If you’ve gone into a bookstore and wondered why books are so expensive, you’re not alone. It can be confusing to suddenly witness such a widely affordable product turn into a luxury that few can afford. Have writers and publishing companies simply become greedier, or are there other reasons book prices have gone up?
Here are 7 reasons why books are expensive:
- Publishing includes hidden expenses.
- Profit margins are small.
- Paper shortages are increasing the price of books and ink.
- There is a shortage of printers in the United States.
- Shipping has become more expensive.
- Labor costs have risen.
- There is a greater demand for books.
Any one of these factors considered in a vacuum wouldn’t justify the sudden price jump that the book selling industry has experienced. However, when considered together, they create a better picture of today’s publishing conditions, allowing you to understand that the phenomenon isn’t just a product of uncontrolled greed.
1. Publishing Includes Hidden Expenses
Book publishing includes many hidden expenses. Companies or individuals in each step of the manufacturing chain expect to be paid, and costs will quickly add up. A publishing company invests a lot of money into producing a book, with much of that investment coming before the book even sells.
The biggest expense in the process of creating a book is naturally the writer’s cut. Authors are often paid an advance against future royalty payments, with milestones that include signing the contract, delivering a manuscript, receiving the editor’s approval, and when the book is published.
In a standard contract like that, the publisher has paid the author and hasn’t recouped a penny.
Furthermore, getting a book in a reader’s hands comes with many additional hidden expenses. These are the most common ones.
- Editors who proofread the manuscripts are an additional expense.
- Publishers don’t print the books, so they need to pay for printing.
- Printing companies must pay to buy the paper, pay for shipping and transportation, and the employees who work and maintain the presses.
- When the books are finished, they are transferred to distributors who send them to warehouses.
- The warehouses hold the books until retailers or wholesalers purchase them. The people who keep the warehouses running effectively need to be paid.
- Another transportation expense is added when a retailer or wholesaler buys the books.
- Finally, the bookstore needs to keep the lights on and pay the sales clerks.
You can only imagine the number of salaries and bills that will need to be dealt with throughout this process. A publisher invests a significant sum of money into bringing a book to life, and wants to be rewarded accordingly for their time and effort.
2. Profit Margins Are Small
Publishers and bookstores have small profit margins. The cost of a book is distributed between the bookseller, wholesaler, distributor, and writer. And a very small percentage of the money goes to the publisher.
Here’s a price breakdown based on a book’s list price, the one on the cover. To make the math easier, let’s round up a $19.95 list price to $20.
- A bookstore buys the book for 60% of the list price, which is $12. The other $8 pays for the bookstore’s rent, employees, light and heat, and so on.
- Bookstores typically purchase books from a wholesaler. The wholesaler will pay 45% of the list price ($20), which is $9. The remaining three dollars is used to pay the staff, warehouse, shipping, and sales and customer service representatives.
- Most wholesalers buy from distributors, who also get a small percentage.
- This leaves the publisher, who will earn 33% of the list price from the distributor, or $6.60 per book.
- Out of that $6.60, the publisher needs to pay the author’s royalties, which can be up to 10% of the list price. And printing costs can be around $2 per copy.
- Let’s not leave out the editors, layout, and cover design. Additionally, each book has a marketing budget.
On a $20 book with a print run of 10,000 copies, a publisher might make a small profit, typically one or two dollars.
3. Paper Shortages Are Increasing the Price of Books and Ink
When printers don’t have enough paper, their cost goes up. The lumber shortage affected not only lumber for buildings but also paper pulp. Less lumber means a scarce paper pulp supply. Raw material shortages also affect ink prices.
As consumers have moved away from plastics in packaging and products made from said material (think plastic straws, for example) the demand for pulp to manufacture eco-friendly products has increased.
Additionally, the closing of over 270 paper and pulp mills in China due to environmental laws has contributed to the shortage.
Therefore, pulp prices have nearly doubled in a single year.
Furthermore, because so many people are now ordering more products online, a lot of pulp is being bought by cardboard manufacturers to create shipping boxes.
Graphic books are also taking a beating since they demand higher-quality paper and also a more complicated printing process. However, books are not the only ones being affected. The same supply chain issues are also causing board game and puzzle industries to take a hit.
Ink’s Price Increase
The shortage of raw materials also impacts printing inks. Raw ingredients for printing ink manufacturers, such as resins, monomers, and additives, are in short supply.
This is because many raw material plants in China (a major manufacturer) have closed. This phenomenon is happening due to the Chinese government’s effort to reduce industrial pollution, making it harder for industrial plants to stay in business.
Since China dominates the supply of printing ink raw materials, the short supply of inks affects all aspects of the printing industry.
Therefore, as with any other market, the price increase in raw materials will affect the cost of the final product as well.
4. There Is a Shortage of Printers in the United States
Furthermore, the United States has very few printing plants capable of printing books. Not to mention that some of them went bankrupt during the pandemic.
American printing mills have struggled to turn a profit because of the increases in pulp prices, chemicals, fillers, and other raw materials needed to turn pulp into paper. Some mills simply can’t sustain the escalating costs and make a profit. When these mills close, there are fewer options, a lower supply, and higher prices.
