Why I never set the Ingram wholesale discount to 55%

I recently advised a publisher who was using one of the Ingram wholesale programs for independent publishers (IngramSpark or Lightning Source) not to discount books 55%, the recommended Ingram wholesale discount. At one time the 55% discount was required for publishers intent on getting their books in bookstores, but in the past few decades it has made less and less sense as Amazon has taken over the industry and bookstores have turned more and more to major releases from big publishers.

Here’s what Ingram says about the 55% discount:

When it comes to Amazon, the problem with huge wholesale discounts is drop-shippers take over the Amazon detail page listing for the book. These are third-party sellers who will order the book wholesale from Ingram, and then sell them as new at a lower price than the KDP official price. The seller of record will be the third party instead of the publishing company. While the publisher will get paid for each sale via IngramSpark or Lightning Source, there are several problems that the publisher will experience:

• The “new” price in the Amazon Buy Box will be discounted on Amazon
• Profits will be lower than selling through Amazon KDP
• Readers usually won’t get the books as quickly from Ingram as they do from Amazon.

Here’s an example:

1. A new book launches with an official price of $20. The seller also sets up the book for a 55% discount on IngramSpark (the recommended Ingram wholesale discount).
2. Seller AcmeBooks makes a listing for the book for $16, and wins the Amazon buy box.
3. When an order comes in, AcmeBooks purchases a copy from Ingram for $9 (55% discount) and pays the extra fees for shipping (typically cheap Media Mail which costs about $4) plus Amazon’s third party seller fees, which might be $2.
4. The difference between their costs ($15) and $16 represents AcmeBook’s profit.
5. The publisher will get $9 minus Ingram’s fees, which is less than what the publisher would get if the KDP book was the lowest price for a new book.

For this reason, my Ingram wholesale discount is 40%. My KDP official price is the lowest price, and I am never undercut by third party sellers drop-shipping the book through Ingram.

I also do not accept returns. I have no expectation that my books will ever be sold in a bookstore, yet I still generate sales through Ingram – I suspect special orders, schools, and libraries make up most customers.

Note that as of this year, Ingram no longer accepts discounts of less than 30% in IngramSpark or LightningSource.

Related: KDP vs. Ingram