How to create a publishing budget

How many books should you print?

Our authors often ask us this question and the answer is always different. There are a few factors that will affect how many books you are going to print such as your format (hard or softcover), estimated market size (sales projections), access to your market and maybe the most important of all especially if you are self-publishing, your budget. There is one very important question you have to ask yourself when deciding on a print run: how am I going to recover the money I invested to publish this book? In order to do this, you have to print the right number of books and sell them at the right price. So, how do you figure out all of this?

You start by working out how much it costs you to produce one book. You can work this out by counting your publishing costs (editing, design, proofreading, etc.) and printing costs together and dividing this amount by the number of books you are going to print. This will give you your cost price per book. Let’s look at an example:

Publishing costs + printing costs/number of books to be printed

= R 25 000 + R 25 000/1000 books

= R50 000/1000 books

= R 50

Now you know how much it costs you to make one book. Your recommended retail price (RRP) needs to cover this cost and make you a little bit of money. In addition to these costs, you also need to work out marketing and distribution costs. Marketing costs can be tricky to calculate, as these costs might be spread over a period of time and you might not know what they all are right away. If you are using a distributor, they will take a cut (%) off your retail price and if you are selling through a bookshop, they will also take a % off the recommended retail price. And don’t forget about VAT! 

As a self-publishing author, your sales will be split between trade sales (sales through bookshops) and direct sales (sales made directly to the reader). For the examples that follow, we will be working with print book sales only. 

Let’s look at a calculation for trade sales and direct sales.

Now that you know how much you are going to make through each sales channel, you have to calculate your break-even point. This refers to the number of books you need to sell to break even via each sales channel.

Let have a look at how this is calculated below:

As you can see from the calculations above, you need to print more if you are going to use the trade sales channel. This is because of the discounts given to the bookstore and the distributor. For self-published authors, it is best to utilize trade sales and direct sales. Direct sales will give you more profit per book but trade sales will give you greater exposure.

What else can influence RRP?

One very important thing that should also inform your RRP is the genre’s price ceiling. This refers to the price your audience is willing to pay for the book. It is important that you know what the price ceiling is for your type of book (genre and sub-genre), as you won’t make many sales if your reader thinks it is too expensive or too cheap. A quick look online or at your local bookstore should give you a general idea of what the price ceiling might be. However, if you are serious about sales, you should do a competitor analysis on a fair amount of titles similar to yours. The more information you have, the sharper your competitive edge will be!

Woman in bookshop browsing for books

If you have worked out your costs and researched your market, you will be able to make an informed decision about how many book you should print. As you can see, guessing how many books to print is not the best idea. At Staging Post, we will help you figure out the basics by giving you a publishing budget template. This template will help you work out the costs, profits and breakevens for your book.

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