Print on Demand Publishing Economics

The Economics of POD

Whilst the main appeal to publishers of POD is the ability to cost effectively print one book at a time, the main factor that makes this model so viable is the vertical integration of printing and distribution.

We will look at the Economics of Print on Demand in two parts:

1. Understanding Printing Options
2. Printing Business Models

Vertical Integration vs Printing and Distributing Books

Avoid trying to mix components of different publishing models. For instance, use a printer with a vertically integrated business model. One that can print on demand and also supply your books into distribution channels and big retailers, such as Amazon and Barnes & Noble. U.S printers who provide this model in order of preference are:

• Lightning Source – distributes using Ingram
• Replica – distributes using Baker&Taylor
• BookSurge – distributes through parent company Amazon

Without vertical integration, print on demand is an expensive way to print one book at a time. Ensure you get net 50% of the cover price on every single sale and the publisher pays shipping.

You can earn twice as much money with half as much labor by using a vertically integrated printer, but stick with these big three - they have no competition.

Publishing e-Books

Once you are set up as a self publisher using print on demand, publishing e-books is easy, and there's little reason to set up your own e-book server and software.
There are different design considerations to look at, especially with e-book covers.
Amazon is driving change with ebooks, but still sells them at well below print price. to change that with their new Amazon Shorts e-books and by concentrating e-book sales in the U.S. store.

Color Print on Demand Economics

Lets start with some constraints of print-on-demand / distribution providers:

• Printing quality is restricted to that of a top end laser printer
• Grey scale production is lousy – so photo reproduction is quite poor
• Very few offer color print on demand due to economic workflow difficulty

Print on demand economics depends more on work flow than the technology. High end laser printers with liquid toner offer an excellent reproduction, but economical print on demand requires an industrial book production setting, with high volume printing on a single piece of equipment.

The entire printing process has to be as quick and automated as possible to keep the costs down, which results in compromises in the way the printers are run to support single issue orders.

The minimum one can expect to pay for color print on demand is 10 cents a page; compared to 1.3 cents a page that publishers currently pay Lightning Source for the smaller cut size into distribution, the publisher cost per book rises dramatically.

Example:

A book a publisher can currently print for $3.00 - $4.00 dollars, discount 25%, sell for less than $15 and earn half the cover price.

In color this would cost $17 to $24

With a 160 page book, priced at $24, with a 25% discount, the publisher would earn just $1.00 for each book sold.

So, introducing color and adding $9.00 to the list price of the book turns an $8.00 per book profit into $1.00.

In order to earn the same $8.00, the publisher would have to price the 160 page book a little over $33.

The workflow that will allow color inserts [a limited number of color pages] to be added to a black and white POD book. Running some black and white pages through a color printer at a discount might make sense to a publisher, but it would be hard to track and even harder for the printing company to justify. This makes color printing only viable for higher priced titles.

If the publisher can justify a $40 cover price for a 160 page book by adding color, then the profit leaps to $13 per book at a 25% discount.

Page 1 of 2 | Page 2 of 2 - Comparing Print Costs

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