Home
>
Writing
>
Retail Margin, Trade Discount, and What it Means for the Author

Retail Margin, Trade Discount, and What it Means for the Author

DEFINITIONS

Retail margin is basically the difference between your book's wholesale price and your book's retail price. For example, a book with a cover price of $10 and a wholesale price of $5 has a 50% retail margin.

Wholesale price is the cost of your book to a retailer. To use the same rudimentary example, a book with a cover price of $10 and a retail margin of 50% will be sold to a retailer for $5.

Retail price is the same as cover price or selling price. This is the cost of the book to the end consumer (the reader). The retail price is typically printed on the cover of the book and also "embedded" within the barcode on the back. For example, a book with a wholesale price of $5 and a retail margin of 50% will have a retail price of $10.

As you can see, retail margin, wholesale price, and retail price are interconnected. By having two figures, the third can be calculated.

The fourth definition to be aware of is the trade discount, which is the percentage off the retail price that a wholesaler or distributor pays for your book. Since the retail margin is a portion of the trade discount, the trade discount always exceeds the retail margin. Distributors typically expect between 50% - 70% in order to provide an acceptable margin to the retailer.

MAKING DISTRIBUTION WORK FOR YOU

It should come as no surprise that the amount of distribution your book enjoys rests largely upon its trade discount. Generally, the higher the discount, the greater the distribution.

Think about it - distributors want to make money, too. So do retailers.

While your book's trade discount is but a piece of your pie (albeit a big piece), it is the entire cake for distributors and retailers, who together must split the take. The greater the number, the greater incentive they have to distribute your book, sell your book, and market your book, etc.

The proper trade discount depends upon each author's intentions, and can vary from author to author just as readily as from book to book. Obviously, the higher the retail margin, the higher the cover price, so authors interested in maintaining the lowest cover price possible will often opt for a lower retail margin.

Conversely, those authors who long for the best distribution possible will elect a higher trade discount, even though their cover price will increase accordingly (or their profit will decrease accordingly). Non-fiction or niche-markets are less affected by higher retail prices and greater distribution is often advantageous in finding those markets.

Often, the author will have little to no say in what trade discount to offer for their books -- its whatever the distributor mandates.

Trade discounts can be as low as 20% to successfully get listed on Internet retailers like Amazon.com, who manage to make a profit with such low margins through EDI (electronic data interface) with distributors like Ingram and on-demand publishers like iUniverse and Outskirts Press.

By comparison, trade discounts can be as high as 75% - 80% when dealing with a niche wholesaler, or when attempting distribution for a book that does not have a proven market. In these cases, the distributor may be padding the coffers a bit in anticipation for a "harder sell" and perhaps, also, in preparation for offering an increased retail margin to close the deal.

INDUSTRY STANDARDS

Industry standards for retail margins are difficult to define because, ultimately, it comes down to negotiation between all parties involved. Publishers have the power to negotiate with distributors, who have the power to negotiate with retailers, who have the ability to negotiate with the reader, but the typical trade discount is around 55%, which allows for a typical retail margin of 40%.

Publishing-on-demand is removing some of the participants in this little dance, and as a result, the same piece of pie is being divided among fewer people, resulting in more money for the remaining players (especially the author).

Brent Sampson is the President & CEO of Outskirts Press Publishing at outskirtspress.com and author of Publishing Gems: Insider Information for the Self-Publishing Writer. Information at outskirtspress.com

cleaning help near Mundelein ..

In The News:

A phone phishing attack compromised Harvard's alumni and donor database, marking the second security incident at the university in recent months.

AutoFlight's zero-carbon floating vertiport uses solar power to charge eVTOL aircraft while supporting emergency response, tourism, and marine energy maintenance.

A new phone return scam targets recent buyers with fake carrier calls. Learn how criminals steal devices and steps to protect yourself from this fraud.

New Anthropic research reveals how AI reward hacking leads to dangerous behaviors, including models giving harmful advice like drinking bleach to users seeking help.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

Holiday email scams, including non-delivery fraud and gift card schemes, spike in November and December, costing victims hundreds of millions, the FBI says.

Holiday visits offer the perfect opportunity to help older parents with technology updates, scam protection and basic troubleshooting skills for safer digital experiences.

Swiss scientists create grain-sized robot that surgeons control with magnets to deliver medicine precisely through blood vessels in medical breakthrough.

Researchers exploited WhatsApp's API vulnerability to scrape 3.5 billion phone numbers. Learn how this massive data breach happened and protect yourself.

Travel companies share passenger data with third parties during holidays, but travelers can protect themselves by removing data from broker sites and using aliases.

Xpeng's humanoid robot moves so realistically that crowds believed it was fake, marking a major advancement in robotics technology ahead of 2026 commercial launch.

Researchers discover phishing scam using invisible characters to evade email security, with protection tips including password managers and two-factor authentication.

iPhone and Android users can reduce battery drain and data usage by restricting Background App Refresh to Wi-Fi connections instead of mobile networks.

Scammers nearly stole an Apple account by exploiting the support system with authentic-looking tickets and phone calls, users can protect themselves with safety steps.

FoloToy restored sales of its AI teddy bear Kumma after a weeklong suspension following safety group findings of risky and inappropriate responses to children.

Threat intelligence firm Synthient uncovers one of the largest password exposures ever, prompting immediate security recommendations.

Viral video shared by Elon Musk shows Tesla's Optimus humanoid robots performing tasks from cooking to construction, garnering over 58.5 million views on social media.

Chinese hackers used Anthropic's Claude AI to launch autonomous cyberattacks on 30 organizations worldwide, marking a major shift in cybersecurity threats.

Apple's new Sleep Score feature gives you a rating for your nightly rest quality. Learn how to set it up on your Apple Watch and iPhone today.

Essential phone settings to enable before losing your device, including Find My network, location services and security features for iPhone and Android.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

Cybersecurity research shows weak passwords remain a major threat, with simple patterns and number sequences putting millions of accounts at risk.

New Android malware BankBot YNRK silences phones, steals banking data and drains crypto wallets automatically. Learn how this advanced threat works.

FDA approves first human trial for Paradromics' brain-computer interface that could restore speech for paralyzed patients through neural technology.

New phishing platform QRR targets Microsoft 365 users across 1,000 domains in 90 countries. Learn how to spot fake login pages and protect your accounts.

Retail Margin, Trade Discount, and What it Means for the Author

Writing