Hi! I’m Dale Beaumont and welcome to Get Published TV. This is the only dedicated show on the internet to help authors and aspiring authors to write, publish and market their own bestselling book in 8 minutes a day or less. Now in yesterday’s episode, we actually spoke about the book industry food chain. And we spoke about the process about book goes through from author right through into the consumer. So, to quickly -- just put it up here again as a point of reference, we’ve got five kind of into these in the food chain, we have authors, publishers, distributors, bookstores and consumers. Now, what I wanted to explain to you is where does the money actually go? Because if you can understand this whole process. It’ll kind of help you in making decisions as to which way do you want to go. What is going to be you're publishing model? Are you going to self-publish or are you going to go through a major publisher. That’s a kind of a whole lot of conversation which we’re going to talk about on another video, publishing versus self-publishing and going through the pros and cons of each. That’s not really the purpose of this video but just to go through now and explain where the money actually goes. Around about 10% actually goes to the author typically. I’m going to go through and explain to you how it generally works. There are some variations or exceptions to this which will kind of explain at the end but just stick with me for a moment. Then with regards to the publisher, the percentage that normally goes to them is about 25%. So already, we’ve kind of lost about 35. So the consumer obviously pays full price. They pay a hundred percent of whatever the book is whether its 19.95 or 24.95, we’re going to call that a hundred percent. So, if 10% -- if this book is 19.95 then basically two dollars goes to the author. And that’s normally paid to them as a royalty income from their publisher. That’s if they go through a publisher but if they self-publish it works a little bit differently because again they’re taking positions one and two. But let me just continue this conversation, we’ve got 10% that goes to the author. About 25% that goes to the publisher and then we have around about 15% that actually goes to the book distributor. Now, for most publishers, most publishers are actually publisher-distributors. They do both. So, therefore they're making 40% of the recommended retail price, so about 40%.
So, just doing some quick if its basically -- a book sales for $20 then they’re making around about $8 in this particular transaction and you’re getting paid $2 only here. And therefore the bookshops normally take the other 50%. So, here we have 10%, 40%, 50%, added together, then the consumer pays the 100%. So, sorry, I kind of got a little bit lost here with this one so let me just draw this out. The 25%, he is the author, he is the publisher, he is the distributor and this is the bookstore. So that’s typically how it actually works. Now the question that you could asked yourself is how much of this pie do you want to walk away with? Now, what we’re going to look -- there's a couple of different scenarios that we can look at again. This is only through bookstores because if you're going to be in the market and selling books directly and there are ways to cut out some of these people in the middle then the numbers totally change. We’re going to have that conversation in the future episode but right now, let’s stick with the traditional way of selling books which is through bookstores. There are hundreds of other opportunities to sell books in different locations but we’re just going to talk about bookshops right here.
So, do you want to just get 10%? So if you go through a publisher, you're going to generally get a 10% royalty. Now, if you're a first time author, it can actually as low as 7% or if it’s a book where there's going to be a lot of cost involved from the publisher, they could even be 6% or 5%. But seven is probably on the low side. If you're maybe a J.K. Rowling or a Stephen King or a Dan Brown then you can probably -- maybe demand 12, 13, 14 maybe 15% of the recommended retail price because just by putting your name on that book, the book is going to sell half a million or a million copies just because of your name. So therefore you can probably demand a lot more. But the standard is normally about 10% of the recommended retail price. So they sell it for 20 bucks, we’re talking $2. If it sells for $30, we’re talking about 3 bucks. Then here we’ve got the -- that’s if you go through a publisher then the publisher -- you get this one here, the publisher will get this combined, again combined that’s about 40% and the bookshop gets 50%.
If you then want to self-publish, the numbers then change because again, you're actually now getting access to the first two. You now have got -- you're getting the money from the author and you're also getting the money that would normally go to the publisher, because why? You are now the publisher, hence, why they call it a self-published author. So therefore you're actually going to get -- if you add those two together, 35% of the recommended retail price, 35%. Now, if you're -- say so, you're book selling for say $30 then you're going to get like $10 or maybe $9.50 or something along those lines. So do your numbers based on what you think your book can actually sell for. So, now you maybe really excited at that point and say, “Wow! Ten bucks, that’s a whole lot better than three bucks.” And yes it is, but you’ve got to remember, out of that $10 you then need to take all your expenses because again you're the publisher so therefore you're the one that’s paying for editing, proofreading, typesetting, graphic design for the front cover and also paying for the printing of course and the warehousing and you know, where you are going to hold that stock and insurance in those type of expenses. So therefore, on your first print run, I’m beginning a little bit technical right now, your gross income is going to be 35% of the recommended retail price. You might for your first print run only walk away with 10% because even though you're making 35%, you're actually going to be spending 25% on cost to recoup all of that money that you’ve actually outlaid. So instead of making 35%, you actually got 25% worth of expenses therefore you're only making 10. So you may say, “Well, why would I want to self-published?” Because that’s exactly the same then as going through a major publisher because I am only getting 10% both ways.
However, where it changes is two fold. The first is, after you do your first print run, all those cost of editing, proofreading, typesetting, graphic design have all been already covered, they’ve all been absorbed into the money that you’ve -- you haven’t got paid the first time around. Because they're already done, the only cost that you then have is your printing cost. And if your printing cost are quite low, maybe, you know $2 per book or $2.50 therefore the numbers then change the second time around and then every future print run thereafter, you're actually going to be making 35%. But instead of your cost being 25, costs are now going to be 10% approximately. So therefore you're actually getting 25% profit if you're actually going to be self-publishing and the second reason why I’d want to do it is -- so therefore you're making more money per book sold in bookstores but if you're actually then going to sell your book direct to consumers then this whole thing changes because you're then going to get a lot more of this pie other than your cost to printing which maybe $2 or $3. If you're book selling for $30 or even $20, you're still going to be getting somewhere between 80 to maybe even 90% profit and if you went through a publisher you would be actually -- you know, you'd have to buy your books back from your publisher and they would not be giving them to you at cost price, that’s for sure. You'd probably be buying the books at maybe at 50% or maybe a 60% discount.
Now, I think I’ve gone through quite a lot of detail with you, maybe I bamboozled you with the numbers but now you can actually see the breakdown of where the money goes and now you're going to ask yourself the question, “Well, which part of that pie do I want to pick up on? Do I only want to be an author and just get the 10% or do I maybe think that I have what it takes -- is to be a self-publisher and therefore on each book sold in bookshops, you're going to actually going to make more money.” Now, don’t just rely on these figures alone to make that decision because there are actually a number of different factors. This is one factor that you need to consider from monetary terms. There are a bunch of other reasons why you want to go with the publisher or why you don’t want to go with the publisher. So please keep Get Published TV because I’m going to have that conversation with you in the near future so keep tuning in because that’s going to be a really important episode to help you make the best decision for you and your book. This is Dale Beaumont from Get Published TV. Thanks for watching. See you again next time.
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