How Books Are Priced

No quick-fix spells on book prices

Each of the three main literary markets –– educational, professional and general public –– has its own pricing limits.The final figure on price tags is determined by market size, how affordable a book should be and how profitable it is likely to be, says Sweet and Maxwell Asia’s Devaraj Letchumanan.

Educational books for primary and secondary school students are the country’s biggest book market, says the managing director.And because they are produced in large numbers, publishers can keep prices low.

By the same principle, books for college and university students are slightly more expensive because the market is smaller.

For locally published books, about a fifth of the RM30 or so a reader pays goes to paper, typesetting, cover design and printing, says Raman Krishnan, who runs independent bookstore Silverfish Books.

Another 20 per cent is shared between the author and publisher, though the publisher shoulders all the risk if the book flops.

The lion’s share, about 60 per cent, is generally shared between the distributor and retailer.

The distributor takes care of transport, warehousing and marketing the book.

The bookseller keeps the books on the shelf and in the public eye in their inviting stores.

Distributors and bookshops aren’t paid. What happens is they buy the book from the publisher at a discount –– of up to 60 per cent of the cover price.

If imported, the price is set like this: The cover price, noted on the book in pound sterling, US or Australian dollars, is converted using an 90-day average exchange rate.

Another 30 per cent is added on, explains Kevin Sugumaran of the Malaysian Book Exporters and Importers Association.

“So a £10 book could come up to RM60 after applying the conversion rate and reach RM78, when the 30 per cent is added.

“That percentage is a gross margin that covers freight, warehouse costs, distribution and the profit that goes to bookshops.”

Note: USD$1 = RM3.50, £1 = RM7.00 (approx.)

3 Comments (+add yours?)

  1. Netty Gritty
    Oct 28, 2007 @ 22:17:51

    hey,
    what about regional distribution?
    for example, a book can be published in different editions at the same time, but for different parts of the world. so an edition meant for india will be priced less than for usa. how exactly is this price difference negotiated? is per capita income of a country the deciding factor here?

    nylusmilk: i’m afraid your question is beyond my limited knowledge! the per capita income could be the factor; i don’t see what else could be the reason for the price difference then. 🙂 i’m not totally sure though!

    Reply

  2. aloi
    Oct 29, 2007 @ 15:26:53

    strangely, a lot of book are much cheaper here in the philippines than in the US. my US relatives go gaga when they start converting prices. true, i guess it must have to do with making the books more accessible to those with lower per capita income. i’m glad for that!

    nylusmilk: i wonder then if books are cheaper in thailand or indonesia than it is in our countries? 😉 we’d go gaga just like your american relatives, haha.

    Reply

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