Thursday, July 31, 2008
Choosing A Publisher
The series based on content from my how-to reference book on self-publishing, The IndieAuthor Guide, herewith continues. I can't just copy and paste everything from the manuscript, because the thing is 300pp long and heavily illustrated besides. But I will present topics from the book to the extent of detail possible in a blog post. Note that I'm not covering editing, designing your own book cover, creating your brand or publishing to the Kindle here, since those topics are already presented on my website in the form of free pdf guides. I’ll include links to previous posts in the series here in the Bottom Line It section. So far, I've posted topics on Publishing Options, Rights, Royalties and Advances, and What's the Deal With ISBNs And Bookstores? Today's post is about choosing a publisher.
Go On An' Run Yo Mouth, I Ain't Got Nuthin' But Time Version (Can't Promise It Won't Go On Forever):
Choosing A Publisher
Your choice of publisher depends on your goals as an indie author and the resources you’re prepared to expend in the endeavor—not just money, but time and skills as well. As with so many things, the best way to find a good publisher is on the basis of a recommendation from a trusted third party. If you know any self-published authors, get their input. If you don’t know any self-published authors, or the ones you know recommend against the publishers they used, do an internet search on “self publish” or “POD” to find publishers and what people are saying about them. Narrow the field to just two or three candidates, then review each one’s Terms of Service (sometimes called a Membership Agreement), submission guidelines and FAQ sections to determine which will be the easiest for you to work with, according to your specific needs and priorities.
For example, if you intend to minimize costs by doing as much as possible by yourself, it doesn’t make sense to go with a publisher whose most basic package charges upfront fees for providing services you don’t need. On the other hand, if you know you’ll need to pay for certain professional services, such as editing or book cover design, it doesn’t make sense to go with a publisher that doesn’t offer those services. With respect to related services however, such as cover design, editing and layout, don’t think that the only way to get a quality result in the published book is to pay for professional services. The IndieAuthor Guide can take you through the entire process in easy to follow, step-by-step instructions that assume you are an ordinary person, not a professional editor, artist, publicist or anything else related to publishing. Much of the Guide’s content will be covered in this series, and some of it is available for online viewing or download at my website. If you’ve got decent computer skills and a do-it-yourselfer spirit, you can probably accomplish most or all of the tasks involved in bringing your book to print by yourself.
Crunch The Numbers To Forecast Profit Possibilities
If you’re hoping to make a profit selling your books, crunch the numbers for various publishers. Compare the setup costs, production costs and publisher fees for production of the same book, and don’t forget to include the cost for an ISBN where the publisher doesn’t provide one. Production costs for POD books are usually based on the size and format of the book, plus the page count. In order to determine your break-even point—how many copies you must sell in order to earn back your up-front investment—, you will need to do some ‘what-if’ calculations based on different possible list prices for your book.
Look at the list prices of current, mainstream books in the same genre, format, and rough page count as yours, making note of the lowest, highest, and most common prices you find. Working with the most common list price for a book like yours, use the following calculation to see what you will earn per book for sales through booksellers and through each publisher’s online store (if applicable):
[List Price] – [Per-Copy Production Cost] – [Bookseller Fee]
The standard bookseller fee is 40% of the book’s list price, but it may be significantly less for books sold through your publisher’s own online bookstore. Let’s look at some examples based on a 6x9, perfect-bound trade paperback with 320pp. Publisher A charges a base production cost of $1.50 per book plus $.02 per page, making the total production cost per book $1.50 + (.02 x 320), or $7.90. Publisher B charges a flat production cost of $10.53 per copy. Working with a list price of $14, which is currently common for a comparable mainstream book, the standard bookseller fee is $14 x .40, or $5.60. Here’s your profit per copy sold for each publisher:
A: $14 - $7.90 – $5.60 -= $.50
B: $14 - $10.53 - $5.60 = -$2.13
As you can see, you can’t break even with Publisher B unless you raise the list price of your book. In fact, you’d need to set the list price at a little over $17.50 just to cover production costs, and at $18.50 to earn the same $.50 per copy profit you’ll get with Publisher A. But suppose Publisher B offers an upgrade plan which will reduce your per-copy production costs to $6.53 in exchange for a one-time, flat $50 fee, and publisher A’s upgrade program will reduce per-copy costs to $.85 per book + $.01 per page ($4.05 per book, total) for a flat $100 fee:
A: $14 - $4.05 - $5.60 = $4.35
B: $14 - $6.53 - $5.60 = $1.87
At first glance it appears you’ll need to sell about 23 copies of your Publisher A book and 40 copies of your Publisher B book to earn back each publisher’s respective upgrade fee, but take author copies into account as well. Most publishers sell copies of POD books to the books’ authors at production cost. If you were intending to buy 25 author copies for family, friends, and to send to reviewers, before the upgrade you would’ve paid Publisher A $7.90 per copy, or $197.50 total, and Publisher B $10.53 per copy, or $263.25 total. After the upgrade, you’d pay Publisher A $4.05 per copy, or $101.25 total, and Publisher B $6.53 per copy, or $163.25 total. With Publisher A’s upgrade, you’d save $96.25 on author copies and with Publisher B’s upgrade you’d save $100 on author copies. In both cases the savings on author copies alone are enough to justify the upgrade expense, but with Publisher A, your ongoing royalties will be more than twice as much as you’d get with Publisher B. But wait, there are still more factors to consider.
