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Print On Demand Might Come to a Store Near You

16 June 2012

From Borderlands Books:

A few weeks ago I posted something about in-store print-on-demand machines that got a fair amount of attention and interest (Print-On-Demand Not Coming to a Store Near You).  The problem was that the only hard figures I could find for that post were based on two rather old articles.

. . . .

First off, I was wrong.  There does seem to be a financially viable way for large and mid-sized stores to have an Espresso Book Machine on site.

. . . .

I want to run down some of the basic costs associated with the Espresso Book Machine (henceforth “EBM”) based on current pricing and actual installed usage.

. . . .

Initial Purchase
Machine Cost:  $101,000
Software License Fee:  $15,000 for 5 years (note 1)
Set Up and Training Cost:  $3,500 (note 2)
Total:  $119,500

Operating Costs (per book – note 3)
Content Fee:  $0.70
Transaction Fee:  $1.00
Materials:  $1.74
Maintenance & Utilities:  $1.83
Total:  $5.27

Average retail price per book is $14.55 (note 3).

. . . .

At $14.55 retail minus $5.27 in materials fees leaves $9.28 profit per book.  Borderlands is open 8 hours per day, 362 days per year.  At the rate of one book per hour, the profit in a year is $26,847.88.  Based on the cost of the machine, I would pay off the machine and start making a profit in 4 years and 5 months.  At the rate of 3 books per hour, the machine pays off in a year and a half.

. . . .

Books that can be printed on the EBM fall into four categories.  Academic titles, which are uncommon and quite expensive, public domain titles which are essentially free and provided by Google’s huge database of titles, books from publishers, and “self-published” titles.

. . . .

The only one of the big six publishers whose books are available for the EBM is Harper Collins and, even in that case, the only titles are their back-list (i.e. titles older than about six months) trade paperbacks (not their hardcovers or mass market paperbacks).  All of the independent press titles printed by Lightning Source, which is the largest on-demand publisher, are also available.

. . . .

So, what books actually sell and how many of them?

Based on the current installed base of machines, stores sell between 7000 and 14,000 books per year.  For Borderlands that would work out to between 2.4 and 5 books per hour, which is damn good.

But here’s the surprise — most of the books sold are neither public domain titles via Google nor are they in-print titles from publishers.  In the first year, 90% of the books printed by the current crop of in-store POD machines are self-published by customersof the bookstore.  In other words, someone comes into the store with an electronic file of their book, gives it to the store, and then the store prints it for them on the EBM.

The good news here is that there is an additional income stream from such self-published books.  Marketing materials from On-Demand Books suggest that most stores charge a set-up fee of around $150 per title to set up the file to print.

Link to the rest at Borderlands Books

Self-Publishing

17 Comments to “Print On Demand Might Come to a Store Near You”

  1. *makes a note that Lightning Source may need further investigation*

  2. I have watched the video of the EBM in action and I don’t see why it needs to cost more than a very nice car.

    The printers it needs cost less than $5,000 a piece retail. The rest of the machine is a cutter a binder and a clamping system. Nothing revolutionary, no exotic materials, no new mechanisms, nothing that says anything but “We figured out how to put all these things in one box. So all you need to do is push the button.”

    Yes there is software involved but most of that is probably for the Catalog. The machine itself just needs to know the size of book to cut once it has been printed.

    Also what happens to the machine if you don’t renew the software license? Can it still print from files but not from catalog or does it just stop working all together. (The second note in the article says it stops working)

    A reasonable price for the machine that can print from files would be less than $50,000. A license to access the catalog for published books would be acceptable.

    Until the catalog gets larger and the up front cost is lower I don’t see the EBM as Practical for a small book shop.

    B.S.

    • The printer/copier inside an EBM is a Xerox 4112 which lists for over $60,000. There is no $5,000 printer/copier that could support the volume necessary for an EBM. at least that I am aware of.

      • Thanks for the correction. That does explain the price better. I still stand by my conclusion though.

