Textbook dollar breakdown.

Here's the graphic I was talking about in class last time. It's from the National Association of College Stores (NACS), so it's industry-produced (that may or may not be a good thing). The first slice you see is for author income, but as it says, that includes what's used to cover expenses. I went to this presentation at the 2006 NACS conference and they broke it down further, the actual profit that authors make is closer to 5 cents per dollar.

Court

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1. Author Income : 11.8 ¢
Author's royalty payment from which author pays research and writing expenses.

2. Publisher's Paper, Printing & Editorial Costs : 32.8 ¢
All manufacturing costs from editing to paper costs to disctribution, as well as storage, record keeping, billing, publisher's offices, employee's salaries and benefits.


3. Publisher's Income : 7.2 ¢
After-tax income from which the publisher pays for new product development, author advances, market research, and dividend to stockholders.


4. Publisher's General and Administrative : 10.2 ¢
Including federal, state and local taxes, excluding sales tax, paid by the publishers.


5. Publisher's Marketing Costs : 15.6 ¢
Marketing, advertising, promotion, publisher's field staff, professors' free copies.


6. Freight Expense : 1.0 ¢
The cost of getting books from the publisher's warehouse or bindery to the college store. Park of cost of goods sold paid to freight company.


7. College Store Personnel : 11.0 ¢
Store employee's salaries and benefits to handle ordering, receiving, pricing, shelving, cashiers, customer service, refund desk and sending extra textbooks back to the publisher.


8. College Store Operations : 6.3 ¢
Insurance, utilities, building and equipment rent and maintenance, accounting and data processing charges and other overhead paid by college stores.


9. College Store Income (pre-tax*) : 4.1 ¢
* Note: The amount of federal, state and/or local tax, and therefore the amount and use of any after-tax profit, is determined by the store's ownership, and usually depends on whether the college store is owned by an institution of higher education, a contract management company, a cooperative, a foundation, or by private individuals.


Please Note
The statistics in this illustration reflect the most current 2002-2003 financial data gathered by the National Association of College Stores and financial data provided by the Association of American Publishers. These numbers are averages and do not represent a particular publisher or store.