Let’s say Publisher B will charge you an extra $85 for ISBN assignment, but Publisher A will throw in an ISBN for free. Now think about how you intend to make your book available to buyers online: primarily through big retailers like Amazon™ and Barnes & Noble™, or via direct links from your website or blog to your publisher’s online store? Assume Publisher A only takes a 15% bookseller fee for copies sold through its online store, but charges a flat fee of $65 per listing plus $.50 per copy sold for Amazon™ and Barnes & Noble™ online listings. Assume Publisher B takes a 25% bookseller fee in its online store, but will automatically get your book listed on Amazon™ and/or Barnes & Noble™ online at no additional cost. Personally, I feel that an Amazon™ store listing is critical if you hope to turn a profit on your self-published books, not only due to Amazon™’s huge market share but also due to the greater promotional opportunities available for products listed on Amazon™ (to be covered later in this series). If an Amazon™ listing is important to you, verify that the publishers you’re considering can get one and the cost isn’t prohibitive. As you can see, it’s very important to take every possible fee and factor into account when doing your calculations.
Look at the tradeoffs for each publisher, but always keep production costs and eventual list price in mind. One publisher may offer excellent tech support and customer service through the setup and publication process, but with steep production costs. In contrast, a different publisher may offer tech support and customer service via email only, but charge much lower fees. Remember that the eventual buyers of your book won’t care how easy or hard your publisher was to work with, they only care about the physical quality of the book, the quality of the writing, and the price. In the final analysis it won’t matter how great the publisher’s customer service or tech support are: if your book is priced significantly higher than a typical mainstream book of the same type and dimensions, it will be hard to sell.
However, while it’s often worthwhile to accept a certain amount of inconvenience in exchange for much lower production costs, it is never worthwhile to accept poor production quality, no matter how low the production costs. Your eventual buyers not only expect to pay about the same price for your book as they would for a comparable mainstream book, they expect to receive a book of comparable quality. Cheap paper, spotty quality control and pages that spill from a poorly-glued binding won’t cut it. You can’t be absolutely sure of the publisher’s quality of workmanship until you can inspect a proof copy of your book, but some industrious Googling on [publisher’s name] + “quality” should turn up some helpful insights from other self-published authors.
Finally, note that for some books, it’s not truly feasible to self-publish via POD for a profit. Recall that in publishing, as the number of books in a print run goes up, the production cost per copy goes down. If your intended book must have an unusual binding, full-color pages, specialty paper or any other attributes that will drive its per-copy production cost up to the point that you’d have to price it 2 – 3 times as high as a comparable mainstream book, self-publishing via POD is not likely to work for you. In that case you may want to consider a subsidy or vanity publisher, which is a publishing path outside the scope of The IndieAuthor Guide and this series.
If You’re Publishing To Attract Attention, Not For Profit
Rights will be a primary concern if your goal is to attract a mainstream publisher. You won’t be able to negotiate with any other publishers if you’ve already locked up publishing rights with a subsidy or vanity publisher. But since subsidy and vanity publishing don’t offer any advantages over POD publishing where typical books are concerned, there’s no reason for an indie author to sign away his publication rights in the first place. See the prior entry in this series on Publishing Options for more details about the different types of publishers.
Coming Up Next Time: Getting Organized
Friday, July 25, 2008
What's the Deal With ISBNs And Bookstores?
I've been fielding a lot of email questions about the nuts-and-bolts aspects of self-publishing lately. Rather than answering the same questions over and over again in private messages which don't benefit the self-publishing community at large, I've decided to blog a series based on content from my how-to reference book on self-publishing, The IndieAuthor Guide. I can't just copy and paste everything from the manuscript, because the thing is 300pp long and heavily illustrated besides. But I will present topics from the book to the extent of detail possible in a blog post. Note that I'm not covering editing, designing your own book cover, creating your brand or publishing to the Kindle here, since those topics are already presented on my website in the form of free pdf guides.
I’ll include links to previous posts in the series here in the Bottom Line It section. So far, I've posted topics on Publishing Options and Rights, Royalties and Advances. Today's post is about ISBNs and brick-and-mortar bookstores.
