Indie Publishing Secrets revealed #22 Where's the Money?

Indie Publishing Secrets revealed   Where's the Money?

Typical scenario for a published book with a traditional publisher

Cost of you book in stores-Retail    $13.99

The bookstore pays 60%(typically) for your book. You pay your publisher and agent from that amount. $8.39

Your publisher takes 65% of that for advertising, distributing and printing. $5.45 (65%)

Your agent takes 15% for selling your book to the publisher-I'm not sure if that 15% is taken from the $8.39 or the $2.94. So, I've color coded them.

What's left for you?     $2.50 (30%) or $1.68 (20%)

You pay Uncle Sam about 1/3 of that    $1.13/1.67 (13%,20%) profit

If your experience with traditional publishing was different than this, I'd love to hear about it. Please comment.

Indie Publishing

Cost of your book in retail stores       $13.99

Bookstores pay 60% of retail for your book     that leaves $8.39
Your distributor takes 25% of that 60%           They earn $2.10.  That leaves $6.29

Subtract the cost to print your book                  $1.25(15%)-$3.50 (42%) for a 350 page book depending
                                                                        on how many you print.

What you get                                                    $3.04 (36%) to $4.79 (57%) if you do all free advertising
                                                                         Good luck with that

Uncle Sam takes about 1/3                               $2.12 (25%)-3.16 (38%)

POD (Print on Demand) Publisher I will use Createspace as the example

                                 Cost of your book         $13.99
                            
                                                                     You get $6.24 from sales at Createspace
                                                                                   $3.44 from sales on Amazon
                                                                                   $.64 from all other .coms
                                              Your book is not in stores

Ebooks

Smashwords takes about 19%. That is about $.18 per dollar your book sells for
If you let Smashwords distribute to Barnes and Noble, Diesel, Kobe and others, you end up with 60%. That means that if you sell your book for $2.99 you'll get $1.81.

Amazon.com (KDP)
If you price your book between $2 and $9.98, you will earn 65%
If you price your book less than $1.99 or over $9.99, you will earn 35%.

Happy earning

Indie Publishing Secrets Revealed #13 To Indie-Publish or Not?

Indie-publishing vs. Traditional Publishing

You must be wondering whether e-publishing is for you if you are reading this blog series.One important thing importance of staying on top of the industry. Start reading blogs and sites dedicated to this topic. I'll get you started today. I'm a part of an awesome writers' group called Author's Incognito. My good friend, Christine Bryant, posted an interesting email post from Dave Farland's Kick in the Pants. It was about the pros and cons of e-publishing compared to traditional publishing. I thought you'd like to read it. I sure enjoyed it.
A reader of the Daily Kick asked me recently to help him try to figure out whether it was better to self-publish a book as an e-book, or to go with a traditional publisher.


That’s a hard thing to do. Right now, taking a shot in traditional publishing is like trying to hit a moving target. In the past month alone, the nation’s third largest chain, Borders, has filed for bankruptcy and is now liquidating 400 of its stores. Many other bookstores are in trouble.


Meanwhile, book sales on a month-by-month basis for hardcovers in the US are showing about a 40% loss, on a month-to-month comparison to one year ago, and paperback sales are also tanking.


At the same time, Amazon.com, the world’s largest retailer, is showing about a 300% rise in sales of e-books on their site from last year.


Barnes and Noble, the second largest retail chain in the United States, is jumping onto the digital platform. In the past few months, they’ve reduced shelf space for books in their stores dramatically, increasing the space that is allotted to selling e-readers and accessories.


As a result of this, an author can anticipate that paperback sales now are about 50% of what they were last year.


In other words, paper books are rapidly dying. Many of the retailers who were selling them only a year ago are gone, and many of the survivors were selling paper books are now pushing electronic books instead.


So what should an author do?


Right now, if you publish a book in a paper format, it will take about two years for the book to be printed and released. What will the markets look like in two years?


I don’t know. I strongly suspect that in early 2012, we will see that more than half of all book sales are made electronically. By mid-2013, that number might rise to 70% of all sales. In a market like that, what can a publisher really offer you?


For most titles, they won’t be able to do much. Most bookstores will be going out of business. The paper venue will become a boutique business, for specialty stores. This isn’t a bad thing, but it does mean that the publishers will concentrate more on finding “big books.” They’ll cut back on midlist titles, and they’ll want more of the take.


The major thing that they demand is electronic rights. Most publishers now are offering 25% of “net” to their authors on electronic sales. Once they hit the author up for operating expenses, that means that the author will get less than 15% of the money spent on the sale of a book.


Now, don’t be fooled. Your agent will get a portion of that (about 15%, normally). And of course the electronic distributor will normally get a healthy chunk, too (at least 30% of the sales price).


Then you have to worry that your publisher is paying an honest royalty to you. (If you listen to authors, you’ll find that it appears that many publishers are not paying honest royalties.)
The result is that over the life of a novel, the author will get very little of the money paid for his product, if he goes with an agent and a traditional publisher. Let’s say that you write a book that makes $100,000 in sales over the next ten years. How much of that will you get as an author?


Well, the electronic distributor (Amazon.com/Barnes and Noble), under current rates, would get $30,000. Your publisher will take in the other $70,000, and would then pay you 25% of net. What’s the net? That’s hard to determine. The publisher might well charge you for the operating expenses of its company as a part of that net, or subtract money spent for advertising, or editing.


Let’s be generous on our determination of net, and say that you get 20% of the total received--$14,000. Your agent will then get an additional $2010. This would leave you with a little under $12,000 over the next ten years.


However, if you fire your agent and don’t hire a publisher, you would get all $70,000—less, of course, any publishing costs, such as a cover, editorial fees, perhaps a book designer. The cost of publishing a book can be kept under a thousand dollars pretty easily.


Of course, books online won’t have a 10-year shelf-life. You’ll keep making money on your book for more than a hundred years after you die. So if this book continues to sell for a hundred years, the numbers become astronomical.


Given all of this, the answer to the question is, “When does it make sense to publish with a conventional paper publisher?” The answer is, Never. Those days are gone. It would appear, right now, that the potential profit lines on a graph will diverge dramatically, and the longer you publish your book, the more you’ll regret going with a traditional publisher.


Unless, that is, you look at publishing as a career. It may be that a publisher will bring out your book, create buzz, give you a tremendous advance, launch your career beautifully, push your books so that they sell far better than they would have on their own, and turn you into the next J.K. Rowling. It does happen. Getting the notoriety and the marketing push from a big publisher can be a huge boost to a budding career, and it may be worth your time to seek out a major publisher.


You publisher typically offers editorial skills, marketing muscle, credibility—a lot of things that any author needs.


However, as an author who has been in this business or 25 years, I have to warn you about how it really works. Anyone who has been in this business for very long will tell you horror stories about how the conventional publishers messed up their editing, their cover quotes, their cover art, missed their ship date, under-ordered on print runs, refused to send the author on a signing tour, and so on. In other words, for every fairytale come true, authors can tell you about a hundred nightmares. For every author who makes a living in this business, dozens attempt it and fail.


In the final analysis, I’m not sure that this has to be an either/or situation. I believe that publishers will soon begin buying rights to books that breakout as e-books. When that happens, you might be able to enjoy the best of both worlds.


So maybe the question isn’t “Should I self-publish?” Maybe the question you should be asking is, “What’s the best way to self-publish in order to make sure that my book goes big?”


I’m going to talk about the way that makes the most sense to me in my next post—hopefully next week.


But for now, I have to get back to my real job—writing.


  I'd love your opinions on this.
Happy e-learning!