Print On Demand - Economics

Economics

Profits from print on demand publishing are on a per-sale basis, and royalties vary depending on the route by which the item is sold. Highest profits are usually generated from sales direct from the print-on-demand service's website or by the author buying copies from the service at a discount, as the publisher, and then selling them personally. Lower royalties come from traditional "bricks and mortar" bookshops and online retailers both of which buy at high discount, although some POD companies allow the publisher or author to set their own discount level. Unless the publisher or author has fixed their discount rate, the higher the volume sold the lower the royalty becomes, as the retailer is able to buy at greater discount.

Because the per-unit cost is typically greater with POD than with a print run of thousands of copies, it is common for POD books to be more expensive than similar books that come from conventional print runs, especially if that book is produced exclusively with POD instead of using POD as a supplemental technology between print runs.

Book stores order books through a wholesaler or distributor, usually at high discount of anything up to 70 percent. Wholesalers obtain their books in two ways; either as a special order where the book is ordered direct from the publisher when a book store requests a copy, or as a stocked title which they keep in their own warehouse as part of their inventory. Stocked titles are usually also available via sale or return, meaning that the book store can return unsold stock for full credit at anything up to one year after the initial sale.

POD books are rarely if ever available on such terms because for the publishing provider it is considered too much of a risk. However, wholesalers keep a careful eye on what titles they are selling, and if authors work hard to promote their work and achieve a reasonable number of orders from book stores or online retailers (who use the same wholesalers as the bricks and mortar stores), then there is a reasonable chance of their work becoming available on such terms.

Although returnability lessens the risk for book stores and helps POD authors get through the door, such authors should also realize that there is only a certain proportion of stock that can be returned.

This difficulty with lack of returns can make bookstores less enthusiastic about POD books. This though is set to change in the future, as the industry is currently debating a move away from sale or return altogether, which will do much to even things out.

Another issue with print-on-demand titles is the fact that they are often debut works. Many book stores are reluctant to take a risk on an author's first, untested work without the endorsement of a commercial publisher.