What it costs for a best-selling e-book: $12.99

(Polly Becker For The Washington Post)
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Saturday, February 5, 2011; 10:17 PM

Contrary to popular belief, the costs of creating an e-book and a hardcover edition are similar. About 10 percent of hardcover costs go to printing, binding and shipping. Publishers set a retail price for an e-book, and selling agents such as Amazon.com and Apple receive a flat percentage of that retail price. These estimates are based on sales of 75,000. Expenses for a book include one-time costs such as editing and marketing. Many e-books lose money for publishers; e-books that sell millions of copies offset losses from less popular books. - Andrew Schneider

COST TO PUBLISHER$9.09

Author royalties$2.27

Editing/digitizing0.28

Marketing1.00

Overhead3.18

Operating profit2.36

COST TO RETAILER$3.90

Overhead$.50

Digital rights management.10

Pre-tax operating profit3.30

Price to consumer$12.99

Schneider is an MBA student at George Washington University.


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