Measuring Profitability

May 2008
by Linda Carlson

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Measuring Profitability

by Linda Carlson

Do you know which of your titles is the most profitable?

“The one that sells the best,” some PMA members told me, while others responded, “The one that sells for the highest price.”

True? You may want to run the numbers—all the numbers—to make sure.

Ideally, the revenue for each book is matched with such direct expenses as editing, design, printing, promotion, advertising, awards-program entry fees, costs of review copies and shipping on each sale, and royalties. If you have more than one title or you have other products and services, it’s also useful to have a method of accurately apportioning overhead—warehouse space, exhibit costs, and the time of the publicity, customer service, fulfillment, and accounting staff. In a perfect world, you could determine how many books were sold as a result of each promotion, and how much you made on each of those sales.

If you don’t run these kinds of numbers, you’ll never know how much each sale costs you. You won’t know whether this year’s new title has generated enough revenue to cover the cost of its direct mail campaign, the cost of the hours the publicist spends on the phone coordinating author appearances—or the cost of…IBPA Members – Click here to view the full article (login required).

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