The publishing industry is built on a few different functions that get a finished product into the hands of the awaiting public. There are the Editorial and Developmental teams, the Production and Manufacturing teams, followed by the Customer Service, Marketing, Sales and Accounting teams that make the entire operation work to completion. Interspersed there will be other teams that contribute like the Information Technology team, Research and Development team and the Executive team, but this is the line-up of a fairly basic publishing enterprise. All of this activity is based on one very important item: The UNIT.
What is the Unit?
Loosely translated, the unit is your final sellable product: Whether it is a print book, a print-on-demand book, an e-book, an enhanced e-book, a database, or any variation on these particular items. The lifeblood of any organization is how well the unit will sell in the marketplace. The process begins by assessing all the different aspects that will contribute to costs in the final preparation of the unit. The unit cost, which is defined as the amount of money it takes to make one unit copy of the product, is determined by taking all of the associated costs to finalize the unit, combining them into a total, and then dividing that total by the number of books you want to print in your first printrun.
A Sample Unit Cost Breakdown
Editorial and Development: $2500
Photos and Figures: $2500
Design and layout: $5000
Cover/jacket design: $2500
First Printing: $7500 (3000 first printrun)
Total: $31,500/3000 = $10.50 total unit cost
This cost is composed of both plant and variable costs. Plant costs are all the costs which are assumed to be one-time costs in the life of that particular title. These would include: design, copyediting, composition, proofreading, indexing, cover/jacket design. The other costs would entail Variable costs which would be those that are forthcoming from the printer in the process of finalizing the run for shipment. These costs would include: Paper, printing, cover make-up and binding, jacketing (if applicable), shrink-wrapping/cartoning and final shipping to the warehouse.
Why is this Unit Stuff so Important?
This information is extremely important to determine how closely a title will come to delivering a revenue stream that is in the black instead of in the red when the final analysis is run by the financial mavens in the Accounting department. Normally, the financial minds will complete a Profit and Loss statement that will give an estimated breakdown projection of how well the content should sell when it is put into the marketplace. The actual costs are unknown, but estimated costs are used to build a projection and also solidify a number for a price on the title based on the guidelines of the individual publishing company. Also, the P & L is an extremely important document in the formulation of the print-run, which gives us our final unit cost. It’s always a good idea to UNDERSHOOT your sales projections by a percentage to ensure that if the content does not take off in the market you are not left with a dog of a title in the warehouse.
Know your market and your customers. If you lose touch with what your customers want to buy, you will find yourself in a warehouse full of books that no one wants, and a “For Rent” sign on your office door.
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