What were the initial challenges that you faced?

1. Building a professional organization with qualified staff was the first problem. We found editors from weekly magazines and worked with them so they could adapt to editing books.
2. Sales were quite difficult. The Tamil book space is highly unorganized. We had to struggle to get qualified sales people. We had to hire them from other places and train them.
3. The book shops were not growing in number. Sales in the existing shops were also flat. We had to think differently to increase the sales. We started looking at books as FMCG products, and had to build a complete distribution mechanism with stockists, distributors etc, and also build more display space through departmental stores, restaurants, textile shops, kirana shops etc.
4. Trade discount and credit period were a complete mess. We had to introduce methods by which we could get our monies promptly. This took a lot of effort and we had to forsake some business, as the retailers didn’t like our methods. But as we were producing high-quality, fast-selling titles, we succeeded in establishing ourselves.

What is the business model of printed book publishing?
The retailer/distribution sales channel is given a trade discount on the MRP of the book. In the English book industry, it is in the range of 50-60%. In Tamil, the maximum will be 35%. The authors are paid on a royalty basis. In the English industry, in general, it could go from 5%, 7.5% to 10% or in some cases as much as 12.5%. It varies from company to company and author to author. The royalty percentages on overseas sales or translations may vary. The royalty maybe on the net receivables or the gross MRP. For us, we pay 10% royalty on the gross MRP on every title across all our languages. When translations are involved, we pay 5-7.5% royalty. Then, you have the print, paper, binding (PPB) cost, the cost of producing the copies of a title. Depending upon the print run, quality of the paper used, paperback or hardbound, this cost varies. After that come your overheads and the profit margins.

In our case, we build multiple imprints for each language focusing on a specific subject. In Tamil, we have an imprint for general books covering literature, biographies, self-improvement, business and finance, politics and current affairs. Once the imprint is decided, then the titles that fit into that imprint are worked out, and then we start identifying potential authors who can write on those subjects. Most of our non-fiction books (more than 80%) are commissioned. We work with the authors and give them the outline, including the rough page count and the level of vocabulary.

Once we get the manuscripts, we edit them and incorporate them into our publishing program. The sales team picks up from the production and builds sales volumes by promotion across various outlets. A title that sells more than 3000 copies per year, starts generating decent profits.