Consider this a retraction and clarification of the following point on my blog from yesterday about what traditional publishers may still be able to do better:
Online paperback distribution at good prices: While indies do have the option of expanded distribution to all online book retailers that traditional houses do, in my opinion, trad pubs still have the advantage here. And that advantage comes in price. They can produce books more cheaply, and therefore, they can offer larger discounts. (For example, if I were to open expanded distribution on Charlotte Collins, I would have to raise the price in order to account for the new retailer’s cut. If I raised the price by $3, I would actually make half as much money per book at other retailers as I do now using only Amazon.com and my personal store with the price at $9.99.)
Upon further research I discovered that CreateSpace, the printer I use, pays royalties based on the list price set by the author. That means if the retailer decides to discount the book, the writer still gets paid based on the list price, not the discounted price. So if I set the price of Charlotte Collinsat $13, which I’d have to do in order to make up for the additional retailers’ cuts, and then that retailer discounted the book back to $10, I would still earn the royalty on $13.
Now, it might sound a little petty to be quibbling over $3, but there are much tighter tolerances on paperbacks than ebooks. The sales price has to account for the printing costs, CreateSpace’s cut, and the retailer’s cut. CreateSpace is an Amazon company, so they have a better deal with them naturally. Selling the same book at BN and other retailers costs more. When I whittle it all down, I’d still be making less per book at the additional sales channels, but in return I gain distribution, which is important.
As I’ve said from the beginning, it is important to me that my book–and any I release in the future–are priced right. I have bought innumerable books in my lifetime, and I know how expensive it can get. So I’m trying to find the balance between distribution, price, and royalties, and I wanted to share that information with other writers out there too.