...and Textbook Costs

While I'm at it, here's information from the National Association of College Stores (NACS) on how the "textbook dollar" breaks down (how much of every dollar spent goes where). 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 and 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.