLE ONLY

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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