The unit cost, the cost of manufacturing a single copy of a book, consists of two elements: the fixed costs and the variable, running costs.

Fixed costs

The fixed costs are those that you incur whether you print one copy or one million. These include typesetting, copyediting, design, permissions fees for quotations and illustrations, drawing interior and cover art, proofreading, making an index, printing ARCs. Printer origination, including file manipulation, platemaking and press makeready, might be included here (it is invariable). However it is often just left as part of the printing cost, which makes up the running cost along with paper, binding, jacketing, cartoning, and, if it is included in unit cost rather than overhead as it usually is, the cost of shipping to the warehouse. Once your book is on press you begin incurring running costs — the cost of presswork, paper, binding etc.

Running costs

Running costs when looked at per copy are relatively small — little quarters and dimes running along to the printer’s bank account — whereas that wad of Benjamins representing the fixed costs always looks pretty significant. The economics of book manufacturing mandate that the longer the machines run the lower the cost per copy, and it is this mechanical and marketing quirk which tempts publishers to run more and more copies in order to bring their unit costs down. This is of course a mathematical illusion. If you run a million copies your running cost will indeed be less per copy than if you print a thousand — but it doesn’t take an Einstein to recognize that you’ll have spent more money. If you never sell those 999,000 additional copies — problem!

The really important numbers in book publishing are

  1. the ideal retail price and
  2. the number of copies you can expect to sell.

The unit cost — the cost of making each single copy, the running cost added to the fixed costs divided by print run — is however the number which has acquired an overwhelming importance in the minds of book publishers. I personally think this is because the really important numbers are very difficult to calculate (maybe impossible to calculate), so publishers indulge in unit cost manipulations as a sort of displacement activity in order to make themselves look like they are being rational and scientific about things — thus disguising the fact that they are ultimately just going on hunches about the really important numbers.

Of course the amount you pay to manufacture your books is an important factor in your business. This is best taken care of by a forceful negotiation with your suppliers over a contract covering an extended period. If your price picture is X, doing endless estimates involving different quantities just wastes time as the answer is always going to be a function of X. Of course, the more copies you print, the lower your unit cost will be. This means that doing endless unit cost calculations, solving for different unit costs will cause unit cost to look vitally important. However, apart from wasting a lot of time, these calculations can only have one result, which is to make you decide to print more and more copies. We all know that printing more copies than you can sell is the high road to Queer Street: tie all of your capital up in unsold inventory, and insolvency is just around the corner. Excessive costing is dangerous to corporate health.