Until 2018, the United States had three leading printing presses. Then one of them, Edwards Brothers Malloy, went bankrupt. Quad and LSC, the surviving two, tried to merge. When the Justice Department started an antitrust case, Quad left the book business. LSC then declared bankruptcy, and its presses were sold off to smaller printers.
These smaller printers still operate. However, they don’t have the economy of scale of the larger printing presses, which is crucial in turning in a sufficient level of profits.
5. Shipping Has Become More Expensive
It has become more expensive to ship books because of the numerous bottlenecks in the supply chain, shortages of truck drivers, and the cost of keeping books in warehouses.
Global distribution networks are currently highly congested. For example, the ports at Los Angeles, New York, and New Jersey are all crowded. As a result, delays of several weeks are not uncommon.
Not only are containers not being moved quickly out of ports, but it is also taking a long time for the materials to be loaded on trains or trucks. Meanwhile, warehouses are overflowing and can’t accept new goods. As a result, everything is stuck.
Additionally, a shortage of truck drivers also contributes to the congestion problem. America needs thousands of truck drivers. Without them, paper, ink, and books cannot be moved quickly enough.
As inventory accumulates in warehouses, waiting to be picked up, the cost of storage rises, increasing overall transportation prices. Additionally, because warehouse expenses have risen, companies that sell luxury items can afford to take up more warehouse space, leaving less expensive goods, such as books, to battle for the remaining space.
As expected, the surge in online purchases also contributes to the congestion.
6. Labor Costs Have Risen
Along with increased costs in materials and shipping, labor costs have also risen. The labor shortage in the United States is another challenge in printing and transporting books.
There aren’t enough press operators to produce books and even fewer truck drivers to transport them to retailers. Wages have risen, yet not enough people are working.
Printing is also facing labor shortages. Many printing operations are located near Amazon or other warehouses. Workers realize they have more options when salaries go up, and they have begun taking advantage of their alternatives.
Because printers are understaffed, adding a third shift to enhance output is also troublesome.
In conclusion, publishers and printing companies must pay more for the paper that goes into a book, the ink used to print the words, the additional time it takes to get a book printed, and more for the printer’s labor.
7. There Is a Greater Demand for Books
Surprisingly, the demand for books has increased, not decreased. With all the talk about streaming platforms like Hulu and Netflix as well as e-books, one would think that books are dying and their trajectory will follow that of MP3 players.
However, the opposite is true. Book sales have increased steadily over the last few years, as the following chart shows.
| 2019 | 693.7 million sold |
| 2020 | 757.9 million |
| 2021 | 825.7 million |
Since we are discussing prices, the format with fewer sales was mass-market paperbacks, which dropped 3.1%. This is surprising, since mass-market paperbacks have the lowest cost.
However, the quality of these books is lower than trade paperbacks or hardcovers, and readers don’t want to buy books that aren’t going to last.
Meanwhile, hardcover book sales increased 10.3%. Adult fiction rose by 25.5%, and Young Adult Fiction sales increased by 30.7%. Obviously, people were sick of not being able to travel, so in 2021, the travel subcategory saw an increase of 23%.
So what is causing this increase in book sales? One theory is digital fatigue. It is not a new trend either. According to the 2019 annual report of the Association of American Publishers, publishers of books in all forms produced about $26 billion in revenue in the United States in 2018, with print accounting for $22.6 billion and e-books responsible for only $2.04 billion. These numbers include all books, including textbooks, non-fiction, and fiction.
Readers report spending over five hours of their daily free time on screens of various kinds. As you can imagine, many of them want to spend less, not more time, staring at a screen. Given that readers can choose a digital device or a physical book, those suffering from digital fatigue will heavily prefer the latter.
Readers can prefer physical books over digital ones for several other reasons:
- The tactile experience of turning the pages and improved graphics.
- Physical books are easier to use. No need to wait for a Kindle to “power up.” And even though a Kindle can “bookmark” a page, bookmarking a physical book is easier.
- Books let others see what is important to you. For example, a shelf of cookbooks tells a friend that you enjoy cooking, while a stack of non-fiction says something entirely different.
So it costs more to make books and people want more books. Short supply and high demand usually lead to higher prices.
Why E-Books Aren’t Cheaper
Many readers believe that e-books should be significantly less expensive than print books. Some publishers argue that producing a book accounts for about 10% of the price. By removing this stage, the cost of a $25 book would only be reduced by around $2.50, lowering the price from $25 to $22.50.
Publishers must still factor in overhead, such as office space, salaries, and author’s fees. Although the printing and distribution costs are not part of an e-book, editing and marketing costs are included in their prices.
- E-books may eliminate some publishing costs, but those costs are replaced by others. The e-book needs to be formatted, so it looks good no matter what device it has been downloaded on.
- Finally, the biggest book publishers pressured Amazon, the largest online bookseller, to raise e-book prices an average of $5 per product.
Therefore, although e-books are somewhat less expensive, don’t expect the prices to go down dramatically.