Go On An Run Yo Mouth, I Ain’t Got Nuthin’ But Time Version (Can’t Promise It Won’t Go On Forever):
What’s the Deal With ISBNs?
Any commercially-sold, physical book must have a unique International Standard Book Number, or ISBN, assigned, and each different edition of a given book (i.e., hardcover, paperback, audiobook) must have its own ISBN. EBooks, which are essentially digital files, don’t require ISBNs. The ISBN is a unique identifier assigned to all commercially-sold books being sold in any physical format, consisting of a 10- to 13-digit number and associated barcode. Bowker is the only agency allowed to distribute ISBNs in the U.S. Bowker sells ISBNs to publishers and authors in blocks of ten at the minimum. It’s not unusual for self-published authors to purchase their own ISBN blocks, though unless you’re very prolific or issue your books in multiple editions, you may not ever use up a whole block of ten.
Some publishers require authors to obtain their own ISBNs at their own expense, some will provide ISBNs to authors for a separate fee, and still others include ISBN assignment as part of their standard publishing package. If you buy your own block of ISBNs, each ISBN in the block can only be used once, and only for a specific edition of your book. For example, let’s say you use the first ISBN in your block for a paperback edition of Novel A, the second for a hardcover edition of Novel A, and the third for an audiobook edition of Novel A. A couple of years later, when you’re ready to publish Novel B, you must assign ISBNs to all its editions beginning with the fourth ISBN in your block. Once assigned, an ISBN can never be re-used, not even if the book to which it was assigned goes out of print. In Europe, books are tracked with a European Article Number, or EAN. Some publishers can assign an EAN to your book, but check with your publisher to be sure that service is available if you intend to sell your book in Europe, or through online vendors that accept international orders.
This is all I have to say about ISBNs in The IndieAuthor Guide, but a much more thorough treatment of the topic can be found in a series written by Walt Shiel in his View From the Publishing Trenches blog. The first entry in the series can be found here, and from there you can follow links to the second and third installments. Note that Mr. Shiel and many others in the publishing industry warn authors against accepting the free ISBNs offered by publishers like CreateSpace and BookSurge, for reasons best summed up by this quote from Mr. Shiel:
Suppose you publish your book through Amazon’s CreateSpace or BookSurge service and allow them to assign it an ISBN. Two years later, you decide you prefer to print your book with another printer or even a different subsidy publisher. Your book MUST be assigned a new ISBN, since the original one was owned by the original publisher (CreateSpace or BookSurge). And that original ISBN can never be reassigned to a different book, even if the publisher declares their edition of your book as out-of-print. From that point forward, your book will have two ISBNs associate with it. If a bookseller or library tries to order it, they will have to guess which one is the current one. You will have to rely on some (possibly clueless) clerk to make that guess. They may just pick the first one they stumble on. If that one turns up as OP (out-of-print) or otherwise unavailable, that’s what they’ll tell the customer.
As you'll see in the upcoming discussion about book stores, I believe this is a non-issue for the vast majority of self-published authors because very few, if any, libraries or brick-and-mortar bookstores are likely to be looking for your book in the first place. Mr. Shiel goes on to say:
And those two version of your book will continue to show up on Amazon with different publishers, possibly different prices, etc. An Amazon search on your title may not turn up the current version near the top of the results (or, possibly, at all).
Also a non-issue in my opinion, because the older version of your book will list as either out of print or only available from resellers, and most of your buyers won't find your book while casually browsing the Amazon site anyway. Most will find it via a direct link from your website or online posting, from the 'customers who ordered this book also ordered' section of an Amazon or B&N product page, or other promotion that leads them directly to your product page. Moreover, there's not really any reason I can think of why you would elect to switch publishers on a POD book that's already published and on sale, with you just kicking back and collecting royalties. You already did all your comparison shopping before you chose your POD publisher, already went through the publishing process, and in the case of a revised edition, a new ISBN must be assigned anyway. Even if a new POD outfit opens up tomorrow and offers better terms, they'd have to be a whole lot better to make it worth your while to re-publish the same book in the same edition all over again.
What About Book Stores?
You may be wondering how you can sell significant quantities of your books when it’s very difficult to get brick-and-mortar stores to stock them. The answer is, you don’t necessarily need brick and mortar bookstores to stock them. I covered many of the reasons why in this previous post, Big Chain Bookstore Death Watch. While some very outgoing and industrious authors can significantly increase their sales and visibility by cultivating relationships with brick-and-mortar stores and doing in-store events and readings, getting a brick-and-mortar store to stock your book does not automatically guarantee any increase in sales. Getting your book stocked can seem a daunting task in and of itself, but accomplishing that task will do you little good if you aren’t also prepared to focus considerable time and effort on raising public awareness of your book in the communities where it’s being carried by one or more brick-and-mortar stores.
