Let’s look at the typical wholesale discount for books, and why you should consider listing your books with IngramSpark AND KDP.
I use both KDP and IngramSpark for my book printing needs.
KDP is entirely in charge of print and ebooks that get sold to Amazon customers, whereas IngramSpark handles book printing and distribution for all other booksellers, such as the wonderful, independent bookstores that enthusiastically hand-sell my books to their customers. (I will explain more about why I do this further down in this post.)
It’s important to me that booksellers get fair, industry-standard discounts on my book.
I understand that the typical wholesale discount for books that booksellers might expect from a small publisher is 40% off the retail price. When my first book was published, it was easy for me to personally handle distributing my books to local booksellers and to offer them that standard discount.
Now that I have published several books, it gets messy for me to handle processing all of those orders. Not to mention, most booksellers would rather order books directly from the distributor rather than doing business with several authors and small presses.
A 40% discount with IngramSpark is not a 40% discount for the bookseller!
You can imagine my dismay when I learned from one of my local bookstores several years ago that they prefer not to order my books from Ingram because they only get 20% discount from them as opposed to the industry-standard 40%.
I was baffled, because at the time, in my IngramSpark settings, I clearly had my book discount at 40%. Sure, it did say that 55% is the recommended discount (at the time, the calculator doesn’t say that any more), but they didn’t explain why. I wasn’t just going to discount my book by that much without some reasoning behind it. I didn’t know that 55% was the typical wholesale discount for books.
After contacting IngramSpark’s customer service, they explained to me that unless a book has a wholesale discount of 55% in their system, the bookseller is going to get less than the industry standard because Ingram is going to get their cut for distribution regardless of what discount the bookseller gets.
In other words, if my book has a 40% wholesale discount in IngramSpark’s system, Ingram distribution takes a 20% cut and the bookseller gets a 20% “short discount.” If I up my discount to 55%, however, Ingram reduces it’s cut to 15% so the bookseller can get the full 40% industry standard discount.
It turns out that book distributors usually take 15% and the bookseller gets a 40% discount, which means 55% of the retail price is tied up in wholesale and distribution.
Why bother with IngramSpark? Doesn’t KDP have Expanded Distribution?
KDP does offer Expanded Distribution, but for me, the royalties are still better at IngramSpark for non-Amazon booksellers, even with a 55% discount in the IngramSpark system.
Let’s look at the numbers for a 275 page novel priced at $14.00 (as of February 2021):
IngramSpark
Print Charge (per book, does not include shipping) – $4.61
Royalty based on short discount (40% discount – 20% for distribution; 20% bookseller discount) – $3.78
Royalty based on industry standard discount (55% discount – 15% for distribution; 40% bookseller discount) – $1.61
KDP
Print Charge (per book, does not include shipping) – $4.15
Royalty (per book sold via Amazon.com) – $4.25
Royalty (Expanded Distribution) – $1.45
A few observations:
KDP is great when it comes to books that get sold to Amazon customers, but since I want my books sold by all kinds of bookstores and not just Amazon, it’s important to me to find the best situation for general distribution.
KDP does not allow an independent author-publisher to set their own expanded distribution discount. From what I understand, even KDP ultimately uses Ingram to distribute their books.
An author can short discount their books through IngramSpark. That will certainly help them maximize their royalties per book.
The disadvantage, of course, is that booksellers are unlikely to carry their books if they can’t sell them for a reasonable profit, and a 20% discount is hardly enough for a bookseller to make a decent profit on the book, especially when they have to figure in shipping, too.
If an author’s book is short discounted through IngramSpark, booksellers will likely only purchase the book for special order customers, but not keep it stocked on their shelves.
On the other hand, if the book is offered at an industry standard discount to booksellers, those stores might be more likely to carry the books. (There is also the issue of whether or not a book is marked as returnable, but for many independent booksellers, that’s not important anyway. Bookstores like Barnes & Noble, however, won’t order your books from Ingram, regardless of the discount, if they aren’t marked as returnable. Setting your books as returnable can turn out to be an expensive endeavor for independent publishers, as it means a book store can order several books to stock in their stores — and the author pays for the printing of those books as they would with any print-on-demand sale — but if the bookseller decides the books aren’t moving, they can return them. The author is left with the loss of the printing PLUS the author has to decide whether or not to have Ingram destroy those returned books, or to ship them back to the author at an additional cost.)
Setting the typical wholesale discount for books is a good idea if your goal is to sell books any place other than Amazon
Once I understood how the numbers were broken down in the IngramSpark system, I didn’t mind setting my discount to 55%. Books are a huge industry, and the author is just one part of that industry.
Booksellers are on the front lines. If they aren’t getting the typical wholesale discount for books that they require to make a profit, what incentive do they even have to carry a book?
The same is true of a distributor. Maintaining those catalogs and handling the process of billing and shipping to the booksellers who order books is a business that is also worthy of compensation. (If you don’t understand the typical royalty percentages that indie authors get versus traditionally published authors, you’ll want to grab my free PDF, The Tenacious Writer’s Guide to Success. In it I explain why traditionally published authors get such a pitiful royalty on their books and why independent author publishers get to keep more of the money their books earn.)
Some might argue that IngramSpark is already making money off of printing the books, so why are they charging a distributor’s fee on top of it? I understand that concern, but it’s important to remember that printing is one business and distributing is another.
The fact is, IngramSpark is making it easy for authors to publish high quality books and make them available to booksellers around the world through their already established Ingram Content Group book distribution system. The fact that they both have the same name doesn’t change the fact that they are doing the job of two different industries and so they will be expecting compensation as such.
