So, let's say an editor runs the P&L on your book and it turns out to be either marginally profitable or flat-out unprofitable. They could tweak the following parameters to flip the book from the red to the black:
Scenario #1: Offer a smaller advance. This is a possibility if the editor and agent haven't had a lot of back-and-forth on the issue, but if the advance is more or less confirmed or is already at the point that the agent won't go any lower, the adjustments won't be made here.
Scenario #2: Change the format. If the P&L is returning a loss with the paper/printing/binding, freight, and return rates of a hardcover book, the editor may rerun the analysis for trade paper and mass market editions to see if it might be profitable in those formats. True, the price point will be lower, but the publisher will likely expect to move significantly more units of a trade paperback or mass market edition compared to a hardcover. If so, then those lost dollars per book are more than compensated for by increased number of units sold, lower direct/operational costs, &c, and the book will become profitable.
Scenario #3: Raise the price. Increasing the price point can result in fewer copies sold, but if the impact on net units is offset by a dollar or two increase in unit price, an unprofitable book can suddenly become a money-maker.
Scenario #4: Go big. The editor may decide that the book is really, truly phenomenal, despite low initial net sales estimates. He or she may then acquire the book on a losing P&L with the intent of feeding enough marketing dollars into it to turn it into a bestseller. Once the book sales start to snowball, the initial loss is recouped and the book turns a profit. This last one is almost an exception to the rule, however, and we'll deal more with those in-depth tomorrow.
You tell me, though: based on what I've told you yesterday and today, what would you, as an editor, do to convert a financially unpromising book into a fiscal winner?