At the minimum you should be prepared to lobby hard for in-store reading and signing events, but don’t stop there. You will also want to publicize the events in any way you can, contact local newspapers to try and get a timely interview or book review in advance of the events, and get in touch with local book clubs and writers groups to drum up interest as well. I go into much more detail on promotional activities in The IndieAuthor Guide, and will be providing much of that information later on in this series, but in my opinion a brick-and-mortar store campaign isn’t the best strategy for a POD book that’s already being sold through a major online outlet (i.e., Amazon, B&N online store) anyway. There’s the time and effort to consider, but an even bigger issue is up-front expense.
You must provide copies of your books to brick-and-mortar stores willing to stock them, and must also have substantial quantities on hand to sell at in-store events. Assuming your cost for author copies of a book retailing at $14 is just $6, if you have a very successful event and sell a copy of your book to all 50 attendees, your gross earnings are $700. Sounds good for a couple of hours’ work, but you haven’t accounted for expenses yet. Begin by subtracting the $300 plus maybe another $25 in shipping costs you paid up front to buy the 50 books and have them shipped to you. Next comes the bookseller’s ‘cut’, for which 40% of the book’s list price is standard, so subtract an additional $280 for this. Now take into account the cost of travel to and from the store (gas, at the minimum), expenses for any printed materials you provide (business cards, post cards, bookmarks, etc.), and expenses for any drinks or snacks along the way. Let’s say you manage to keep all those costs down to just $50. Your net profit for the evening is only $45, or 90 cents per book sold. And that’s the result of a completely successful event; imagine how much more disappointing the figures are if you sell fewer books.
Now look at the numbers for copies of your books stocked on a brick-and-mortar store shelf. No brick-and-mortar bookseller is likely to stock more than two or three copies of your book at a time. Let’s assume three copies are stocked and all three sell. Even if we disregard shipping, gas and other minor expenses related to getting the books into the store and getting your royalty payment from the store, your profit is only $7.20. It’s an awful lot of hassle and up-front expense for less than ten dollars at the back end.
While it’s true that in most cases, Amazon or any other online bookseller will take the same 40% as a brick-and-mortar store, the advantage of working with an online seller is that you don’t usually have to order, pay for, or deliver any books up front. Most online sellers can list your book on their sites, and when a customer orders your book, send an electronic order to the publisher. The book is printed and sent directly to the customer with no involvement from you whatsoever. The online seller gets its 40%, thereby reducing the amount of royalty paid to you, but you haven’t incurred any expense or hassle in the process. Once your POD book goes on sale, all you're doing is promoting it and collecting royalty payments. Bear in mind, I’m only talking about individual authors selling their own books here. The situation is very different for people who own and operate their own online bookstores, whether completely independently or as a ‘partner’ or ‘affiliate’ of a major online retailer. The fee structures for that type of arrangement are variable, and outside the scope of this discussion.
Coming up next time: ---REVISED--- How To Choose A Publisher
Tuesday, July 22, 2008
What Passes For PG-13
Writers are pretty much known for expressing themselves in writing, and I've definitely got something to express about The Dark Knight. I'm interrupting the series on self-publishing to get up on my soapbox for this one post, but don't worry. The series on self-publishing will resume next week. Feel free to skip this one if you'd like.
Go On An' Run Yo Mouth, I Ain't Got Nuthin' But Time Version (Can't Promise It Won't Go On Forever):
I just came from seeing The Dark Knight. Oh it’s dark, all right. It’s edgy, it’s complex, and for the last half hour or so, it’s apocalyptic. The Dark Knight is a brilliant, adult exploration of threadbare ethics where heroism and vigilantism overlap. And it should’ve been rated R.
Despite the many, many murders in the film, there are no blood spurts, no decapitations, no exposed entrails or breasts, and I guess that’s why the MPAA granted it a PG-13. In terms of body count it’s really no worse than any of the Pirates of the Caribbean movies, and the violence is considerably less graphic than what I’ve seen in The Mummy and the Lord of the Rings movies, all of which are rated PG-13. I didn’t have a problem allowing my twelve year old son to see all of those other films, but The Dark Knight is where I draw the line.
Director Christopher Nolan and his brother/screenwriting collaborator Jonathan Nolan have taken the Batman franchise in a grittier, more realistic direction. Their Batman is no infallible paragon of courage, strength and chivalry. He is, first and foremost, a man: a man with human failings. Their Gotham is not a place peopled by clearly delineated good guys and bad guys, a place where honest people have a reasonable expectation of safety. The Nolans’ Gotham is a dingy, impersonal, corrupt and dangerous metropolis in which bank managers are in league with mobsters and ordinary citizens will seriously consider blowing each other up if it means saving their own lives. In previous incarnations of the franchise, villains were cackling megalomaniacs whose ambitions generally fell into the rule-the-world category. The Jokers, Penguins, Mr. Freezes and Catwomen of yesteryear came equipped with catchphrases, Rube Goldberg schemes and ridiculous, over-the-top costumes. The Nolans’ villains have more in common with Charlie Manson and the BTK Killer than they do with any of those flamboyant, ultimately harmless criminal fops of the past.
