Should you print your full color picture books overseas or print-on-demand (POD).
Let’s take a hard look at numbers. Yes, math. As a small business, you must keep track of your cost-of-goods! In the end, it’s all about balancing profits with risks.
First, some terms.
Offset printing means that the book is printed on a large printing press that produces the highest standard of quality. The books are then bound, and shipped to a warehouse until they are sent to the distributor for sales and fulfillment.
Print-on-demand means that you book lives as a digital file on a printer’s server until someone orders the book. Then, it is printed and drop-shipped directly to the customer. KDP, Ingram Spark, and Lulu are the biggest POD printers. NOTE: You are the publisher! They are merely your printers.
The question is which method is the most profitable. To understand that, we need to look at the cost to deliver a finished book to the customer.
OFFSET Printing - Overseas
Printers in China, India, Indonesia and other Asian countries are able to offer the lowest cost for printed full-color picture books. Always. For a 8.5” x 8.5” full-color hardcover picture book, if you order 5000 copies and up, the cost will be less than $1.00 USD. However, the books must then be shipped to the US and stored in a warehouse. Let’s say that you want to use Amazon’s Advantage program to sell the book on the Amazon platform.
8.5” x 8.5” , 32 pages, paperback full color interior, gloss cover - Print cost + shipping fees = $0.98/book.
RETAIL PRICE: $8.99
Amazon referral fees - $1.35/sale
Fulfillment by Amazon fees - $2.64/sale
Shipping to Amazon - $.50/book
TOTAL FEES = $4.49
Profit: $8.99 - $4.49 (fees & shipping) - ($0.98) Print costs = $3.52 profit/book
8.5” x 8.5”, 32 pages, paperback full color interior, gloss cover - Print cost = $3.65/book
RETAIL PRICE: $8.99
AMAZON Distribution fee: $3.60
Profit: $8.99 - 3.65 (Print) - 3.60 (distribution) = $1.74
In this example, POD printing has about half the gross profit of offset printing. The associated Amazon fees are less, but printing is much higher. The actual figures may vary depending on your print size, cost of overseas printing, and which POD printer you choose to use. You should do your own calculations for both scenarios.
What is Your Time Worth?
This type calculation always leaves me with one big question. What is my time worth? With a POD sale, I just have to set up the files once and sales run smoothly in the background.
With offset printing overseas, you must get bids from offshore printers and administer the shipment from your warehouse to Amazon’s fulfillment center. The administrative time required would be variable, and would presumably get easier as you repeat the process.
I prefer to accept a lower profit so that I can spend more time writing. I believe that the more books I write and publish, my overall profits will rise. If I’m constantly worrying about administration tasks, I have less time to write. It’s a choice you can make for yourself.
Advantages and Disadvantages
Beyond just a straight comparison of costs, there are other considerations.
Initial Investment. POD requires minimal upfront investment of cash. For those early in their careers, it means a simple entry into the market. What other type of business allow you to enter the market for such minimal upfront investment?
Offset printing requires large—and risky—outlays of money to print because this type printing is only profitable on large orders. The larger the order, the smaller the per book costs. If you print 20,000 books upfront, your per book cost plummets, but your risks increase.
Ongoing Costs. POD has no ongoing costs, because your book is just a digital file until it is ordered. Offset printing, however, means you must warehouse and ship to your distribution center or to Amazon. These have associated fees and administration times involved.
Quality of printing. Offset printing is the gold standard and will always be a higher quality. However, POD printing has improved dramatically. Lulu offers coated papers (unlike KDP and Ingram) which means the quality is very good.
Special Printing. If you want to do a board book, popup book or other book with special printing needs, you’ll have to do an offset printing. POD printers only do a normal type of book.
Offset AND POD?
Can you do both offset printing and POD? Of course.
YOU are the publisher! You are free to take your files wherever you want, whenever you want, for any reason. You answer to no one but yourself (and your budget!).
For beginning indie publishers, I’d recommend starting with POD printing because it is less upfront costs. Also, you don’t know which of your books will sell best until you’ve done a couple. If at some point, you have a runaway best seller, you can always switch to offset printing. If you’re selling 1000 copies of a title/month—consistently—you may want to print a year’s supply of 12,000 so you can take advantage of the higher profit margins. But until you know your sales figures, it’s risky to print large quantities. As we all know, marketing is the hardest part of this business, and the market can be volatile (witness the ups and downs during COVID). Manage the risks that come to new indie publishers with POD until you have proven successes that you can take to offset.
For experienced indie publishers who can project their sales figures with some accuracy, offset printing makes sense. The margins are higher and profit is larger. It does mean more administrative tasks, but perhaps you can hire help at that point. However, keep in mind that printing in volume is risky. Keep enough reserves in your budget to survive a big loss.
At any stage, if you receive a large order, consider offset printing. In the last year, I’ve had one order of 1653 books that I fulfilled with a POD order because they needed the books within two weeks. On the other hand, I’ve had orders for 5000 books for which I used offset printing. They gave me a three month deadline for delivery, which allowed me the extra time needed to set up files with a US offset printer who could then ship to my customer on time. The profit was higher because the per book costs were lower, and it was a direct order (bypassing a distribution platform such as Amazon). For an overseas printer and potentially even higher profits, I’d likely need an even longer lead time.
You are the publisher. You set your budgets, decide on your profit margins, and make any printing changes whenever you need, however you need. You are in control.