What determines a book's price?

Question

Ideally, a book price should be proportional to its publication cost. Since some books and topics have potential for higher sales, publishers increase the price. What I do not understand is why a book with public audience costs a few dollars, but a technical book (with the same printing costs) can be a few hundred dollars.

I speculate that one reason is that a technical book has a lesser number of potential sales. Of course a publisher would expects a decent revenue from each book project, but but I cannot understand why the increase in price is so extreme. I wonder if this high price is part of the reason for lower sales in the first place, creating a vicious cycle.)

Is there any standard scheme for determining the price of a book? Or do publishers increase the price to as much as the book will sell?

Answer 1

I think the simple answer is that the publisher has to recover their costs on the expected sales of the book, and tend to price accordingly. There is also the drive that they want to charge as much as they can for it, while not damaging their sales.

So academic or technical books are liable to have similar or higher costs than novels, for example, because they need checking for accuracy by people who know the subject. They are often also larger and thicker, requiring more time to check.

The potential sales of these are hugely less than popular novels. Some of them will sell hundreds, maybe thousands, rather than tens of thousands that novels can sell. So their income is liable to be less - if the book takes off in academic circles, they will get a nice profit from it, but if it fails to take off, they will make a loss. Hopefully, it balances out.

There is a different market for regulatory books, that is, books that certain organisations need to have, which will have known basic sales, but they will be businesses, so they will charge more. There are extra costs for making sure it is strictly correct and valid, according to the regulations, and companies will pay £200+ a year for the latest copy. Publishers will price according to what they think the market will take.

Answer 2

There are two different primary factors involved here. The first is recovery of costs, while the second is supply and demand.

The publisher is going to have a certain amount of fixed costs tied to any book, regardless of subject. These include editing, fact checking, cover design, paper, and printing. With a popular novel, they can recover these costs more easily through volume sales. Say for example their total expense is $100,000, and the book sells for $10. They would need to sell 10,000 copies of the book just to break even. For a technical book, they have to factor in the likeliness that they even have an audience of 10,000, let alone that many who will actually buy the book. Based on previous sales of similar books, they will most likely identify a target number of sales they might realistically be able to reach, and then price the book accordingly.

With the supply and demand factor, they can look at the marketplace and detrmine whether or not there is any other book offering the same information. If there is not, and the demand for the book seems respectable, then they can charge a higher price simply because nobody else can offer what they have. Even if they can sell the book at a lower price to recover their expenses, they may be inclined to start with a higher price. This would especially be true if they believe that there is considerable demand from a limited audience.

Answer 3

Book prices have several factors:

1. Print run.

   Printing has fixed costs and per-book costs, and the cost of one book decreases as the proportion of the fixed costs decrease with each additional copy.

2. Pre-production costs.

   Writing a novel involves one person a few months, so part of the fixed costs will be one person's salary over that time. Other books might involve additional expenses, such as a team of writers, equipment they need to produce the content of the book, rights for images or texts that have to be acquired, time to produce the content, etc.

3. Production costs.

   Paperback novels (which are made to be read once and then thrown away) are printed on cheap paper and bound cheaply in a cheap production process, but other books are printed on better, more durable paper, in higher resolution, with images, in color, better bound and so on. Both because readers take pleasure from the better quality and because the usage demands more durability. You don't want the book you bought to learn for your exam to fall apart after the first reading or a book in a library to fade to illegibility within a decade.

4. Psychological effects of pricing.

   There are studies on price thresholds and price effects. Google that, if you are interested. I once sat in on a conference in a publishing house when the design and price of one book was discussed. The final decision was for a larger format (to visually impress the potential buyer), cheaper binding (because it will fall apart after the sale and not affect the sale), and higher price (because it will give the buyer the feeling of buying something of value). The latter is the factor I want to point out to you. Observe yourself and others. You don't always aim for the cheapest product, but when you try to decide which product you buy, price is an information that you correlate with quality. So books might be expensive, as in the case I reported, simply to impress on the reader that it must be a book of high quality. Of course, high price as a sales factor only works for certain market segments (in that case it was a coffee-table book on architecture).