All of these changes breathe new life into the characters and story, making them much richer and more provocative to an adult audience—while simultaneously making the franchise less appropriate for children and young teens. As adults, we know the world is not a black-and-white place of good and evil, and that bad things—sometimes, even horrific things—happen to good people all the time. We know that puppies and kittens aren’t always saved from burning buildings and children aren’t automatically granted asylum from violence. But kids need to feel safe in order to grow up with a sense of security and confidence, and for a while at least, they need to believe in absolutes in order to feel safe. I don’t advocate shielding children from the ills of the world and the people in it indefinitely, but I do think there’s a great deal of value in parsing out information and exposure in age-appropriate chunks.
My kids are growing up in a world far different than the one of my own childhood, no doubt. Even so, between school, responsibilities to family and friends, a growing awareness of world events (both good and bad), and navigating the rocky social terrain between fifth and tenth grade, I think they have quite enough on their plates. I’m not sure they really need to entertain concerns that their school bus may be hijacked by a murderous psychopath, the ferry could be impregnated with bombs, the hospital might go up like a fireball at any moment, the neighborhood cop they’ve come to know and trust could secretly be working for the wrong side, or that they might be kidnapped and murdered for the sake of payback against their parents.
The thing about the Pirates of the Caribbean movies, the Lord of the Rings movies, The Mummy movies, and even the former incarnations of Batman TV shows and movies is that they are all firmly rooted in the land of fantasy. Assuming they’re beyond the age of belief in Tooth Fairies and Boogeymen, children who see those films know they have nothing to fear from Davey Jones, orcs or reincarnated skeletons so long as they stay away from the Caribbean of the 1800’s, Middle Earth, and Egypt circa 1920. No such subconscious buffer zones or safety nets exist where The Dark Knight is concerned, because The Dark Knight does a very good job of inserting Batman and all his adversaries into the real world…our world.
In the final analysis, I’d have to say that as a rule of thumb, I believe any movie in which an adult holds a gun to the head of a small, terrified child with every intention of pulling the trigger is not a movie I’d like my 13-year-old child to see.
Monday, July 14, 2008
Indie Authors And Rights, Royalties And Advances
I've been fielding a lot of email questions about the nuts-and-bolts aspects of self-publishing lately. Rather than answering the same questions over and over again in private messages which don't benefit the self-publishing community at large, I've decided to blog a series based on content from my how-to reference book on self-publishing, The IndieAuthor Guide. I can't just copy and paste everything from the manuscript, because the thing is 300pp long and heavily illustrated besides. But I will present topics from the book to the extent of detail possible in a blog post. Note that I'm not covering editing, designing your own book cover, creating your brand or publishing to the Kindle here, since those topics are already presented on my website in the form of free pdf guides. I’ll include links to previous posts in the series here in the Bottom Line It section.
Last week’s post was about Publishing Options. This week I’m covering Rights, Royalties and Advances.
Go On An Run Yo Mouth, I Ain’t Got Nuthin’ But Time Version (Can’t Promise It Won’t Go On Forever):
Rights, Royalties And Advances
In a traditional publishing scenario, an author grants a publisher the right to package, publish, promote and distribute his content for commercial sale for a set time period, in exchange for a percentage of the profit from those sales. The details of the exchange are laid out in a contract, which is negotiable and therefore unique for each manuscript sold.
Publication rights are many and varied, covering all the different ways the manuscript’s content can be published for distribution to the public. Rights to publication of the entire manuscript in different formats include hardcover, softcover, trade paperback, mass market paperback, audiobook on CD or tape, audiobook digital download, and eBooks in various formats. Rights to portions of the manuscript include excerpts to be distributed for promotional purposes at no cost to consumers, reprints of entire chapters to be sold as standalone articles or short stories, reprints of art or text from the manuscript for reproduction and sale in a different product format (i.e., calendars), and reprints of excerpts to be included in subsequently published anthologies.
Other content rights include screenplay rights, broadcast rights and licensing rights. Licensing rights govern the terms under which manuscript text, artwork or character likenesses can be printed on t-shirts, mugs, or other merchandise offered for sale. Broadcast rights pertain to the terms under which the manuscript (or portions thereof) may be broadcast over television, satellite or radio waves, and usually pertain to broadcast of audiobook editions or live readings. Screenplay rights cover situations where someone wants to make a film or television show based on content from the manuscript.
