Are publishers aiming for volume sales, rather than profit?

[Brian G Turner]

I've noticed a really odd thing, especially over the past year.

Best selling novels are being sold at such a knock down price, it can only make sense if publishers are trying to manipulate sales volume stats, rather than make a profit.

For example, check out these ridiculous paperback prices:

The Girl on the Train by Paul Hawkins - £3.00
Game of Thrones by George R R Martin - £4.00
The Martian by Andy Weir - £3.85
Gone Girl by Gillian Flynn - £3.85

My observation is that paperback novels are commonly priced at anywhere between £5.99-£7.99. So why are these bestsellers being sold at such a knock down price?

If publishers were chasing profit, they wouldn't be charging £3-£4 for a novel, no matter how popular.

Even if the sales have already peaked for each book, it makes absolutely no business sense - unless the publisher has printed such a huge volume of each, and needs to get rid of the inventory.

But The Girl on the Train isn't even available in paperback yet - it's still on pre-order.

In the past, sales volumes of books has been artificially boosted by super-popular authors such as JK Rowling, Stephanie Meyer, Suzanne Collins, and EL James.

The result is that in the year after such a sales boost, there'd be a reported decline in sales - and the accompanying claim that book publishing must therefore be dying.

And yet, I can think of no better way for a publisher to attack their own profits than to sell their best selling titles at ridiculously low prices.

Additionally, unless their authors have been granted spectacularly good royalty rates, they are going to get screwed by the % of such low prices.

All I can think of is that publishers are purposefully trying to manipulate unit sales figures, in order to reassure investors, even at the expense of making a profit.

That doesn't make particularly good business sense to me, either.

Or have I misunderstood something profound and obvious?

 

[millymollymo]

But what better way to grab a new reader than with a loss leader...that's not really a loss? Is it possible they've selected books which have already hit the target and all that's left is mostly profit?
There's also a focus now in marketing to shift toward gifting - as in festivity purchases, (not Christmas as I understand it) and donations for 'the school/charity/work raffle. People tend to buy "Under £5 gifts" Which prices most books well out the range.

 

[psychotick]

Hi,

Looked at the first three. It's wierd. The Girl On The Train isn't yet released until 5th May, so presumably they're just making it cheap until it's released - perhaps a bargain for early buyers? The Game of Thrones Book One is messed up - note it's the kindle edition in the headings and titles but listed as paperback in the buyer's columns. Not sure what's happening there - but would point out it's Book One - and a cheap loss leader might get people to buy Book Two. The Martian book looks as though it's been set at that value deliberately. Maybe Andy has a new book coming out?

Cheers, Greg.

 

[ctg]

Maybe Andy has a new book coming out?

He has. Cannot remember what was it about.

 

[Jo Zebedee]

He has. Cannot remember what was it about.

A thriller on the moon, I believe. Might be detective.

Anyhow, it depends a lot and all lies with margins. Were these seen in retail or on Amazon. On retail, shops will always run loss-leaders to compete with others. I can't remember the last time The Guinness Book of Records made much profit for anyone, but it brings people in and they look for the competitive price.

With ebooks, it's all profit anyway, so they can afford to discount heavily and go for volume.

But, if it's a big enough title and enough people want it, yes, sometimes it will go for less than cost in order to bring people either to the author, or to the retail environment it's being sold through (so, eg a publisher's web site.). And, of course, getting a book into lots of hands and some word of mouth spreading will come back in the long run.

Sometimes, retail isn't about the unit profit, but how you draw people in.

 

[Brian G Turner]

Sometimes, retail isn't about the unit profit, but how you draw people in.

The thing is, the books I find being the most discounted are those that have already hit the NYT best seller lists.

In other words, publishers are discounting their biggest-selling lines - ie, those with proven sales volume.

 

[ratsy]

It does seem absurd, but they can't be making much less on those than they are with the massive box store buys like Costco here who sell for less than anywhere, but buy skid loads of them.

Funny thing is I've read The Girl on the Train, Game of Thrones, and The Martian, and Gillian Flynn's other two books.

 

[Jo Zebedee]

The thing is, the books I find being the most discounted are those that have already hit the NYT best seller lists.

In other words, publishers are discounting their biggest-selling lines - ie, those with proven sales volume.

Yes, which already have word of mouth. Firstly, they'll be cheap to produce because of volume. But, secondly - what else do they entice the consumer to buy? More books? How many have advertisements for other books at the back of them? Or a link to the website of the publisher. If you can get a product into the hands of lots of consumers - and a book that's going a flyer will do that - then it's about what else you can use that to sell.

