Friday

Question of the Week August 4

You say that you have to consider the market when you acquire a book. I read somewhere that this involves a P&L. What is a P&L and how does it help you decide to acquire a book?

The sad truth is that a P&L does not help an editor and the publisher decide if a book can be acquired; it makes the decision. P&L stands for profit & loss. It’s an accounting spreadsheet (mine is in Excel) that we enter relevant data into. We approximate sales and expenses, and then the various formulas calculate whether or not a book will be profitable. It does not take into account overhead, so conventional wisdom says that a small publisher needs to have a profit margin of 30 to 40% per title to stay going. This can be difficult to do since a publisher receives less than 35% of the cover price. Factor in a 10-12% royalty, the cost of printing and shipping, and a 30% return rate, and making even a 20% profit can be difficult.

So even a brilliant book that an editor absolutely loves will end up rejected if the editor can’t prove through the P&L that the market will support the book.

2 comments:

Lynn said...

I find this very interesting, especially in regards to a cart of children's books we just received yesterday. Generally speaking, our library orders children's books from a jobber for less than retail. Yesterday's order was 80 childrens books containing a mixture of picture book, easy readers, chapter books, and YA titles. It was estimated to cost $1000, or roughly $12.50 per book.

By the time books are shelf-ready, processing costs have added an estimated $5.00 - $7.00 to our original cost and the 30% purchase discount gained by utilizing a jobber has been added back on the title. Good thing we aren't looking to produce a profit.

Anonymous said...

I have a question that has nothing to do with this post, but here goes. What 'bad' language is appropriate for kids at what ages? For example, are words like sucked and crap OK for middle grade books? I mean, I think the kids use these words, but does that mean it's OK to put them in print for that age group? Will parents not buy books because of this? Some of the YA stuff I've seen is downright raunchy when it comes to language, and it surprises me that parents buy it for their kids.