Sales Equation: Cheap + Bulk = Profit

Last week I argued for the creation of paperbacks even in this digital age. If you do have a paperback available for sale, you can benefit from a sales technique often overlooked by indie authors–bulk sales.

But bulk sells at a price lower than what I hope to get for my work, you may be thinking. And you’d be correct. Selling in quantity means selling at a discount. But it also means more sales.

How about I illustrate this with some actual figures? I’ll plug in my own. My paperbacks all sell at $10. My profit on the sale of a single book ordered through Amazon is determined by my cost, which is determined by the length of that particular book, but it hovers around $3. We’ll use that nice, round figure. If I sell one book, I make three bucks. But I’ve decided to set discounts for bulk purchases. Here’s my sliding scale:

3-10 copies: $8 per book
11-25 copies: $7 per book
26+ copies: $6 per book
 

How can I afford to set a $3 or $4 discount when I only make $3 per book? Because $3 is the profit I make when a customer purchases my book through Amazon. There is a cost for Amazon’s distribution services. But if I order my own books from the printer through my own account, I can get them for about $4 a book. I can then make a profit even if I resell them more cheaply.

Let’s run the numbers.

So let’s say someone orders 10 copies. That will cost me $40, but I’d resell them at $8 per book, or $80. That’s a customer discount of twenty bucks, and I actually make a higher profit than I would off Amazon, $40 compared to $30.

Let’s try 20 books. That would cost me $80. If I resold them at $7 a piece, they would cost the consumer $140, a savings of $60. However, I would still be making a profit of $3 per book, or $60, which is exactly what I would make selling 20 books through Amazon.

Let’s run the numbers again at 35 copies. That would cost me $140 to order but would be resold at $6 per book, or $210, a profit of $2 per copy. That’s a consumer savings of $140 and a profit of $70 for me. I’d even be willing to sell at half price if the order was large enough. One hundred books at $1 profit is still $100!

So you can see that each time, everyone wins! By having a bulk sale policy in place, buyers might be more inclined to purchase more than one book. Even if your profits per book grow smaller, quantity assures they still beat out a single sale. In addition, bulk sales result in more visibility. Notice, however, that I have to do the ordering and distributing and the collecting of funds, which is a small time factor and a larger risk factor. Also, I pass on the shipping costs to the customer, which, incidentally, average out to be MUCH less per book than Amazon’s single-book rate of $3.99.

But who would buy that many books? Classrooms are the most obvious answer. Bookstores, too. But I’ve also been contacted by a reading group who would like to include one of my titles on their list next year. And I made a bulk sale to an organization that was considering my book for an award. (I didn’t win, but I was thrilled to be nominated, and not too disappointed in a 25-book order.) You never know who might become interested, so it’s wise to have a bulk order policy in place.

Now you tell me…have you had any experience selling in bulk? Would you consider it?

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4 thoughts on “Sales Equation: Cheap + Bulk = Profit

  1. Stephanie @ Fairday's Blog

    What a great post! Very helpful to use actual numbers to help explain. I liked that. As a teacher- we often buy a set of books for students to read (either a reading group or whole class). A bulk policy is very helpful and it is nice to know that not only does the school make out, but so does the author. :)

    Reply
    1. Michelle Isenhoff Post author

      It’s nice to cut out the distribution costs for orders like that, but I find it’s too much hassle to sell singles off my blog. So for individual orders, the cost of convenience gets passed on unfortunately.

      Reply

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