The World of Net Receipts

One of the things my Dad told me to blog about when we were happily sitting next to each other on my mother’s couch last weekend, both working on Casperian business on separate laptops, was how net receipts are calculated.

That’s not quite as easy as it sounds, because there are a lot of variables to consider. Generally speaking, what gets deducted from the total retail price of a book is the following: the book’s printing cost, the printer’s shipping cost, our packaging cost, our net shipping cost, and the Paypal fees.

The book’s printing cost is easy. Usually it’s (page count x $0.015) +$0.90, but sometimes it’s less due to volume discounts for larger orders. All other costs are variable. The printer’s shipping cost, for example, depends on quantity and weight of books shipped, and UPS’ current shipping rates (which are fuel dependent). Generally, that works out at around $0.80-$1.25 per book at the moment. The packaging cost currently is $0.60, which covers boxes/packing tape/shipping labels, etc. This gets adjusted on an as-needed basis and is charged per retail order shipment (i.e. if a customer orders three books in the same shipment, there is only one $0.60 packaging charge divided between all three books). Our net shipping cost is also variable depending on weight, shipping method, and ship-to location. For instance, media mail shipments in the US for a book of less than 1 lb incur a shipping charge of $2.41; international shipments to anywhere except Canada a shipping charge of $2.85 after deduction of the amount charged to the end customer. Paypal fees for payments received from domestic customers are 2.9% of transaction value + $0.30 (3.9% +$0.30 for international), so for a $15 book with media mail shipping in the US, the Paypal fee is $0.74.

So, for instance, for a copy of The Tea House that sells through our website for $13.50 with media mail shipping, today’s net receipts would be $13.50 – ($3.48+$0.93+$0.60+$2.41+$0.74) = $5.34. For a copy of Mind Fuck that gets shipped to England, today’s net receipts would be $15 – ($4.86+$1.23+$0.60+($11.35-$8.50)+$1.22) = $4.24.

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