Canelo / Arts Council England

Canelo / Arts Council England | 

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Literature in the 21st Century: Understanding Models of Support for Literary Fiction

sharing or collaboration with larger publishers would be immensely 

helpful, but was unlikely in the current market to occur, not least 

because of the time pressure on all concerned. 

The general situation, then, is for consolidation at the top, inversely 

mirrored by a flourishing of new small independents. Whether large 

or small, however, the economics for publishers remain challenging. 

We have seen that sales and prices are both down; what this doesn’t 

capture is the publisher-side costs and challenges. One publisher gave 

us an indication of their cost structure. Production costs on a paperback, 

including cover and typesetting, tended to work out at around £1.80 per 

unit on a print run of 1000 to 2000 copies, normal for a typical literary 

fiction title (not a break out or a big name). The books then retail at 

£7.99 to £8.99, and big retailers typically take a percentage of between 

50% and 57.5% of the cover price. This, however, would only be on a 

small order of around 400 copies. Orders above this number from the 

big chains tended to carry an even higher percentage. Often the retailer 

would ask for a ‘retro’ – that is, a further sum to be paid by the publisher 

on each copy sold. This could be up to 75p per unit. Discounts as high 

as 68% were not unheard of. 

And all of this is before returns are factored in. Bookselling operates 

under an unusual system of sale-or-return, whereby if a book 

doesn’t sell, the bookseller is able to return it to the publisher and 

be reimbursed (within a certain time frame). Unlike most industries, 

financial and inventory risk is here loaded onto the producer rather 

than the retailer. The idea was that this would encourage retailers to 

stock new and untested books – but the system can be catastrophic 

for publishers, with returns of a half to two-thirds of sales not unusual 

according to those we spoke to. This figure is not uncontested: in an 

interview with the writer Jorge Carrión, James Daunt, the Waterstone’s 

boss, claims that Waterstone’s returns have ‘gone from 27 to 3 per 

cent and my aim is nil.’

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 While no one we spoke to in publishing cited 

returns levels this low, there was certainly a feeling that Waterstone’s 

new buying practices had contributed to lower returns, although this 

came about because their initial orders were lower. 

Factor in, as well, that small publishers will have to pay distribution and 

sales fees, which were quoted to us as around 25% of sales and the 

situation is clearly challenging, even before marketing costs, writers’ 

advances and overheads are considered. 

The mathematics of literary publishing are, then, exceptionally tough. 

Say you’ve printed 2000 copies of a book by a debut author. You get 

lucky and sell 600 to a major chain. This, after discount, nets the 

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Carrión 2016, p205

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