Quoted vs. actual manufacturing cost for print books

Maybe I'm missing something here, but it seems like the predicted manufacturing cost of print books (http://www.lulu.com/create/books) differs substantially from what you are charged.

 

For example, my 2012 book, http://www.lulu.com/us/en/shop/tristan-eifler/the-lycanthrope-club-book-i-full-color-edition/paperback/product-20534405.html , costs 23.41 USD to print. It is an 86 page, full-color, 8.5 x 11" perfect-bound paperback; it is available for retail distribution. If you plug those numbers into the 'create' page the manufacturing cost is listed as only 17.56 USD per book for premium paperback. Have the print costs changed or do the quoted manufacturing costs vary from the final cost for some reason? If it's the former, I'm being overcharged on the print costs for my older books!

Comments

  • You are not being overcharged.

     

    There is a huge difference between manufacturing cost and the final retail price or even the author cost price. My manufacturing cost for some books is $5 and the retail cost is over $12.

  • What is the difference between Lulu, wholesale, and retail prices?

    by Moderator on ‎01-25-2010 03:43 - edited on ‎09-04-2014 03:30 by Community Moderator Glenn_Lulu Community Moderator (4,741 Views)





    Print Books

    Assume you have written a book for a very specialized market: The Essentials of Underwater Firefighting. The cost of printing each book (# of pages + binding + labor) is $5.50.

     

    When purchasing your book, the Author price = (manufacturing cost + applicable taxes + shipping) - (coupon and/or bulk purchase discounts)

     

    If you publish your print format book without an ISBN, you may sell it in the Lulu Marketplace at any price above the book's manufacturing cost. This is the direct to consumer Lulu price.

     

    If you choose to publish your book with an ISBN, you must comply with accepted wholesale and retail (list) distribution pricing guidelines. The example below describes how these prices are set.

     

    Wholesale Price

    In this example, “Wholesale Price” refers to the minimum price at which you are willing to sell your book to retailers, who will in turn sell it to their customers for a profit.

     

    You determine your minimum acceptable royalty per book is $4.00. The overhead cost, or Lulu commission, is $1.00 per book.

     

    Manufacturing Cost + Royalty + Lulu Commission = Wholesale Price per Book

    From our example: $5.50 + $4.00 + $1.00 = $10.50 per book

     

    Since manufacturing costs are somewhat out of the author’s control, this pricing example relies on your decisions about the minimum royalty you wish to make from each retail purchase of your book.

     

    An author should also consider that while you may be earning a smaller royalty per book when offering it at a wholesale price, you could eventually earn more income from higher book sales through retail channels.

     

    Retail (or List) Price

    The generally accepted retail pricing formula is: Wholesale Price x 2

    From our example: $10.50 x 2 = $21.00

     

    When you decide to offer your work to retailers at wholesale prices, it is with the understanding that the retailer expects to sell your work at a price sufficient to cover their costs and still make a profit – even if the retailer chooses to offer your work at a discount.

     

    Once your Book is published, you can view and edit your retail pricing. Go to My Projects and click on the project title. Scroll to the Pricing and Creator Revenues section and click Edit to adjust your retail pricing.

     

    eBooks

    Setting prices for eBooks is slightly diferrent, mainly due to there being no production costs as with print books.

     

    Enter your retail price in the pricing step of the eBook publishing wizard and we will display the pricing breakdown for each selected distribution outlet: Retail Price, Distribution Fee, Lulu Commission, Author Revenue.

     

    Some retailers, such as the Apple iBookstore, require prices to end in .99. If you choose the iBookstore as a retail distribution option, we will automatically adjust your price to the nearest acceptable price based on Apple's pricing tiers for each currency. To view these pricing tiers, see our Apple iBookstore retail price calculator.

     

    You may notice that your revenue amounts change based on the retail sites you select to distribute your book. That is because some retailers (Lulu, Apple, and Barnes & Noble) act as sales agents meaning they sell your eBook at the price you set. They then take a commission based on that price, typically 30% of the retail price. Other retailers (Amazon, Kobo) operate as resellers. This means they pay the wholesale price to a distributor when your eBook sells. Since these retailers are buying your book from a middle man at a set price, they can resell your eBook at any price they choose, including a discounted price.

