Missed Profits Following Conventional Wisdom
Conventional Wisdom (which is usually 95% wrong) says you should be happy with your ebooks and how they are selling.
The problem with that logic is that the biggest sellers aren't doing that.
The biggest sellers make more income from hardcopy sales than ebooks. Traditional publishers know this, even though they count on just a handful of authors to cover all their costs.
The self-publisher can create their own publishing empire if they do two things:
1) Create a deep backbench of books.
2) Get their book in front of as many eyeballs as possible.
The first is obvious. All the top-selling authors routinely bring out new titles and make sure their earlier titles continue to be available.
The second means book discovery, sure. It also means having your titles in all possible formats - ebook, paperback, hardback, audio, even video. Because no two readers read the same way. No two readers prefer the same format. Most prefer combinations of these formats. Amazon knows this, and they bought Audible (audiobooks) and CreateSpace (paperbacks) to take advantage of that exact fact.
My own research pointed this out over 6 months ago. I've published hundreds of books as tests (and gotten my financial freedom by doing this.) Of these roughly a quarter routinely sell as ebooks. I've got a much smaller set of these which have also been published as paperbacks (and even fewer as hardbacks.) When I crunched the numbers recently for 6 months worth of sales, it confirmed what I suspected:
- 12% of my books were producing 25% of my income.
- 92 of my ebooks were producing the income of 34 paperbacks.
Meaning for all the work I put into ebooks, that if I would take the ebooks which were selling and turn them into paperbacks, I could possibly triple my income.
Why are paperbacks more profitable than ebooks?
You have to understand the elephant-in-the-room explanation first.
The vast bulk of the press on self-publishing is devoted to becoming a successful ebook author. Let's face it, there are some good reasons for this:
- They are easier to produce.
- They are fast to get published after the writing is done.
- 70% royalties are easy to understand.
- Paperback publishing has been hard for a number of reasons:
- It's expensive to print books.
- Traditional publishers want only proven authors whose books will recoup the investment of big (or small) print runs.
- Every step of the distribution chain has to be paid, leaving little to pay authors.
- Hardback publishing is even more expensive and so, has less rewards.
Traditional publishing used to have the model of building demand with the expensive hardbacks, then leveraging the profits by producing the lower-cost paperbacks and ebooks.
Self-publishing, as I covered above, uses the reverse model for the same reasons. People who really like the ebook will want the paperback, and if they read it often enough, will want the more durable hardback. (Of course, you better be writing classics for this to take place...)
My studies showed loopholes and potholes.
I took a couple of days to digest Penguin's 1700 classic books to get a set of books as a base. I wound up with about 80, quitting when I started running into their really long tail which never sell even one per day.
I used CreateSpace's royalty estimator to see if they could be self-published and be profitable. See: https://www.createspace.com/Products/Book/#content6 (The trick is to set the price a .01 and it will tell you the estimated costs to produce the book.)
Then I published 8 books on CS to see what would happen.
The first hidden factor I ran into what that there was a gap between what CS said it would cost and what they actually charge.
Any book 108 pages or less is said to cost $2.15. It actually will wind up costing $3.59 Working with these, it wound up being exactly 1.67 difference between estimated and actual.
The second hidden factor was to find that the price minus the actual cost, plus your royalty left a big amount of change on the table. In fact, Amazon only gives you 40% of that possible royalty.
Just the way things are.
Do these steps with a spreadsheet to do your number crunching:
- Take your page count.
- Find the estimated CS cost.
- Multiply times 1.67
- Pick your royalty and divide by .4
- Add that royalty to your actual costs and you'll see the price you'll need to charge.
Run through a few scenarios and you may have some different ideas about what you can make off paperbacks. A nice introduction to this reality, perhaps.
What you'll find is that your costs will tend to raise dramatically according page count. What I found in these books is that they actually cease to become profitable for self-publishing much above 250 pages if you have to depend on the prices traditional publishing sets for those page-counts.
This is because longer traditional press runs make bigger books more profitable, and there POD can't compete. Smaller books have a bigger expense on binding per book, for instance. This is probably why any CS POD books at 108 pages or below cost "the same" in order to keep the business running profitably.
What about Lulu POD?
The biggest problem Lulu has is that they aren't owned by Amazon. CS is internally integrated and so can produce more cheaply. Amazon can also change their prices more easily. Books that are over-priced or under-priced can be adjusted for the best income for Amazon.
When Lulu prints a book, they have to mark it up by 50 - 55 percent in order to cover their distribution partners - who insist on being able to discount any book by 40%. Or that's what I've been able to find out.
When the price/cost of a book goes up $1, Lulu has to raise it by $1.50 or so in order to stay in the distribution game.
(Lulu also has some fudge-factors in their pricing. I took 10 books I'd published as hardcopy there and ran them through a spreadsheet. Most of their added costs were explained as above, although there are some small factors - about 1.4% - that varied according to page count.)
Lulu overall is higher quality than CS, but that doesn't matter. On Amazon, a CS-published book (same author/title) will seem to get preference over a book published outside. Lulu is always higher priced, and has to be searched for in the "other formats and versions" link.
During the last couple of weeks before Christmas, non-CS titles will become temporarily "out of stock" even though there are plenty on hand. The obvious explanation is that there are lags on getting it from the external publishers warehouses to Amazons, so their guaranteed delivery wouldn't be possible. CS is completely integrated with distributed printing (that apparently matches the Amazon warehouse locations) so this isn't a problem. Mostly, that depends on how many units are sold for any given title. Those which sell less than one a week might do fine with a single book on Amazon's warehouse shelves.
