Where does your money go when you buy a book?

Have you ever wondered where the money goes when you buy a book? On the Fast Company website Adam Pennberg breaks it down:

 “If a book lists for $30, the publisher gets between $15 and $18, but it has to pay a wholesaler 15% ($4.50) and a distributor another 15%. Take the higher number and Hyperion, HarperCollins, Simon & Schuster, and the rest end up with $9. Pre-publication (cover design, text design, copyediting, etc.) run about a buck. Printing: $3.25. Author royalties, maybe $3 a book. Don't forget salaries, rent and the like, which may cost a buck or two on each title. Then there are returns, with booksellers returning unsold merchandise to the publishers, who either remainder it for pennies on the dollar, or simply pulp it. In the end a publisher is fortunate to wring a few cents on a book. No wonder it's a hits business, with John Grisham, Dan Brown, Stephenie Meyer, and J.K. Rowling carrying the rest of us. If a publisher gets one or two big books a year, it might report margins of 10%--if it's lucky.”

 The article also looks at what it calls “bookstore baksheesh”—the money publishers pay to get books featured on the ends of aisle or tables up front. A sobering look at a challenging business!

 (for help writing your books, see “Your Writing Coach,” published by Nicholas Brealey and available from Amazon and other online and offline retailers.)