What are your thoughts on making your books available for expanded distribution? Leave a comment below!
(This article was originally published 5 November 2015. Updated 22 February 2021.)
I’m just using CreateSpace right now, but I’ve been meaning to look into IngramSpark because a couple of people have recommended it for non-Amazon print sales. Thanks so much for sharing this information, because I definitely want to see indie bookstores getting the industry standard discount on my books. As much as I appreciate how Amazon has made indie publishing so much more accessible, I also love my local indie bookstore. 🙂
I’m not positive about this, but I think indie bookstores will get the industry standard discount from CreateSpace, too, but a lot of them won’t order titles if they are published using a CreateSpace ISBN number. In other words, make sure your ISBN is in the name of your own publishing company.
The disadvantage to using CreateSpace for general distribution is that the royalties are just better through IngramSpark for all other booksellers. As I said, I’m guessing this is because CreateSpace ultimately ends up using the Ingram distribution network anyway.)
Anyway, I’m glad this article was helpful to you. I’m kind of frustrated that I didn’t realize this until now because my first book came out back in March! All this time booksellers have been seeing my book at only a 20% discount! I wish I could send them all a memo that says, “It’s fixed now! You can order them at the regular 40% discount!” 😀
Yeah, one of the reasons I want to go through IngramSpark too is to make it easier/more appealing for booksellers to order my books. I am using my own ISBNs, but still. It’s also great to know there’s a better royalty rate!
You know, you could probably do that now that you have your second book out–just slip a bit in the marketing material to booksellers that indicates the discount for both books is now 40% to booksellers. 😀
Regarding wholesale book pricing at IngramSpark: do you know how many books a wholesaler must purchase, in order to be eligible for the wholesale discount?
From what I understand — and I could be wrong about this — there is no required number of books in order to get the wholesale discount. As far as I know, any bookstore with a resale wholesale license would be able to buy the books at the wholesale price.
The reason that the profit per book is less with CreateSpace expanded distribution is less is because Amazon is taking 20% additional on the list price and then splitting it with IngramSpark for distribution (or it may be in addition to IngramSpark taking 10% or so; I can’t recall exactly now). This is because Amazon actually used IngramSpark for its expanded distribution. So essentially you end up paying for distribution at 1.5-2.0 times the normal rate. Ultimately, then, the retail discount using CS expanded distribution ends up being 25%–35% rather than 40%, and no retailer is going to carry a physical book at that kind of margin (though they will carry it online and drop ship it to you or their store). The other reason a bookstore won’t carry a physical copy through CreateSpace is because CreateSpace has a no-returns policy, whereas the industry expects all books to be returnable regardless of how many they actually return.
As for the wholesale discount, Sara is right—it’s right from the start with IngramSpark, and though it’s not listed on their price sheet, I’m fairly certain that a single large order from a retailer will get similar volume discounts to those given to publishers, though I could be wrong on that one.
Thanks for all the great info! For clarification’s sake, could someone confirm my impression from the above discussion: 40% discount off list is good enough if you’re selling directly to a bookstore? I have my favorite targeted bookstore saying it needs 50% discount plus free shipping for a case of 24 books. BTW, is 24 books common for a case for 9×6 inch books? I also see 55% discounts (I’m not sure how up to date some of the sources are), but that seems to include a distributor. I am not anticipating distributors for my books, but just direct sales to my customers (Amazon) and to bookstores. I’m currently using only CreateSpace, but plan to move to LightningSource when I get a little more experience under my belt and launch my next books. Thanks for comments, to include who pays for shipping!
I apologize for the slow response on this! Your comment, along with others, came in over my Christmas holiday (I took a few weeks at the end of December and early January) and I’m just now slowing down enough on my return to work to take time to respond. If you are ordering books directly from, say CreateSpace or IngramSpark, then the standard discount the bookseller would get is 40% off the retail price. On the other hand, if the shop is buying books from Ingram and you are selling through IngramSpark, a 55% discount would be required to get the bookseller to the 40% discount to which they are accustomed. (IngramSpark takes 15% commission on those sales with 55% discounts meaning they take the 15% and the bookseller gets their 40% discount, leaving you with 45% after you’ve paid the cost to print the book.)
I’ll be honest — since I don’t do a ton of business in print, but my ebook readers are well into the thousands, I don’t worry with setting my discount at 55% at IngramSpark any more. Most bookstores don’t stock many indie books all the time anyway unless they are local authors or unless they are indie phenoms selling NYTimes numbers of books. I figure if someone is buying my book at a bookstore, it’s most likely because someone has gone in and requested it.
Thanks for the comment, and again, so sorry for the slow response.
Thanks! What are the usual payment terms for bookstores — net 30 days, net 60 days?
I’m new to this, and have just been wrangling with IS’s dashboard. I set the print paperback (310 pages) at £8.99, and when I set the discount to the default 55%, I was warned by the system that I was in ‘negative’ royalties! Wha..? It was only when I set the discount to 45% that I saw that I was earning about £0.20 per book. This seems crazy! Am I missing something?
I apologize for the slow response on this! Your comment, along with others, came in over my Christmas holiday (I took a few weeks at the end of December and early January) and I’m just now slowing down enough on my return to work to take time to respond.
I’m not sure why the royalty rates are so low for you over there. I can only assume it’s because printing costs through IS are higher in the UK. That must be incredibly frustrating! 🙁 When I put in the same numbers in that you’ve provided here (310pp, 45% discount) it says, “Print Charge – US$ 5.49; Publisher Compensation – US$ 1.94.” When I put in 55% discount, it says, “Print Charge – US$ 5.49; Publisher Compensation – US$ 0.58.”