 

[Wruter]

The national bestseller lists are a world apart from the rest of publishing and book selling. Those cutthroat prices are determined not by the publishers but by the retailers, primarily the supermarkets, whose buyers have the publishers bent over a barrel. The Martian is not a science fiction novel it's a movie tie-in. A Game of Thrones is not a fantasy novel it's a TV tie-in. Different world, where angels fear to tread and all that.

 

[Brian G Turner]

If you can get a product into the hands of lots of consumers

This is what I can't get my head around, though - these books are already selling, and in large volume. Consumers are buying these books regardless of any discount.

If publishers were following this strategy with less known writers it would make sense to me - but not with books that are already bought.

Perhaps I'll just have to admit that I don't understand retail.

 

[Gary Compton]

If you have the volume, you can get a book printed and delivered for 50P.

 

[Gary Compton]

So at £4, Amazon take say 30% that leaves £2.80 for author and publisher.

Lets say publisher gets 66% and they sell 50,000. That is actually a good return bearing in mind the authors share will pay back the advance.

 

[tinkerdan]

My uneducated guess is that for these books the authors advance has been met and the publishers cost have been covered so anything sold beyond this point is almost pure profit: minus the paper it's printed on. When you start looking at such an offer as being more an advertising campaign than anything else; it all starts to make some crazy sense.

 

[ratsy]

It is an interesting fact that they are all now have movie or television adaptations as noted above. I wonder how this plays into it? They have all sold an awful amount of books by this point as well. I mean, if the publisher sells another million copies and profits a buck a unit, then they have a million dollars. Not so bad.

 

[Lew Rockwell Fan]

FWIW, I believe some of Patrick O'Brien's Aubrey/Maturin novels were given away in hardback to anybody who dropped the publisher a postcard asking for one. There may be details I've forgotten. I have no idea how much that contributed to his success.

 

[Ray McCarthy]

Profit. Price is based on what they think return x number of sales. Hence "Go set a watchman" or the latest G.R.R. Martin are priced higher. Romance (one of biggest market and the main value of a title is that it's unread) are priced lowest.

 

[Brian G Turner]

I think it's like asking why Cornflakes are discounted from time to time, when they're already popular. Because consumers look for it, and it brings more sales in the longterm.

Publishers making one-off discounts I can understand. I just can't understand discounting their most popular product lines in perpetuity.

I know you've long experience with retail, though, so I'm not trying to argue against you. I just worry publishers routinely selling their best-selling paperbacks at less than £5 may be a lose-lose race to the bottom.

Discounting ebooks I could understand, where production costs and potential losses are minimal. But discounting paperback bestsellers, even with large volume production minimising costs, comes across as a way only to improve unit sales rather than increase profits.

I mean, would The Martian really have sold significantly less if it was carried the low price of £4.95, instead of the steep discount of £3.85?

Perhaps it would have - perhaps publishers have their own algorithms, like HMRC Treasury does, to calculate how different rates predict different income levels.

Without that knowledge, I struggle to see the business sense in it - certainly by a publisher as opposed to a bookseller.

But I'll just sit here, scratching my head about it.

 

[Jo Zebedee]

Yes, it would have sold less. £3.85 is a significantly different price point than almost a fiver. It's less than a magazine. When a consumer is standing with their trolley trying to decide what merits a purchase, over a quid is significant.

They will not be selling it at a loss. The unit price will be low. Shipping will be the main expense after that. They do deals with the retailers - who may agree a low margin for that, but a higher margin for other stock in the same order.

If a publisher wants to be stocked in a supermarket chain they have to agree the market's margins. If that is a low margin, it might well be worth it in order to get their lines listed, and the exposure. But the market drives the price, just as it does for milk, and food and anything else we buy in a supermarket. The option is not to have the title there, and that would be crazy - because more volume and exposure comes from the supermarket than anywhere else.

I don't see it as an issue at all. I see it as market forces - and in this case, the supermarkets are king. If they want a low margin, they'll get it.

 

[Brian G Turner]

They do deals with the retailers - who may agree a low margin for that, but a higher margin for other stock in the same order.

That makes sense - that this isn't an isolated strategy, but part of a wider approach. Cheers for that.

 

[pambaddeley]

The national bestseller lists are a world apart from the rest of publishing and book selling. Those cutthroat prices are determined not by the publishers but by the retailers, primarily the supermarkets, whose buyers have the publishers bent over a barrel. The Martian is not a science fiction novel it's a movie tie-in. A Game of Thrones is not a fantasy novel it's a TV tie-in. Different world, where angels fear to tread and all that.

True. A little while ago, The Martian was being given away free with the DVD in Sainsburys (supermarket).