All this is just 10% of a book’s price?

Science Fiction Blog io9 have a gigantic image showing everything that’s involved in producing a physical book and getting it to customers. It covers only the physical book production and distribution and nothing else.

Thanks to Damaso, the crazy good photographer, for the link.

Please take a look at that image. Who in their right mind is going to believe -

  1. Printing Paper Books and Transporting them takes up just 10% of the book’s cost.
  2. Producing and Distributing eBooks costs just as much.

Yet Publishers want us to believe exactly that.

Taking a long, hard look at all the steps in Physical Book Production

Let’s contrast the effort and time and costs involved in physical book production with effort, time, and costs of ebook production.

We’ll focus on the steps shown in the figure at io9 -

  1. Sales, Customer Service, and Support for the person having the book printed. 
  2. Preparing it for printing – The Digital PrePress.
  3. Preparing the Plates for Printing.
  4. The Actual Printing.
  5. Binding.
  6. Shipping and Delivering the Books.
  7. Storage in Stores and Actually selling them.

Sales, Customer Service, and Support

With physical books this step is all about lunch and building relationships. All the costs involved in entertaining each other get listed under ‘book acquisition costs’ and ‘marketing’

Is some of this necessary? Yes.

However, with ebooks we will change the model – making some of these unnecessary.

If an author is having their ebook ‘created’ and it’s their own money then the $1,000 book formatter in Romania is a better choice over the $10,000 book formatter in New York who buys them lunch. Or perhaps it’ll be the $2,000 freelancer in Chicago who doesn’t know anything about sales but does a great job.

Digital PrePress

This is all about checking the digital files and getting them ready for printing.

Will it still be needed? Yes.

However, with ebooks we can introduce some obvious efficiencies -

  1. Since an ebook can be modified any time there isn’t a ridiculously high price to pay if you get a layout wrong.  
  2. Software can replace at least a few of the roles shown in the Image.  
  3. Note that these are all related to making sure an already edited, formatted, and designed book is printed right. These are costs incurred mostly because book printing is a ‘you better get it right or you’ll have 20,000 flawed copies’ line of work.

It’s the fact that tens of thousands of unalterable copies of a book are printed at one time that accounts for the majority of the complexity and costs. With ebooks things are simple and low-cost.

Preparing Plates for Printing

With ebooks we can think of the master ebook copy as the plate. So let’s say this is very similar.

The Actual Printing

Consider all the costs here -

  1. Paper.
  2. Ink.
  3. Power for printing.
  4. Printing machines.
  5. Transporting Paper and Ink.
  6. People to oversee everything.
  7. Machines for drying, folding, and stacking the printed paper pages.

 It’s hard to believe that the entire book production process costs just 10% of the cost of a book. Just this step alone looks like it might cost more than that.

With an ebook we have the super high cost of doing a ‘copy’ of the master file. It’s so inexpensive that you can do it billions of times for the cost of a few hours of electricity.

Binding

You have the material used for the cover and the special printing, the adhesive used, the machines to line up pages and to attach the covers. Plus some sort of quality control.

Shipping and Warehousing and Delivering the Books to stores

After the books are printed -

  1. They are stored somewhere in the printing factory until they are ready to ship.
  2. They have to be shipped – people have to make decisions and put in work to add shipping labels and such.
  3. There are transportation costs.

If a wholesale distributor takes over they take 10% of the book price.  

With ebooks you don’t really have this – You just send one single file per book that’s a few MB or less (with some data such as price and description and meta data) and the ebook store gets everything it needs.

Storage in Stores and Actually Selling Them

Costs that stores incur for physical books include -

  1. Storage Room space and shelf space. 
  2. Employees to move books around and take orders and help customers.
  3. Rent for the store.
  4. Electricity costs and everything else.
  5. Marketing and other costs.

In fact the costs are so high that half of the book’s list price goes to stores.

With eBooks you have the supposed huge costs of creating a webpage for the book, paying for web storage, and costs of maintaining the servers.

Let’s be frank here – claiming ebooks are expensive to store and distribute is nonsense.

Lots of companies are offering free video downloads and free blogs and free email. This isn’t as huge a cost as Publishers paint it to be. It also scales up remarkably well – For every additional book you just need a single webpage and a single file and there’s unlimited shelf space.

3 possibilities when it comes to physical book production and shipping

After looking at that gigantic image of book production tasks and comparing those tasks and costs with ebooks we are left with just three possibilities -

  1. Publishers are so unbelievably efficient that printing books and shipping them costs just $1 per book for paperbacks and $2.50 a book for hardcovers (10% of the list price). All the myriad costs per book above are covered in that small amount and that’s all that’s saved by moving to ebook publishing.   
  2. Publishers are so terrible with ebooks that they manage to spend just as much on producing, storing, and distributing ebooks as they did on physical books. In other words it costs Publishers just as much to copy their master ebook file once as the production cost of an actual physical book ($1 to $2.50).
  3. Publishers take us for fools.

If it’s 2. or 3. then Publishers don’t deserve to survive. If it’s 1. then we have our trump card.  

eBooks and the Magic Factor – Zero cost Returns

While Publishers are claiming that book production and shipping accounts for just 10% to 20% of the price of a book even they admit that returns make up a larger part.

With ebooks returns cost nothing – there is nothing to ship back, nothing to destroy, no wasted paper and ink. There is no money lost.

Ken Auletta’s article in the New York Times defending Publishers had this gem -

On a twenty-six-dollar book, the publisher receives thirteen dollars, out of which it pays all the costs of making the book.
 
Bookstores return about forty per cent of the hardcovers they buy; this accounts for $5.20 per book.

So … perhaps you really aren’t saving any money by moving from physical books to ebooks when it comes to production and shipping.

What about returns?

What about that magic $5.20 per book that returns are costing you?

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