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eBook break-even…

08.15.2011, Uncategorized, by .

eBooks are the growth vehicle for book publishers today. But still many are hesitant to spend the money to convert their backlist. I understand it can be an expensive proposition especially if the backlist is extensive. Some go direct to Amazon Kindle and B&N nook. These companies will do it for free or will take a higher % of the sale to pay for the conversion, But the publisher doesn’t own the files.

eBooks are great because once the initial costs are recovered, the incremental costs are minimal. So once the break-even if achieved, almost 100%of the revenue will go to the bottom line.

How long does it take to break-even?

Assume $1,000 to convert and distribute an eBook. If it is all text, it will be 30% of that, but let’s use $1,000 including QA costs and time.

Agency pricing — $9.99 retail delivers $7.00 (70%) to the publisher. At that rate, the break-even is less than 150 copies. If the price is $4.99, then $3.50 is generated per sale and the break-even is less than 300 copies.

Wholesale pricing works pretty much the same. List the book at $14 and collect 50% or $7.

If a publisher sells to libraries, the entire conversion cost could be recouped just in that channel. Then ALL retail sales would be profit.

It actually is a good time to be a publisher.


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