        “Until the catalog gets larger and the up front cost is lower I don’t see the EBM as Practical for a small book shop.”

        B.S.

  3. If B&N got behind POS POD (point of sale print on demand) they could go to the publishers and say

    “You Know that returns system you don’t like but we aren’t willing to give up? This machine could fix that. You put you catalog up for everything that isn’t in hardcover and we print up only what we need at each of our stores.”

    They could even do the video store thing where they have the covers with a sample on the shelf and when the customer finds something they like the take it to a clerk and have it printed.

    B.S.

    • No more waiting or walking out without a book. It would take team work though and publishers can only do that when price fixing.

    • In the long term, it would be so logical for publishing companies to take mss, produce them as books, and pass the files on to bookstores to be printed; let the printing presses be run and managed by the bookstores. Let the supply be where the demand is.

      Except the publishing companies already have huge investments in presses (and more important, unionized staff to run them) and contracts with the distributors (and their unions), who would frankly freak. They’d probably rather die than let somebody else do the printing.

      So when this happens, it won’t come from trad pub. You know what? Distributors should be changing their business models, which are rapidly being undercut anyway. Let the distributors finance POD presses and lease them to bookstores. Then, please God, the poor fools can stop trying to claim a percentage for e-book distribution, which is so senseless it hurts just to think about, and step into the twenty-first century with the rest of us.

  4. When I look at those costs per book, I don’t see anything at all going to the author. Unless you are printing and selling public-domain books exclusively, it’s going to take considerably more books than that before you break even.

    How typical of someone in the print book business to think of the writer as the only person who doesn’t need to be paid!

    • I noted that. .70c content fee is 0% to anyone. It must be different for non-PD works.

  5. It is probably in the:

    “Content Fee: $0.70”

    If it is then I can see why the big publishers aren’t using it.

    B.S.

    • I can see why the big publishers aren’t using it.

      Or anyone else. 70 cents out of an average $14.55 sale? That’s less than 5 percent. Who do these guys think they are, Harlequin?

      B.S.

      Agreed.

  6. The good news here is that there is an additional income stream from such self-published books. Marketing materials from On-Demand Books suggest that most stores charge a set-up fee of around $150 per title to set up the file to print.

    Additional income stream = stick it to people. $150 set up fee? Really? Man, somebody seriously needs to learn about CreateSpace or LuLu. For $150, I can order 40 copies of my book and get change back.

    • That was my thought. $150 setup plus $5 per book vs $0 setup plus $4-5 and shipping per book through Createspace; seems like a no-brainer unless I want a lot of copies or need them right now.

      It seems like a great idea, but the cost needs to come down to make it competitive with other PoD services.

  7. I have used the EBM at Harvard Book Store several times to print bound proofs. I now find it to be far too expensive for that purpose when compared to CreateSpace. I discuss the costs of using the EBM for this purpose in the following blog post. http://appazoogle.com/2012/06/05/working-with-the-evil-empire-part-i-deciding-to-self-publish-with-amazon/

    Casey Brown
    @aurdraco

  8. Five years ago this would have been brilliant, maybe even a game-changer. Ten years ago it would have been a revolution. Today, I get the feeling that technology has already passed this system by. I can see how Barnes and Noble could be turned into something like a video store with these (as mentioned above) but what’s the point? Fifty percent of the old paper market will probably be digital in the next few years and those customers that remain will make up an ever dwindling market. And when B&N has to downsize, laying off thousands of people and moving their shops into old video stores (or similar dark, dingy storefronts), how many customers will be streaming in to gaze longingly at faded and torn book covers?

    They really should have done this before now. If they had, the tech would have become cheaper and big bookstores might have snagged the lion’s share of the Indie market before it even became a market. Embracing this now, at this late stage in the game, sounds to me like an act of desperation. The good news is that if they follow through, there will probably be lots of used printing machines on the market at bargain basement prices a few years from now, and small independent bookstores can snatch them up to shore up their re-surging business models.

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