IngramSpark announced that as of August 31 the minimum wholesale discount for books distributed through them in the United States will be 40%. Previously it was possible to set discount as low as 30% which made IngramSpark a very attractive option for self-publishing authors looking to improve their profit from paperback distribution. We covered this topic in depth in our article about IngramSpark.
IngramSpark email to authors
Certain booksellers and online retailers that purchase content through our wholesale distribution network now require that books purchased within the United States have a 40% minimum wholesale discount.
As a result, IngramSpark’s minimum wholesale discount has been adjusted to 40% for the United States market effective August 31, 2023. Books enabled for distribution must meet the minimum wholesale discount (…) or they may be removed 1 from distribution.
If you do not update your wholesale discount by October 30, 2023, your book(s) may be removed 1 from wholesale distribution within the United States.
1 emphasis ours
The wording of the announcement is quite vague. It's clear Ingram faces pressure from one or more unnamed book retailers in the US to take action against low wholesale discounts set by authors and publishers distributing through them. Note, however, that even though the deadline to adjust the discounts is said to be October 30, the same sentence states the books "may" be removed from distribution, not that they "will".
Our guess is that after this date only the unnamed retailer(s) might no longer list and sell the books with discount set lower than 40%, but others will continue to sell the book. It's possible IngramSpark will take more definitive steps to eliminate 30% discount at a later date if not enough authors comply with the request but the wording above does not indicate certain removal of the currently distributed book(s) from distribution if you decide to keep the US discount at 30%.
After this change the minimum wholesale discounts you can set for specific distribution markets on IngramSpark, when setting up new book or changing pricing for the existing one, are as follows:
This means that your compensation from IngramSpark-distributed paperbacks and hardbacks in the US will be lower by exactly 10% of the list price you set for your book.
EXAMPLE: Your paperback's list price was $10 and the printing charge was $5.5. The wholesale discount of 30% "consumed" $3. As a result, you were getting $1.5 in profit for each copy sold ($10 list price - $3 distribution cost - $5.5 printing charge). Now, with the wholesale discount increasing from 30% to 40%, you will get $1 (i.e. 10% of $10) less, which means your remaining profit is only $0.5 (three times less than what it was previously).
Please note that these changes affect, for certain, only newly set up books or ones for which you will be changing pricing. However, vague language of Ingram's announcement suggests existing books won't be affected at least until the end of October. If the US wholesale discount for your books distributed via IngramSpark is currently at 30% and you change it to 40%, it will impact:
So what should you do if you are using 30% wholesale discount for paperbacks or hardbacks on IngramSpark right now?
Determine the impact of the change on your profit:
Make a decision which path to take:
Option A: Play it safe by going ahead and changing the US wholesale discount for your existing books. This will guarantee your print editions will continue to be distributed by IngramSpark but it also means you will be lowering your profit from sales of Ingram-distributed paperbacks and hardcovers.
Option B: Wait it out and see what happens. Once October 30 deadline is behind us, see if your book is still distributed on barnesandnoble.com and elsewhere in the US (other than Amazon.com). If you notice it was removed from a specific retailer, or you notice a significant decrease in sales that can't be attributed to changes in your marketing, consider whether getting those sales back is worth the significant compensation cut resulting from the higher discount. There is only one problem - IngramSpark reports sales by country, not by retailer, so if and when your sales drop you won't be able to attribute that change to a specific retailer removing your book from distribution (as a result of not meeting their wholesale discount requirements).
If you are making significant sales in the US through IngramSpark right now, our suggestion would be to watch your sales reports closely to catch any sudden drop in sales which might mean your book was removed from distribution at a retailer where you were getting significant sales. If you notice no adverse change on your sales wait until at least October 30 deadline to change the discount. Keep in mind that whatever happens after October 30, your Amazon sales won't be affected, as long as you have United States market enabled for your KDP paperbacks (which is the default).
If you are yet to publish your first book or will publish more books in the future, you won't have a choice but to set 40% wholesale discount for the US market on IngramSpark. Alternatively, you might decide not to use IngramSpark at all (or forego distribution and just use them for printing copies you order directly from Ingram).
Recent increases of printing charges on IngramSpark coupled with this wholesale discount change make IngramSpark much less attractive option than it was in the last several years, but it can still be useful tool in your self-publishing toolbox. Do not panic, consider the actual impact of this change in your situation, and make a decision that's best for your publishing business.