Prior to the development of high-speed, print-on-demand digital presses, the only way to produce print runs cost-effectively was using the more traditional offset presses.
Offset printing had been perfected over the decades to squeeze out as much unit cost as possible from book production by increasing economies of scale (mainly through achieving very high operating speeds).
But the only way to get low costs per unit was to commit to a high volume of books per print run. Now, when it came to authors with an existing following and sales history from previous books, print runs were quite easy to predict.
But when it came to new authors, this printing technology resulted in a huge waste of book stock as publishers were required to print too many copies without having clear sales forecasts.
The Print-on-Demand Revolution
With the popularity of the nascent self-publishing industry in the early to mid-90s, as well as the increased profile of smaller indie presses, equipment manufacturers realized that a new solution was needed.
Even though digital printing technology was well-developed at the time, it was mainly targeted at the photocopy business, which was too high-cost/low-speed for volume printing applications.
However, through research and development, manufacturers were able to create higher and higher speed digital presses with progressively better and better quality. By the end of the 90s, the first large-scale, high-speed, digital printing presses began to appear.
The book distributor Ingram was one of the first companies to install large banks of high-speed digital presses to produce short print runs cost-effectively, followed a few years later by Kindle Direct Publishing (KDP), a subsidiary of Amazon. Many traditional printers also invested in digital presses.
Today, digital technology has improved to the point of being able to produce high-quality images that are cost effective at low volumes and nearly indistinguishable from the quality standards of offset printing.
Introducing the Two Main Players
There are currently two large players in the print-on-demand arena who’ve developed not only global print-on-demand networks with facilities around the world, but also the software platforms necessary to distribute titles globally at a very low-cost for authors.
The first player is Amazon’s Kindle Direct Publishing (KDP), which is the portal for self-publishers and small indie presses to have their books appear on Amazon.
KDP has on-demand printing facilities in North America, Europe and Japan, so when a reader in any of those markets purchases your book on Amazon, a copy is printed in near-real time and then shipped domestically to the end user at the lowest possible cost.
The convergence of technologies of the internet, eCommerce and distributed print-on-demand facilities managed to remove the biggest barrier to global book sales – the high cost of shipping pre-printed book stock around the world.
The second player is IngramSpark, a subsidiary of book-distributor giant Ingram. What KDP does for online book distribution, IngramSpark does for brick-and-mortar bookstores and libraries.
IngramSpark also operates print-on-demand facilities in multiple countries through Ingram’s Lightning Source subsidiary. Specifically, they operate high-speed, on-demand digital presses in the U.S., the U.K., France and Australia, offering similar coverage as Amazon’s KDP.
As a self-published, nonfiction author your best approach is to self-publish on both platforms simultaneously in order to the get best of both online and offline worlds.
Amazon’s Kindle Direct Publishing (KDP)
Let’s look at the approximate costs of self-publishing on the KDP platform.
KDP has no initial publishing fees, although I highly recommend that you purchase your own ISBN, or book identification number. If you use the free ISBN supplied by KDP, you’ll be blocked from co-publishing your paperback with IngramSpark, which will lock you out of physical bookstores (which seldom order books from KDP due to their low wholesale discount).
Book Printing Cost
KDP won’t charge you in advance for the cost of the books sold through Amazon. When a sale is closed, they’ll simply deduct their printing cost from the amount collected and forward you the remainder minus a distribution fee (more on this later).
The actual printing cost will depend of the type of paper you choose, your book’s trim size and the number of pages.
KDP only offers a flat 25% discount to brick-and-mortar bookstores, whereas the expected industry discount is 40%. As a result, bookstores don’t typically order books from KDP because most would be doing so at a loss.
KDP will take pay you 60% of your book’s list price minus the printing cost as a royalty and keep the rest as their commission for distributing your book through Amazon.
Volume Discounts for Author Orders
Although KDP allows authors to purchase books at cost, they don’t offer volume discounts. So, if you purchase a large order to fulfill back-of-the-room sales for a number of speaking events, you’ll get no break on your order.
(Note: this is the downside of KDP, however, there’s a workaround that I’ll cover later.)
This is a feature where you can enable KDP to distribute your title to the book trade outside of Amazon. If you do, your royalty decreases from 60% of your list price to 40% minus the printing cost.
