Subject: Re: CDROM/book products
From: "Robert A. Bruce" <rab@pike.cdrom.com>
Date: Sat, 14 Nov 1998 13:34:36 -0800

Keith Bostic <bostic@abyssinian.sleepycat.com> said...
>My group is considering putting together an Open-Source CDROM/book
>product for the Berkeley DB software.  So, for some price you get
>a book with a CDROM tucked in the back.  Obviously, lots of other
>people have done this before, and I wanted to ask a few questions:
>
>1. Are we better off doing our own manufacturing and shipping,
>   or are there folks we could partner with, where we could
>   give them camera-ready copy and a CD master, and they would
>   create the CDROM/book, do the warehousing and the shipping
>   for a per-copy fee or percentage?

You should outsource both the publishing and the fullfilment,
but there is no reason to outsource both to the same company,
since they are very different businesses.

How many copies are you planning to print?  For very small volumes,
the best idea may be to use a 3-ring binder, and have Kinkos do it.
For larger runs, you will want to print the book with a standard
binding.  There are lots of printing companies that do this.  We use
a company called "Webcom" located in Toronto, 1-800-665-9322.  Most
of our print runs are large books (800+ pages) in quantities of
5,000 to 10,000.  For smaller books and/or smaller runs, it may
be better to use a local printer.

If you working out of Berkeley, you should check out KP Printing.
They have a big printing plant in Oakland, and I think they also
do fulfillment.  We have never used them for books, but they print
boxes and inserts for us.  I don't have a phone number or URL handy,
since I am at home right now, but they should be in the phone book.

We do our own fulfillment, but we ship 30-50,000 units a month,
spread across 120 titles.  I don't think it makes sense to do it
yourself for only one title.

>2. Does it make any difference if we continue to keep all the
>   additional documentation freely available, i.e., is the
>   marketplace we want to reach the people that want hardcopy
>   and stable media, or is it the people that want additional
>   documentation over the basic manual pages?

They want the hardcopy.  People don't like to read on-line, and they
don't like to print large documents.  You will not lose many customers
if you leave the documentation free.  In fact, you may gain customers if
the on-line documentation contains several conspicuous ads for the
book.  The bigger the document, the better this will work.

>3. How do people handle upgrades?  Open-Source products tend to
>   have more releases than other products.  If we're releasing,
>   say, twice a year, how do we handle the changeover?  Stop
>   shipping for a month while the new release comes out?  (That's
>   still a short period for converting, too.  Customers that got
>   the old release a month ago will be annoyed that it's already
>   out-of-date.)

You should set up a "subscription plan".  Your customers agree to
buy all the regular updates, for a discount off the listed price.
That way you turn one-time sales into a steady and predictable
revenue stream.

>4. Is there any information available (anecdotal is fine!) on
>   the "reasonable" range for CDROM/Book product pricing?

If you set the price too high, you can always cut it later, or offer
special discounts.  If you price it too low, you are stuck, since it
is much harder to increase prices than to cut them.

Ask a dozen people what they think is a "reasonable" price.  Then
take the highest price and increase it by 20%.  Most entrepreneurs
over estimate the number of people that will buy a product, but
underestimate the amount people will pay for it.

This year we pushed through in increase in the retail price of one
of our book/CDROM products from $49 to $69.  A lot of people complained
that we were "killing" the product, because no one would pay the higher
price.  But the result was a slight increase in unit sales above the trend
line we were expecting at the lower price.  This meant a 60% increase in
revenue, and, after subtracting out the cost of product, nearly a doubling
of our profit (since most books are sold through multi-levels of wholesalers
and distributors before they reach the bookstore, every bit of extra
margin counts for a lot).

	-bob