This method gives the publisher freedom: publishers set the price for end users. If there is a promotion, all of us (publishers and distributors) share the costs and revenues.
Wholesale model is the traditional model of book publishing. Traditionally, bookshops had to buy their stock at a price set by the publisher, and then they sold the books at a price they wished to sell them.
In the wholesale model today, publishers set a digital list price, but the retailer sets the final price for ebooks.
Seasoned readers know where to look for their digital favourites: in the libraries. Libraries usually buy a book once, and anyone who is a member of the library can read that book. Let’s see some ways publishers can ensure to keep their profits high while not losing out on readers.
Libraries may buy a book permanently, for a limited period (‘expiration date’) or for a certain number of checkouts. If this happens, libraries often pay a higher price, multiplying the digital list price.
Another possible model is pay per use: for example, 10% of digital list price for 21 days. If your book is priced at 10 USD, you get 10% of $10.00 = 1 USD for a 21-day loan. After the 21 day period, the title must be repurchased for another 21 days. This option allows librarians to meet a short-term demand for a popular title without having to overburden their budgets or turn patron away if their ‘permanent collection copies’ are already borrowed.
Subscription based models yield different results depending on the store. Some distributors pay a percentage of the digital list price if more than 10% of the book was read. Other subscription-based business models cut the text into multiple parts and pay based on the number of pages read. This way publishers earn as much as the ebooks were read, not more, not less.
Revenue share model
Certain subscription services work with the revenue share model.
In the revenue share model, the publisher is receiving a share of the total subscription revenue of the store. For example, books on Tookbook receive a share of the total subscription revenue depending on how many times their book was borrowed compared to how many times other books were borrowed.
Episodic Transaction Model
Currently, this unique pricing model is only used by Dream reading app.
With the episodic transaction model, readers pay to unlock episodes of content, rather than buying the entire book at once. Every book is divided into 1000-word segments. $1.00 pays for 100 coins and 1 coin unlocks 10,000 words. So, $1.00 could unlock a 10,000-word story.
However, 10% of every book is offered for free so readers can have a preview. So, a book with 50,000 words may retail for $4.50 USD (45,000 words / 10,000). The author’s royalty rate is up to 25% of the retail price.