Mainstream publishing contracts grant the publisher any or all of the above rights for a certain number of years. Megaconglomerate publishers may negotiate for publication, broadcast, licensing and screenplay rights simultaneously, offering a flat-fee payment or profit-sharing terms for non-publication rights in addition to the royalties offered on book sales. Smaller publishers will typically sign on only for publication rights, leaving the author free to sell the remaining rights to other parties. In that case, the author’s agent or manager may attempt to sell the remaining rights on the author’s behalf.
The “percentage of the profit from those sales” to be paid in exchange for rights is called the ‘author royalty’. Among mainstream publishers, author royalties are somewhat standard according to the type of book and publication format, but are open to negotiation before the contract is signed. Bestselling and prestige authors can demand higher royalties than other authors, and usually get them. For everyone else, royalties are usually figured either as a percentage of the book’s list price, or as a percentage of the net profit from the book. Consider a manuscript to be published as a trade paperback book with a list price of US$14. Typical royalties offered on ordinary trade paperbacks are 8-10% of the list price, or alternatively, 15-25% of ‘net’ from each sale. The list price is the suggested retail price. 8% of $14 is only $1.12 and 10% is just $1.40, which makes the 15-25% of ‘net’ option look a whole lot more attractive at first blush, but this isn’t necessarily so.
Net is calculated as list price - production costs - bookseller fee. Production costs for a typical black and white trade paperback book of average length run anywhere from $2 to $4 per copy, depending on the quantity of books in the print run (as quantity goes up, cost per copy goes down), paper and binding quality. Let’s say our book’s production cost is at the low end, $2 per copy. The standard bookseller fee is 40% of the list price, meaning that every time you buy a book in a store, whether in person or online, the seller keeps 40% of the list price as his fee. On our $14 book the bookseller fee is $5.60. This leaves a net of $14 - $2 - $5.60, or $6.40. 15% of $6.40 = 96¢, and 25% of $6.40 = $1.60. As you can see, royalties calculated from net can vary widely based on the size of the print run, due to the variance in production costs.
Royalty percentages for hardcover, mass-market paperback, eBook and audiobook formats are calculated in a similar way, though standard percentages vary for each different format. Also, it’s typical to reward the author with a higher royalty percentage on additional print runs after the first run sells out, but bestselling authors are usually the only ones in a position to collect that reward. Any way you slice it, less than $2 per copy sold is not a lot of money. At $2 per copy you’d need to sell 15,000 copies to earn $30,000, and that’s before taxes and fees for professional services (see Paying the Piper(s), below).
The contract may require the publisher to pay the author an “advance”, or up-front, lump-sum payment. The advance is not a free-and-clear payment, such as a professional athlete’s signing bonus, however. It’s actually a loan against future royalties. When an advance is paid, the publisher enters it into the author’s royalty account as a negative amount, indicating the author owes the publisher that much money. The publisher keeps track of sales, calculates the author’s royalty on each sale and deposits the funds into the author’s royalty account. No royalties are paid to the author until the advance loan is paid off.
Since it takes time for earnings to cancel out the advance, it’s not unusual for authors to wait many months after their book is published to see that first royalty check. In many, if not the majority of cases where debut books are concerned, the book doesn’t ultimately sell enough copies to pay back the advance. The publisher won’t make the author pay back the difference out of his own pocket, but the publisher will not want to publish the author again, either. The larger the advance, the bigger the author’s risk of committing career suicide.
Paying the Piper(s)
If the author has contracted with a manager, agent or attorney for services, each of them will take a percentage of the author’s advance, flat fees, profit-sharing proceeds and royalties. It’s easy to see why so few authors actually make a living on their writing, regardless of who published their books.
Indie authors don’t truly earn ‘royalties’, they earn net profit. However, self-publishing companies tend to refer to the author’s net profit on each book sold as a “royalty” in order to mimic the terminology of the mainstream. Indie net profits are calculated according to list price, production costs and bookseller fees, just like mainstream author royalties.
The Production Cost Problem
Production costs for indie books are usually two to three times higher than mainstream books due to economies of scale. Recall that production costs go down as quantity of books printed goes up. Big publishers order print runs in the tens of thousands. Vanity and subsidy publishers order print runs in the hundreds, or occasionally, the low thousands. POD publishers order one book at a time. This problem can be a major stumbling block for indie authors, since they may be forced to set their books’ list prices higher than comparable mainstream books to earn as much per book as a mainstream author. This situation also feeds the bias against self-published books since customers are being asked to pay more for untested, self-published books than they would for a bestseller.
The Production Cost Solution
Self-publishing companies realize the production cost problem alone can be enough to deter authors, so some now offer reduced production costs in exchange for flat fees, annual dues, or a combination of both. One example is CreateSpace™, the publisher I use for POD. Authors who opt for reduced production costs can set their books’ pricing equal to comparable mainstream books and still earn royalties three to five times higher than most mainstreamers.
