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Step Three - Book Pricing (An Exercise)

© Donna Murphy

You can determine a price for you book by using two methods. The first method is by far the easiest. You take the unit cost of your book and multiply it first by 5 and then 15. This gives you a range to determine where the list price of your book should fall. The unit cost to produce your book is determined by dividing the total cost to produce the books by the number of books produced.

Example: $5,000 / 3,000 books = $1.67 per book (Unit Cost)

Once you have your unit cost, then you multiply it 5 to obtain the minimum and then 15 to obtain the maximum. This determines the price range in which to place your book.

Example: Unit Cost * 5 = $1.67 X 5 = $8.35 (minimum price)

Unit Cost * 15 = $1.67 X 15 = $25.05 (maximum price)

The benefit of using this formula is it's quick and easy. You get an idea of where your book needs to be priced in order to see return on your investment (ROI).

However, by "simply" using this formula to determine pricing for your book, you've left out some very important factors in the book publishing process - your costs. So far, you have been working through the self-publishing process with minimal to no costs - hopefully. But, you will still be acquiring some costs such as:

ISBN acquisition ($195)

Editing costs ($200)

Cover design ($500)

Printing costs ($5,000) - using example above

Marketing costs ($2,700)

After totaling these costs ($8,595), you come up with what Brian Jud of Marketing Directions calls, "Direct Unit Costs." Make sure you divide this by the number of books produced to receive the direct unit costs = $2.87.

Example: $8,595 / 3,000 books = $2.87 per book (Direct Unit Cost)

Brian recommends using a pricing formula that he says "determines a more profitable list price." This formula is made of three variables: Direct Unit Cost, Distribution Multiplier and Profit Factor.

Direct Unit Costs is the costs involved in producing your book and includes all overhead costs associated with it.

Distribution Multiplier is used if you plan to distribute your book through the normal channels of distributors, wholesalers and/or retailers. The list price of your book should take this discount into consideration. Remember when you use the traditional means of distribution, you will be expected to give a discount of 55% or more. The distribution multiplier is:

Discount(Multiplier)

40% (1.67)

50% (2.00)

55% (2.22)

60% (2.50)

67% (3.03)

70% (3.33)

Profit Factor will allow you to decide how much profit you want to make from your books. The factors are:

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