The trick is when you try to get a CS book into other independent bookstores. There are a significant percentage which won't take a CS (read: Amazon) published book.
You'll get sales via Ingram of Lulu books where you won't be able to get your CS version sold. Tim Ferriss ran into this when his CS-printed book wasn't accepted by Barnes and Noble - so he marketed it via BitTorrent. Had he known the above, he could have had an easier time of it.
Recommended distribution is then to publish on both at the same time. Use CS for only Amazon-internal editions. Use Lulu for all your "expanded reach" distribution. Of course, there are exceptions. And we all could use more studies than just what I found. These are rough workouts. There are far greater publishing wonks out there than I.
This article simply gives you some tools to work more profitably with.
No real competition...
A key point to know is that there really isn't competition. Amazon knows this with their "also-bought" recommendations. People who buy one book will probably buy more like it. You just must be more creative in your marketing than other authors in your genre.
Be more creative in
- Covers
- Descriptions
- Audience Experience
Never try to compete on price. Your titles aren't commodities. They never have been, never will be.
There is a very funny strategy you can try. I recommend publishing on Lulu in every format you can.
That said, you also publish to Amazon with CS.
So: set your Lulu book price at what the market will support. Then: increase your CS royalty so that price is close to your Lulu book. You'll get higher royalties out of your CS version and benefit by the "competition" between them.
There is an apparent sweet spot in page count.
Because Lulu has to increase by $1.55 every time the costs go up a dollar, above a certain page-count that price becomes hard to support.
I mentioned earlier how the longer print runs affect pricing. This seems to start kicking in at about a 250 page-count. CS books tend to return much less royalties for the same title-author combination. Lulu seems to cut out at under 200 pages. Lulu and CS compare best together at under 100 pages.
If you take the standard of 250 words on a page, a 200-page book is about 50K words, a 100-page book about 25K words. A 100-page book is also in Kindle Short Reads category.
This means that your investment with National Novel Writing Month would pay off if you completed one title, sent it to editing and then started in on your next novelette. Write five days a week, publish two. You'd end up with 10-12 books which would sit on the top end of Kindle "short reads" and also have profitable CS/Lulu paperbacks.
What is a typical workflow to achieve Multiple Eyeballs?
For publishing itself, you want the fewest possible interfaces. Every time you have to shift gears, it's a drain on your resources. So you want to work in batches as you can. Note the terms below:
- "title" is your particular word-collection, usually referred to as a "book".
- "version" is the format, such as ebook, paperback, hardback.
These are the simplest ways to keep everything straight, since all of these are "books."
Again, store all your data in Calibre and keep this safeguarded. Back everything up.
We assume you have the front cover ready.
Also, a 4000-character description (about 3800, actually) formatted with Amazon-acceptable HTML. You'll edit this down for Lulu meta data. Store this in Calibre. (It can even become your backcover text for the paperback.)
1. Start with Lulu. Figuring that you're publishing original material, get each title through Lulu on it's own, in every version. I generate the epub version through Calibre itself, and then tweak it to fit on Lulu. But you can also upload your Word doc/LibreOffice .odt file and let them convert it for you. (Hint: try to keep all images out of it.)
2. Have Lulu distribute your ebook to Kobo and Nook, not Amazon or iTunes (we'll be back for them later.) If you have Lulu create your epub, download it and store in Calibre.
Start now to collect the ISBN's as you publish each version. Calibre gives you hints how to store these.
3. Generate the PDF in LibreOffice as it's simple, accurate, and accepted by Lulu and everywhere else. (I understand Word still doesn't do this natively.)
4. Then submit that PDF to Lulu for both trade paperback and trade hardback versions. Make sure your PDF is formatted for 6"x9" - use their templates until you can evolve your own. (LibreOffice has a nice feature where you can import styles from a document you've used before.)
5. Get the proof into your Lulu shopping cart for the paperback as required. Wait until you have all your title-versions published before you finish your order to save on shipping. (Find their specials by clicking on the Logo on the home page.) Don't order the hardback proof yet.
6. Download the pdf Lulu creates for your cover and edit out their isbn in GIMP (or similar.) This is your cover for CS, unless you want to change it. (Note: you can generate several versions at the cover stage, or go back and create a new one. Simply upload new cover art and let them generate a new PDF you can download right at that point. Perfect time to send out PDF covers to your fans to see which one they like the most...)
7. Get all your titles through Lulu first. You'll use the Calibre and Lulu interfaces for all titles and all their versions.
8. Then publish your trade paperback versions on CS. They have a truly lousy cover creator. Simply upload that cover-pdf you set up above - the one from the Lulu trade paperback - and let them install their ISBN on it. (No, they won't accept a Lulu isbn. But you can buy your own and use it.)
CS takes about 12 hours or so to approve each version. Note that they give you both the full ISBN and also the shorter IBSN-10. That last one is used for Amazon to create their links. (http://amazon.com/dp/[isbn10goeshere])
9. Proof your CS version, once it's approved. You'll be able to do this online unless you have an error in the file.
10. Then submit your titles to Kindle.
11. Then submit your titles to iTunes.
Again, we are using one interface at a time as much as possible. Calibre is the key interface. And I'd suggest dual monitors if you can. Much easier.
12. When the paperback proofs come in, approve them and order the hardback proofs. As above, you have to decide whether a hardback is even needed on the market. For each of your top-selling books, it's probably a good idea. Otherwise, you're probably better off selling them from your own Lulu storefront, where you can set the discount (up to 60%). These are great for offering special editions to your list for "just a dollar above cost."
- - - -
Yes, it's that simple to increase your book publishing income. You no longer have to settle for smaller income from just ebooks.
Good luck with this!
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