Book discounting is a particularly complex area of publishing. It can be enabled via many different contract clauses, and when it happens it can take several different forms.
When an author’s main royalty is based on the retail price of the book, a separate, lower royalty is usually specified in the contract for sales at a discount of, say, 52% or more. This is known as a high discount.
When the author’s main royalty is based on net receipts (the amount received by the publisher from the bookseller) the amount the author receives per copy is automatically reduced, along with the price the bookseller pays to the publisher.
The result is a proportionately lower royalty paid to the author.
Bulk sales and ultra-high discounts
Special sales (also known as bulk sales or ultra-high discounts), where a publisher sells many copies of a book at huge discount, form an increasingly large part of the book-selling market.
Such deals can be enabled through a range of clauses in a publishing contract, for instance ‘book club and similar’, ‘co-edition’, ‘special’, ‘premium’, ‘mail order’, ‘own brand’, ‘sales at discounts of 80% or more’, or ‘supermarket’. They can also include ‘non-traditional retail outlets’, which covers outlets such as museum shops, cafes and high-street retail chains, which are becoming an increasingly significant market for certain publications, including craft, cookery, and art books.
The purchaser pays a very low price per copy for a large quantity of copies, but pays up-front and ‘firm’ for all those copies. Knowing at the outset that such payment is guaranteed, and factoring in economies of scale, can affect the publisher’s budgeting decisions for the work, particularly with highly illustrated works which remain disproportionately expensive to produce.
Publishers say that such deals can be useful for books that have been selling poorly. They can also be used to give a boost to an author’s backlist titles in the wake of publication of a new title, or to promote a special edition of a book, with a different jacket and special market.
The huge discounts offered on these books mean that they tend to be sold on for a very low price. Publishers tell us that they do not believe that such sales compete with full price sales and reach new markets.