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
We will look at the Economics of Print on Demand in two parts:
- Understanding Printing Options
- 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
- 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.
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
- 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
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.
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
Page 1 of 2 | Page
2 of 2 - Comparing Print Costs
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