▷ How is the price of a children's book calculated?

As a publishing house specializing in children’s and young adult literature and new authors, we are sure that, on more than one occasion, you have noticed a children’s book that has caught your attention; perhaps a children’s book of standard size, by a little-known author but that looks interesting…. You decide to buy it, but then you see its price. Better another day! and, then, you may have asked yourself: How do you calculate the price of a children’s book?

The price is, without a doubt, one of the most important points to take into account when publishing a children’s or young adult’sstory, and, many times, when assigning it to the authors, they ask, why so expensive? or so cheap? Can’t I put the price I want on it? or they throw phrases like “I have seen a very similar children’s book and it had a better price”.

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How to calculate the price of a children’s book

In order to know how to calculate the price of a children’s book, we must always look at the costs and, of course, at its viability. There is little point in taking on an ambitious and incredible project if we are not going to be able to sell it at a reasonable price.

The retail price (RRP) of a children’s book is established by adding up all the costs involved in its creation, production and distribution, in order to ensure both its quality and commercial viability.

The first thing we have to consider when asking ourselves how to calculate the price of a children’s book is the royaltieswhich is usually 10% of the RRP of the children’s book. To this we must add the production costs, which in turn are divided into:

Fixed costs: proofreading, illustration, layout, legal management, prepress samples, etc.
Variable costs: associated with printing and dependent on the print run, size of the book, type of paper, number of pages, type of binding and number of color pages. These costs usually account for approximately 25% of the RRP.
Editorial maintenance costs: include salaries, rents, licenses, equipment and other fixed costs necessary for the operation of the publishing house.

Once all these costs have been added up, the total is divided by the number of copies planned to obtain the cost per unit.

From this unit cost, a multiplier coefficient (usually between 5 and 6) is applied to determine the final selling price.

Example: if the production cost of one copy is €2.51, the RRP on the market would be approximately €15.95.

When the book is marketed, the bookseller and the distributor, respectively, will retain the percentage that has been negotiated on the retail price, as part of their participation in the value chain.

Although it may seem that the publisher makes a high profit, the real net margin is usually between 5% and 10%, which is used to sustain new investments, maintain the commercial stability of the catalog and amortize the copies produced that are not sold and are returned.

How is the revenue per book distributed?

The traditional publishing industry is based on a value chain model in which the revenue from the sale of a book is shared among different main agents: author, publisher, distributor and bookseller.

In general, the distribution of the price of a sold copy is usually organized as follows:

Bookseller: retains between 25% and 30% of the retail price.
Distributor: usually keeps a margin of 50% to 60% of the retail price.
Author: receives 5% to 10% of the P.V.P.
Editorial: assumes the costs of production, design, printing, promotion, distribution and inventory.

Is a small publisher the same as a large one?

Independent publishers

At this point we have to clarify the differences between an independent publishing house and a large publishing group. A small publishing house must first of all be clear about its handicap: money.

We are companies that play with their small budgets to accommodate as many deserving authors as possible, and that is why the investment for printers cannot be as much as we would like. The first print run for this type of company is usually between 300 – 500 copies, depending on the needs and interest of the distributor. If you have come across a case in which an independent publishing house has offered you a first print run of 1,000 – 2,000 children’s books, I am sorry to tell you that this has not been the case. Be wary of it.

The large publishing groups

The large publishing groups have print runs of more than 15,000 copies, so the production price is very low and we can see in the market how children’s books of considerable length have an economical RRP. Depending on the publisher you go to, you should know how to calculate the price of a children’s book.

But if we go to a small company, as mentioned above, the print run will be smaller, so the production price will go up and we will have no other choice but to set a higher PVP.

How much does it cost to publish a children’s book?

This production cost varies according to the print run, and depending on the type of paper, the size, the binding, if it includes some color pages… In the end, the printer will keep approximately 20-25% of the children’s book’s retail price.

Once we take all these costs into account, we will obtain a figure that is divided by the number of copies that the publisher has proposed to produce and we will get the cost per copy.

The next step is to add up the payments to the distributor distributorwhich usually earns between 55-60% of each copy, and the resulting figure is multiplied by a coefficient of 5 or 6 to obtain the final price of the children’s book on the market.

For example, if we have a children’s book that costs us €2.51 to produce, we multiply it by 6 and the result is €15.06. So the final price of that book on the market will be €15.95.

Are you sure that children’s publishing benefits?

It is often thought that publishers make a high profit from the production of children’s books, but the truth is that it is their percentage that is reduced every time more factors come into play or every time publishing costs increase. We manage that 5-10% that is left for us by trying to reach a point where we can achieve both profit and commercial stability for the book.

After reading this article you will have been able to see that the RRP of your children’s book is not something that is chosen randomly, but that many aspects are taken into account. We have to take into account the maintenance of the business as well as the benefits for the different parties involved in the process.

We bet on expectations, because just because we have confidence in a work and see its potential does not mean that readers see the same thing. We count on selling all print runs but it doesn’t always happen and we also have to deal with these inconveniences: book returns.

It is a complex business that is often undervalued by the vast majority of those who approach it, but now that you have all the knowledge, you will know how it works and you will be able to know what is the best price for your work.

Frequently asked questions about the price of a children’s book

What is a children’s book?

It is that which is aimed at children. It has a clear narration and, due to its target audience, it is easy to understand. It has few characters and reduced scenery.

How is the price of a children’s book calculated?

Two variables come into play: royalties and costs, both fixed and variable.

What are children’s book copyrights?

These are royalties. The price received by the author for the sale of each work he has written and registered.

What are the fixed costs of a children’s book?

Proofreading, illustrations, layout, management of legal aspects, printing samples, etc.

What are the variable costs of a child price?

These costs are associated with printing and depend on the print run, size of the book, type of paper, number of pages, type of binding and number of color pages. These costs usually represent approximately 25% of the RRP.