Out of the remaining 60% that KDP retains, they extend a 25% discount to bookstores and keep the remaining 35% as their own distribution fee.
Now remember that bookstores will not order from KDP at this low discount rate, so make sure that this feature is disabled for your title to prevent KDP from selling to physical bookstores.
Unlike KDP, IngramSpark does have a small cost when you upload print files. Specifically, they’ll charge you $49 per book format. But they do have a significant upside: they can print both paperback and hardcover formats (KDP only supports paperbacks), which gives you the ability to offer your title at two different price points.
(Note: you’ll to supply a separate ISBN for each book format.)
Book Printing Cost
IngramSpark deducts the printing cost from sales after receiving payment from customers. This amount will depend on the type of paper you choose, your book’s trim size, the number of pages and the book’s format (paperback or hardcover).
Ingram offers brick-and-mortar bookstores the standard industry wholesale discount of 40%, which makes them their preferred choice for book distribution.
Now, over the years, they’ve come up with a flexible discounting scheme that allows you to set a lower bookstore discount and keep a higher royalty, mainly to offer a competitive counterpart to KDP’s approach. However, any discounting below 40% will result in bookstores not ordering your title, so make sure you always set your title’s discount at the expected 40%.
IngramSpark offers the following royalty scheme:
- You can choose a bookstore discount of between 30% and 55%.
- Out of the above range, IngramSpark keeps 15% as their distribution fee so bookstores will get an actual discount of between 15% and 40% (as stated before, a bookstore discount lower than 40% will result in no book sales due to a lack of margin).
- You get paid the remainder, between 70% and 45% as your royalty minus the printing cost. Again, for all practical purposes, the only figure that’s meaningful is a royalty of 45% of your list price minus the printing cost.
Volume Discounts for Author Orders
This is the area where IngramSpark really shines: the generous volume discounts they offer to authors. Not only will you be able to buy books at cost, but they also offer volume discounts that make ordering through KDP unnecessary.
Here’s an example:
Say that you’re printing a 200-page black and white paperback. Your IngramSpark printing cost will be approximately $3.69 for a single copy, but if you order 1,000 copies you’ll get an additional 40% discount off the unit cost.
So, let’s assume that you pay the same unit cost of $3.69 per copy both with IngramSpark and KDP (their pricing structures are quite competitive). Instead of paying $3,690 at KDP ($3.69 x 1,000) you’ll only pay $2,214 at IngramSpark ($3.69 x 1,000 x 60%).
That’s a savings of $1,476!
Online Bookstore Distribution
Although IngramSpark will also distribute your title to online bookstores including Amazon, you still also need to publish directly to Amazon through KDP.
First of all, you’ll get a higher royalty for Amazon sales if you go through KDP (60% minus printing cost vs. 45%), but also, Amazon is known for prioritizing KDP-distributed books over other competitors.
Although they’ve never publicly admitted to this practice, it’s been observed over the years that KDP books always show up on Amazon with a status of “Available Immediately” whereas IngramSpark-distributed books often appear with a status of “Not in Stock,” even though they print books on demand as well.
As a self-publisher of nonfiction, you always want to gain the maximum possible exposure for your book.
Both IngramSpark and KDP have created powerful distribution platforms to help you achieve this goal, but they have different strengths and weaknesses.
Fortunately, these platforms happen to be complementary and by self-publishing your book on both you’ll get the best of both worlds – global reach through online bookstores and brick-and-mortar bookstores for a very low cost of distribution.
Leave me a comment below if you have any questions or a specific need that I can help you address – I operate an author services firm that specializes in helping entrepreneurs, professionals and business owners who want to publish books as a calling card for prospects, to establish their status as an expert or to just to generate additional leads for their businesses.
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Bennett R. Coles is an award-winning author of 6 books published through Harper Collins (NY) and Titan Publishing Group (UK). He is also the publisher at Promontory Press and the founder/CEO of Cascadia Author Services, a boutique full-service firm that specializes in premium author services specifically designed for busy professionals. Our end-to-end services include writer coaching, ghostwriting, editing, proofing, cover design, book layout, eBook production, printing, distribution and marketing.