Thursday, August 17, 2006

What Discounts Should You Give to Bookstores?

Rules of Thumb: Note the question. What discounts should you give ...? You're supposed to set the terms for various classes of customers, and then you let the customers (the stores) determine whether they want to play ball with you. However, your terms need to be in the ballpark. Use the following as a rough but reasonable guide:
  • 20% discount--to resellers who buy a single copy of your book at a time, payment made if possible with their order. Large bookstores (e.g., Barnes and Noble) will order books for their customers (special-order) from you on this basis. They pay the shipping. (Generally, resellers don't make money on this discount. They are doing a service for their customers.)
  • 30% discount--to resellers (though not distributors) who agree to sell your books on consignment. Payment is made after the sale by the reseller, practically speaking on their timetable. You pay the shipping. With this deal, resellers accept a lower-than-normal discount in return for not having to tie up their money on inventory.
  • 40% discount--to resellers who order multiple copies at a time. This is the standard in the bookselling business. Normally, you would set up an account for these booksellers and invoice them for whatever they order. Usually, they pay the shipping. However, they expect to be able to return books that they don't sell--and they will.
  • 50% discount--to resellers who order multiple copies at a time, pay for shipping, pay upfront, and agree to no-returns. This not standard, but it is a deal I would accept as a publisher in a second--because of the upfront payment and the no-return agreement. And if I were a bookseller--and confident of my sales--I would love it as well.
The discounts may seem high, but retailing is a tough business. Retailers need that 40% discount (at least) in order to keep their shelves stocked. And you're almost always better off selling your books direct to your readers. The Publishing Pro.

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