In a nutshell, authors receive royalties of only between 7.5 - 10% of the cover price of a print book. The rest of the money goes to pay myriad costs:
...editing, book design including cover, any advertising including the publisher's catalogue, printing, paper, shipping and other distribution transport costs, warehousing, and the surprisingly large cut taken by the retailer. Oh yes, and profits. I know that it is said that the way to make a million in publishing is to start with £10m, but somebody out there is making some money out of publishing, trust me.Although:
A few fundamental and important costs remain, such as editorial, design, advertising and creating the digital file ...Most of these costs do not apply, of course, to the digital version of the product. There are :
No more warehouses, no more lorries full of books trundling up and down the land, no more paper and printing and ink, no more acres of expensive retail space. ...Shouldn't authors therefore be paid more for their work? Should they be jumping up and down in protest? There's a lively discussion going on in the comments to the post with publishers and editors among those sharing their views.
Whatever the truth of it, this is a debate that clearly needs to happen and it isn't going to go away any time soon.