What is Lightning Source? Lightning Source is a print-on-demand company that also offers traditional printing services. It’s best known for its print-on-demand services with an affiliation with one of the largest distributors in the country, Ingram. Lightning Source provides a fast efficient way of printing your books to order for you or your distributor. If you are planning to self-publish, starting an independent publishing company, or seeking other printing options for a medium or large publishing company, you have probably already researched a variety of printers. Lightning Source offers a printing solution for everyone, and that includes an option to set your discount. During my research I came across a post by Pete Masterson, an established self-publishing expert. I have asked his permission to share his insight on how to appropriately discount your book with Lightning Source. As a new independent publisher, I found it very informative. I hope you will, too.
Re: [Self-Publishing] variable discounts for POD books
You've answered your own question. LSI allows you to specify a single trade
discount that then applies to all who purchase books from LSI/Ingram. Indeed,
this corresponds with the FTC requirement that "like buyers be given like
prices"... while there are ways to categorize booksellers in ways that allow
"price discrimination" physical vs. online is not considered a reasonable point
upon which to base that discrimination.
The choice of a 55% discount with full return for credit privilege is necessary
for books that are likely to have significant (or any) demand from physical
bookstores. Of course, most physical bookstores do not order POD books in any
volume most of the time.
The strategy of setting a 20% wholesale discount through LSI assumes that the
book will not be sold through physical bookstores. Since online/electronic
booksellers do not stock inventory (ordering from LSI when they receive an
order) they can accept the short discount without difficulty. Do not expect to
see any significant retail discounts offered on books carrying the 20% wholesale
terms. (It is also not necessary to allow returns.)
So, the choice of the wholesale discount is really a matter of considering your
overall marketing strategy and choosing where you might wish to be selling your
books.
You have to ask (yourself), Will the book be attractive to a physical bookstore?
If so, what do I need to do to encourage booksellers to order the book? If you
find that retail bookstore sales are not sufficiently attractive, then you might
consider using the 20% wholesale discount, no return, approach.
Then there is the matter of the book price. If you plan to sell with a 55%
discount, (returns allowed), you may wish to set the list price a little higher,
since that will gain you more revenue -- and the online booksellers will surely
discount the retail price somewhat. (For example, my book has a $29.95 list
price ... but Amazon usually sells it at $19.97 ... a 34% discount from list
price.) It is distributed as an offset press printed book through a distributor.
Regardless of the retail price, I receive $13.48 per copy at the standard 55%
wholesale discount (regardless of what the retail vendor charges).
If I had set my book up as a 20% wholesale discount title, then I might have set
the list price at $19.95 ... then I'd receive $15.96 per copy (less print cost)
through LSI/Ingram. Amazon (and other online sellers) would be unlikely to
discount the book ... but the sales price would still be about the same.
So, it's not just a matter of picking between 55% and 20% ... you have to
analyze your complete marketing plan and consider who you're selling to and how
you're going to reach that audience. There is no single correct answer and every
choice has trade offs to consider.
For example, at the $13.48 per copy I currently receive, my unit cost of printed
books costs $3.48, so my gross margin is about $10 per copy with the 55%
wholesale discount model. However, due to the large size of my book, the LSI
print cost would be $7.06 per copy, so even though I receive $15.96 per copy
with the $19.95 price and 20% discount through LSI, I'm left with a gross margin
of only $8.90 per copy. (So I'd need to analyze my other distribution costs to
determine if I'd come out ahead with LSI/20% distribution vs. printing with a
"standard" 55% distribution model.
In the end, this is NOT a simple question and you need to do some thorough
analysis of your total costs per book, etc. to determine the "best" approach for
_your_ particular book.
discount that then applies to all who purchase books from LSI/Ingram. Indeed,
this corresponds with the FTC requirement that "like buyers be given like
prices"... while there are ways to categorize booksellers in ways that allow
"price discrimination" physical vs. online is not considered a reasonable point
upon which to base that discrimination.
The choice of a 55% discount with full return for credit privilege is necessary
for books that are likely to have significant (or any) demand from physical
bookstores. Of course, most physical bookstores do not order POD books in any
volume most of the time.
The strategy of setting a 20% wholesale discount through LSI assumes that the
book will not be sold through physical bookstores. Since online/electronic
booksellers do not stock inventory (ordering from LSI when they receive an
order) they can accept the short discount without difficulty. Do not expect to
see any significant retail discounts offered on books carrying the 20% wholesale
terms. (It is also not necessary to allow returns.)
So, the choice of the wholesale discount is really a matter of considering your
overall marketing strategy and choosing where you might wish to be selling your
books.
You have to ask (yourself), Will the book be attractive to a physical bookstore?
If so, what do I need to do to encourage booksellers to order the book? If you
find that retail bookstore sales are not sufficiently attractive, then you might
consider using the 20% wholesale discount, no return, approach.
Then there is the matter of the book price. If you plan to sell with a 55%
discount, (returns allowed), you may wish to set the list price a little higher,
since that will gain you more revenue -- and the online booksellers will surely
discount the retail price somewhat. (For example, my book has a $29.95 list
price ... but Amazon usually sells it at $19.97 ... a 34% discount from list
price.) It is distributed as an offset press printed book through a distributor.
Regardless of the retail price, I receive $13.48 per copy at the standard 55%
wholesale discount (regardless of what the retail vendor charges).
If I had set my book up as a 20% wholesale discount title, then I might have set
the list price at $19.95 ... then I'd receive $15.96 per copy (less print cost)
through LSI/Ingram. Amazon (and other online sellers) would be unlikely to
discount the book ... but the sales price would still be about the same.
So, it's not just a matter of picking between 55% and 20% ... you have to
analyze your complete marketing plan and consider who you're selling to and how
you're going to reach that audience. There is no single correct answer and every
choice has trade offs to consider.
For example, at the $13.48 per copy I currently receive, my unit cost of printed
books costs $3.48, so my gross margin is about $10 per copy with the 55%
wholesale discount model. However, due to the large size of my book, the LSI
print cost would be $7.06 per copy, so even though I receive $15.96 per copy
with the $19.95 price and 20% discount through LSI, I'm left with a gross margin
of only $8.90 per copy. (So I'd need to analyze my other distribution costs to
determine if I'd come out ahead with LSI/20% distribution vs. printing with a
"standard" 55% distribution model.
In the end, this is NOT a simple question and you need to do some thorough
analysis of your total costs per book, etc. to determine the "best" approach for
_your_ particular book.
Pete Masterson
Author of Book Design and Production: A Guide for Authors and Publishers
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