Comment by conductr
15 hours ago
Regarding cost per unit. I think the publisher likes this type of partner because they can really get their initial order volume up high without much risk. This allows them to have a super low cost per unit, maximizing profit, from the start.
Yup, and the “industry standard” wholesale discount publishers give to e.g. bookstores is usually 55%
That seems like an incredible discount. Can I assume then that bookstores are competing against each other via very minute (perhaps one or two dollar) price discounts while still maintaining a high profit margin?
I worked at a publisher back around 2010.
The unit cost for the publisher to put a $20 AUD book on a shelf in a book shop was about $2 AUD.
The bookstore kept quite a bit of that margin - $10 or so - but they had to pay rent & staff a store. If they were only selling $500 worth of books per day, it wouldn't have mattered if their margin was 100%, the fixed overheads would eat it all. If they could keep stock turning over quickly, the profits were impressive.
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When it comes to bookstores you can safely assume they do not have high profit margins.
In the Netherlands competing with discount is actually illegal, interestingly enough. The selling price is fixed. Which is a boon for smaller bookshops, but annoying for publishers if the production prices aren't stable.
> initial order volume
None of the books you get through this program are new releases. But they are printed special for imagination library.