     

    Under the reseller model you will always make the same revenue as displayed in the retail pricing step for each book sold by that retailer, regardless of the sale price.

     

    Once your eBook is published, you can view and edit your eBook's retail pricing and distribution options from the My Projects page by clicking the Manage button displayed next to the project title.

     

    IMPORTANT NOTE: When you select Kobo and/or Kindle distribution, all other selected retailers (except Lulu and the iBookstore) convert to the reseller revenue model.

     

    What is a Suggested Retail or List Price?

    The wholesale price you set for your book is the price retailers pay to purchase your book for resell from their sites, stores, or shops. The suggested retail price includes a price mark up sufficient to cover the retailer’s labor, marketing, rent, utilities, and other fixed costs associated with owning and running a business. The retailer may choose to sell your work at the full retail price ($21.00 from our example above), they may offer a standard discount (such as free shipping), or they may run a special for a defined period of time (such as 25% off all books purchased that month). The selling price set by the retailer has no effect on royalties you earn from selling your book at the wholesale price – in other words, if your Retail Royalty is set at $4, you will make $4 for every book sold in retail channels, even if the retailer offers a discount.

     

    For more information about Retail pricing requirements, see: How Retail Prices are Determined



  • So the price quoted here: http://www.lulu.com/create/books is always inaccurate even if you just wanted to purchase it for yourself? At the Author price? It only includes, say, the materials cost but not the labor or binding cost; the total of which aren't quoted until the project is complete? (not counting shipping, of course)

     

    Lets say I wanted to buy the aforementioned book for myself.  It would cost around 23 dollars (again, not including shipping). The 'create' webpage states that the cost per book for a project with the same specs would now cost around 17 dollars. I originally assumed this cost already took into account price per page, labor, binding, a little extra so it's still profitable for Lulu i.e., the  cost for the book if you purchased for yourself at the Author price. I don't think taxes are as high as 25% and if the initial quote only includes some of the manufacturing costs, it's very misleading and needs to be changed and/or clarified. 

     

    More importantly, this price determines how much you can make on sales on the Lulu marketplace or Amazon if you distribute your product. After all, you, the author, are the one who sets the price over the base, with Lulu (and possibly Amazon) taking a cut (I was very much aware of this).

     

    Still a little confused here. 

  • I think Maggie misunderstood your question.

     

    Production costs did indeed go down last year for all books printed in the USA.

     

    Here is a link to the Announcement:

    http://connect.lulu.com/t5/Lulu-Announcements/Release-Notes-2014-13/td-p/292674

     

    Here are the important parts:

    Lower Pricing for US Authors

    Lulu is excited to announce an agreement with a new US print vendor that allows us to reduce binding and per page costs for all paperbacks and hardcovers (excluding photo books and calendars). Rather than Lulu pocketing the difference, we are passing these savings along to our US authors and their fans.

     

    US Authors will see the greatest savings in our Value line products, which will now be printed using ink-jet technology. This technology allows for drastically reduced pricing for both black & white and color printing. For example, a Value Line, 6”x9”, perfect bound book with color interior will now have a base price of $1.25 plus $0.045 per page.

     

    Base and per page prices for our Standard and Premium products printed in the US have also been reduced.

    IMPORTANT NOTE: Lulu hopes to extend these savings to our international authors by either negotiating with our current print vendors or by identifying new vendors with ink-jet technology capabilities.

     

    How can I take advantage of these new prices?

    If you have wanted to make changes to your published work, now would be a great time to revise and republish your book. The new pricing structure will be applied to the revised project.

     

    If your book is already perfect, log into your Lulu account, go to My Projects, and click on a project title. On the project details page, click the Edit button next to your book’s price.  Edit the book’s price by as little as one penny and save the change. The new pricing structure will be applied. You can then reset the retail price based on the reduced manufacturing cost.

     

    The fine print

    • The new pricing structure applies to books created and sold in the US store.
    • Ink-jet printing is only available for Value Line books printed in the USA.
    • Value Line books can only be sold from the Lulu.com bookstore, through direct sales, or self-purchase.
    • There are no bulk discounts for purchases of Value Line books manufactured in the USA.
  • Awesome! Thank you. I need to pay closer attention to those announcements...

Sign In or Register to comment.