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  1. BayView

    BayView Contributing Member Contributor

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    Profit and Loss in Publishing

    Discussion in 'Publishing' started by BayView, Jul 8, 2015.

    Not sure if this would be interesting for anyone else, but I thought it was useful...

    http://janefriedman.com/2015/07/08/book-pl/

    Jane Friedman has had a variety of jobs within publishing, and she goes over the P&L statement, a tool most publishers use to determine which books to publish. There are some frustrating opacities (like what tools they use to estimate how many sales to expect) but it does give a bit of insight, at least.

    I was surprised by how high of a margin they expect books to earn, considering that at least some of the company overhead costs seem to be built into the expense column.
     
    NigeTheHat, Ivana and TWErvin2 like this.
  2. TWErvin2

    TWErvin2 Contributing Member Contributor

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    Interesting article. I knew the basics (from reading, talking to or listening to editor/agent presentations, etc.) but never have seen all the pieces put together in one place like this. Thanks for sharing it.
     
  3. NigeTheHat

    NigeTheHat Contributing Member Contributor

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    That looks pretty familiar :)

    I think some of her formulae are dodgy - she seems to be completely discounting the cost of producing returned books - but that doesn't really affect things from a here's-what-publishers-are-looking-at point of view.

    Bigger publishers might have something more sophisticated, but in my experience there aren't really any tools for estimating sales. You just look at how similar things have done and make a guess based on those. If you don't have similar things, you just guess. And sometimes, think 'this looks interesting I want to make it. We'll need to sell 500 copies to be profitable. So let's estimate 550 sales for REASONS'.
     
  4. Urban Profanity

    Urban Profanity Member

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    It's a strange format for a p&l - usually the revenue is listed above the costs, but it is an interesting read, and a good insight into the processes used by publishers. The sales forecast methodology seems a little strange as well. For a new author I would have thought they would have a total sales for each genre or style, and then worked off a percentage of what a new author in that segment sold on average, allowing for some movement up or down based on the instinct or experience of the acquiring editor.
     

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