Regarding cost per unit. I think the publisher likes this type of partner because they can really get their initial order volume up high without much risk. This allows them to have a super low cost per unit, maximizing profit, from the start.
Yup, and the “industry standard” wholesale discount publishers give to e.g. bookstores is usually 55%
That seems like an incredible discount. Can I assume then that bookstores are competing against each other via very minute (perhaps one or two dollar) price discounts while still maintaining a high profit margin?
I worked at a publisher back around 2010.
The unit cost for the publisher to put a $20 AUD book on a shelf in a book shop was about $2 AUD.
The bookstore kept quite a bit of that margin - $10 or so - but they had to pay rent & staff a store. If they were only selling $500 worth of books per day, it wouldn't have mattered if their margin was 100%, the fixed overheads would eat it all. If they could keep stock turning over quickly, the profits were impressive.
That makes sense to me. Thank you for that anecdote. I had no idea about these figures.
> initial order volume
None of the books you get through this program are new releases. But they are printed special for imagination library.