Such fees range widely from publisher to publisher, so authors should do some ‘what if’ calculations for each publisher under consideration to figure out what their net profit will be at various list price points, both with and without the production cost discount, and how many books they must sell at each price point to cover the cost of the fee.
Another consideration is author copies; authors can buy copies of their self-published books for the cost of production alone, so reduced production cost means less money spent when ordering author copies. If the author intends to order 20 or more copies of his book to give to friends and family or sell personally, he may find the savings on author copies alone are enough to cover the fees. Authors who buy larger quantities of their books to sell at signings, appearances and through bookstores will almost certainly find the savings in author copies makes it worth paying for reduced production costs.
Coming Up Next Time: What’s The Deal With ISBNs?
Wednesday, July 9, 2008
Enough With The Editorializing, Tell Me How To Publish & Sell My Book Already!
I've been fielding a lot of email questions about the nuts-and-bolts aspects of self-publishing lately. I have written a whole book on the subject, The IndieAuthor Guide, but it would be pretty obnoxious of me to answer each query by saying, "Buy my book and flip to page such-and-such," so I do my best to provide answers when I have them. Still, rather than answering the same questions over and over again in private messages which don't benefit the self-publishing community at large, I've decided to blog a series based on content from my book. I can't just copy and paste everything from the manuscript, because the thing is 300pp long and heavily illustrated besides. But I will present topics from the book to the extent of detail possible in a blog post. Note that I'm not covering editing, designing your own book cover, creating your brand or publishing to the Kindle here, since those topics are already presented on my website in the form of free pdf guides. First up in the series: Publishing Options.
Go On An Run Yo Mouth, I Ain't Got Nuthin' But Time Version (Can't Promise It Won't Go On Forever):
Vanity, Subsidy, POD, Oh My!
The terms “self-publishing”, “subsidy publishing”, “vanity publishing” and “print-on-demand” are often used interchangeably when people speak of self-publishing, but these terms aren’t synonymous. Rather, they describe different self-publishing options or processes.
In common usage, “self-publishing” has become a catch-all term. People using it may be talking about subsidy publishing, vanity publishing or print-on-demand (POD), but ironically, they’re rarely talking about true self-publishing. In the strictest sense, self-publishing is exactly what it sounds like: doing your own publishing. This is also known as “desktop publishing,” since it’s generally done with an ordinary computer, or ‘desktop’ computer. Typical self-publishing projects include club or family newsletters, brochures, booklets and research papers, any of which can be created using a standard word processor. There are also dedicated desktop publishing computer programs that enable the user to create more sophisticated and lengthier publications.
Either way, desktop publishing isn’t a workable solution for book manuscripts because binding options are severely limited. Office supply stores and print shops offer several types of binding, and can generally bind up to 300 pages. However, all their binding options are more fitting for reports or business documents than books. The pages may be hole-punched and placed between two report covers, or drilled for comb- or spiral-binding. The finished product will have a binding, but even if you customize the report covers with artwork and a book title, it won’t look like a book. You won’t be able to duplicate the look of a “real” book, which has pages glued or sewn into a wrap-around cover at the spine. Furthermore, having manuscripts bound individually is very expensive.Vanity Publishing
Vanity publishing is the process whereby an author pays a publishing service to format and publish a minimum number of copies of his book. The publisher usually offers related services on a fee basis, from editing to cover art design and even promotion. The author is essentially paying to have his book printed, and so long as he’s willing to pay the required fee, the publisher will not turn him away. It is because of this fact that as a group, books from vanity publishers are presumed to be of poor quality.
This bias is the primary downside to vanity publishing, but expense comes in at a close second. An author who chooses to go with a vanity publisher must pay all production costs for a minimum ‘print run’ of his book, generally at least 200 copies. Cost per book goes down as quantity goes up, but in most cases the author can expect to pay anywhere from US$5 - $10 per copy for a trade paperback edition and between US$8 - $16 for a hardcover. Multiply those figures by 200, then add hundreds more dollars in flat fees for project setup, optional ISBN assignment, proof corrections, project management and delivery. Add another thousand or two if the author pays for related services.
The third downside to vanity publishing is distribution, or lack thereof. When the print run is finished, all the books are delivered to the author and it’s up to him to store them, sell them, give them away, or otherwise dispose of them. With few exceptions, brick-and-mortar bookstores won’t stock any type of self-published book. They’re particularly leery of books from vanity publishers, all of whose names are widely known in the publishing and bookselling industries.
More recently, vanity publishers have begun addressing the distribution problem by setting up online bookstores to stock their clients’ work, but the sites don’t get much traffic because they only stock the vanity publisher’s books, and again, most people assume those books aren’t very good. Enterprising authors can turn a profit selling their books themselves, on their own website, at community fairs, through direct mail and so on. Occasionally one will even do well enough to attract the attention of a mainstream publisher, but this is very rare.
Lastly, even though vanity publishers are only providing services for a fee, they act like conventional publishers when it comes to contracts and rights. As part of the publishing arrangement, the author will be required to sign a contract granting certain, exclusive rights to the publisher. The contract may stipulate that the author cannot publish the same work in the same format, or any other format, for a set period of years. In this way, the publisher ensures the author must go back to the same publisher to order additional print runs if the book is successful enough to sell out its first print run. The contract will also specify whether or not the author can buy his way out of the contract before the term is up, and if so, what it will cost. This stipulation lines the vanity publisher’s pockets in the event a mainstream publisher wants to publish the book.
Subsidy publishing is virtually identical to vanity publishing, except that subsidy publishers will not publish every manuscript submitted to them. Instead, they accept submissions (sometimes for a fee) and choose the manuscripts they wish to publish. Subsidy publishers sprang up as a legitimate self-publication alternative to vanity publishing. Subsidy publishers aren’t all created equal, however. Some are hardly more discerning than vanity publishers, while others are so selective as to rival mainstream publishers.
The worst subsidy publishers are ripoff artists par excellence, assuring every prospective client her manuscript is a diamond in the rough that is practically guaranteed to become a bestseller if she will only pay for professional editing, artwork, promotion, and other services—all of which just happen to be offered by the publisher or a company referred from the publisher. The best subsidy publishers truly strive to distinguish themselves by putting out quality books and dealing fairly with authors, but even in that case the author must contend with all the same downsides as she would face with a vanity publisher. She must pay for a minimum print run and related services, she must sign over at least some of her publication rights in a contract, and she faces all the same distribution challenges as a vanity-published author.
Print On Demand
While vanity or subsidy publishing is fine for a book with a built-in customer base, such as a textbook published by a college professor for use in his class, Print On Demand (POD) is the best way to go for an author who intends to sell her book to the general public. As with vanity publishing, an author who chooses POD is essentially paying for printing services. There is no selection process on the part of the publisher. Also as with vanity and subsidy publishers, POD companies may offer related services for a fee, and the published books aren’t likely to be carried by brick-and-mortar stores. That’s where the similarities end, however.
There is no minimum print run to order and pay for with POD because the publisher stores POD books in digital format. Individual copies of the book are printed and bound by automated systems “on demand”, meaning each time an order for the book is received. The author doesn’t pay to have on-demand copies produced. Instead, the printer keeps a share of the book’s price to cover its production costs and pays the remainder to the author as a royalty.
POD publishers may offer services related to publishing for a fee, but they are also prepared to accept print-ready files from authors. This is where the author can save thousands of dollars, by doing as many of those related tasks as he can for himself instead of paying for services. Some POD publishers don’t even charge set-up fees. In that case, the only expense that must be shouldered by the author is the cost of proof copies, which must be printed in order for the author to review the book before approving it for publication.
With a POD publisher, the author retains all rights to his work. If there’s any contract at all, its terms are limited to the details of fees, royalty payment, services provided and the responsibilities of each party. If your publisher requires you to order a minimum print run or sign over any of your publication rights, it’s a subsidy or vanity publisher. Most POD publishers have distribution relationships with major, online booksellers such as Amazon and Barnes and Noble, through which the bookseller agrees to sell the POD publisher’s books on its website. Some POD publishers only offer this as an optional service, and only for a fee. Another service some POD publishers offer, always for a fee, is ‘guaranteed returns’, whereby brick-and-mortar stores are allowed to return any unsold copies of POD books to the publisher. This is supposed to encourage brick-and-mortar stores to carry POD books, since many cite ‘un-returnability’ as a reason not to carry them, but in reality the centralized purchasing departments and computerized inventory systems of chain bookstores present obstacles at least equal to concerns about money lost on unsold copies. My previous blog post, Big Chain Bookstore Death Watch, provides rationale enough not to invest too heavily in courting big chain bookstores.
All POD publishers can print paperback books in various, standard sizes, both in black and white and full color, but only some of them can print books in hardcover editions. When the hardcover option is available, the production cost for it is much higher than that charged for paperbacks. Since an author who goes the POD route can still opt to pay for certain related services as desired, vanity and subsidy publishers have no advantages to offer the typical indie author. Why pay stiff fees upfront, warehouse your books, and sign away your publication rights if you don’t have to? POD book production is also 'greener', in that no books are printed until they're bought and paid for by actual customers. There are no crates of returns going back to the publisher, no overstock being marked down or remaindered, no unsold copies headed for the dumpster.
Next Time: Rights, Royalties and Advances