A Response to "Crunching The Numbers"

[pameladlloyd]

I recently came across the blog, Publetariat: People Who Publish, through an article to which someone on my reading list linked. The articles I saw on their blog were articles that had been republished with the permission of the original authors and I found many of them interesting, so I started following the blog. Then along came this article, which Publetariat states is included in their Vault University as a "sample" article, Crunching The Numbers: How It's Possible To Sell Every Copy Of Your Self-Published Book And Still Lose Money (And How To Avoid That Outcome). Looking more closely at Vault University, I see that they are offering a "curriculum" centered around self-publishing.

[As an aside, at TusCon 36, Mike Stackpole spoke for most of two hours on self-publishing and related issues, so you can expect a future post on the subject.]

I don't feel that the figures given in Crunching The Numbers are reasonable, at least with regard to the cost of getting books into the hands of readers. Here's why:

1. Someone who orders a book expects to pay for postage, so it's far more reasonable to assume that the self-published author will charge for postage.
2. The actual cost of postage for a standard hardback is closer to $3.50, which I know because my family has been involved in the used book market and has shipped many books.
3. It's not unreasonable to charge one's customers a fee of $6 for shipping and handling within the U.S., with appropriately higher fees for international purchases, should you choose to ship world-wide.

So, instead of adding $89,700 to the author's expenses to cover the postage, if one assumes that the author only charges $2.50 more than the cost of shipping regardless of the final destination, and that the author does his or her own handling, rather than paying someone to do it for them, it's possible to actually subtract $25,000 (10,000 x $2.50) from the expenses (or add that to the profits, which is the same thing). Here's what happens to the table of expenses shown in the article, showing what happens when you make the changes I've mentioned here:

Item	Income/Expense
10,000 books sold at US$20 each, minus 3% proc. fee	+ $194,000
Fees paid to Publisher X for setup, + add-on services	- $10,500
10,000 copies of book @ $12 per copy	- $120,000
Shipping from Publisher X	- $5,000
Padded envelopes	- $1,000
Shipping to all buyers, 10,000 copies @ a profit of $2.50 ea	+ $25,000
Total	+ $82,500

 
 
Now, I'm not going to go to the effort of verifying the rest of these figures; I certainly don't have any experience or particular knowledge of self-publishing. But, I don't feel it's reasonable or necessary to exaggerate the financial costs of self-publishing a successful book (i.e., one that sells out) in order to suggest that one needs to be cautious when considering self-publishing, primarily because it makes far more sense to be aware that very, very few self-published books will sell in large enough numbers to pay back the cost of publication.

Comments

[mikandra.livejournal.com]

I find these figures very unrealistic still. $12 per copy at 10,000 copies? What printer was she with? One of the books I had printed was full colour printed on glossy paper. I printed 3000, and they cost me $5.12 (AUSTRALIAN DOLLARS) per copy, INCLUDING shipping from Hong Kong to Sydney. No one is going to tell me that a fiction book on fiction-quality paper, printed in b/w in that sort of quantity is going to cost $12 per copy, not even if you include editing and cover design costs.

[pdlloyd.livejournal.com]

That's just the sort of data point I lack, but am very happy to learn. Thanks!

I was curious about the exchange rate, so I used XE.com (http://www.xe.com/)'s Universal Currency Converter (http://www.xe.com/ucc/) to check. 1 US dollar is currently the equivalent of 1.09372 Australian dollars, so $5.12 would be approximately $4.68 US dollars; a substantial savings, indeed.

However, given that not all self-publishing companies are operating in the most ethical way, I do believe that authors often wind up paying inflated fees. If, instead of relying on a self-publishing firm, an author were to go to a printer, they probably would get a much better rate.

[green-knight.livejournal.com]

The figures I have heard - and I haven't checked them out, but they feel right - is that the breakeven point lies somewhere around 350-500 copies. This assumes a) Lightning Source (which has lower costs than any PoD outfit that uses Lightning Source as their printer, and most of them do), and b) takes into account costs for storage and fulfillment. One of the points of using a POD printer is that your garage remains available for your car, and you don't have to run to the post office to mail orders. You also don't have to put all the money down ahead of the time - and even at current interest rates, that's a cost of business you need to take into account.

If you have preorders, on the other hand, and people have already given you money *to* print a book, then you need to find a cheap printer and run with it. I'd probably go with preorders x1.5 initial print run.

[pdlloyd.livejournal.com]

You've clearly thought about this. It's all pretty academic for me, since I've yet to finish a novel, but I do find it interesting. So many things that were taken for granted just ten or fifteen years ago, or maybe only five, seem to be changing.

The info about Lightning Source is useful. Thanks!

[green-knight.livejournal.com]

I've looked into becoming a micropublisher. The venture I had in mind didn't work out, but I'm keeping an eye out for books to republish. POD is a wonderful way of keeping out of print books available; I think that is its strength. It's not a way to launch new careers in fiction. Localised nonfiction, out of copyright & unavailable, backlist - those are the books that POD was made for.

That said, I'm might, at some point, release my small press novel (not enough scope to interest the big publishers) if I cannot place it - I've moved on and I keep writing and improving; but it's too much fun to _just_ sit in a trunk under my bed.

[pdlloyd.livejournal.com]

I look forward to seeing Green Knight Press someday, then. (By whatever name you actually use. :))

I'd love to hear someday that your small press novel has been published, whatever the source of publication.

[mikandra.livejournal.com]

Note that I didn't comment on the advisability of printing 10,000 copies the old-fashioned way, which I frankly think is ludicrous.

To me, the 'sums' (I'd prefer to call them something else, like 'lies', because they are nowhere near realistic) show that whoever wrote this has NO IDEA of the printing business and printing options. Even if you go POD for 10,000 copies, there will be options that are cheaper than $12 per copy. Someone who pays $12 per copy is being FLEECED.

What I'd do is the following: find a POD printer locally (meaning: in your country), through the yellow pages. Look for Printers - commercial. Ring them up. Talk to them. Ask them to give you quotes for: 50 copies, 100 copies, 250 copies, 1000 copies. By the time you reach 1000 copies, but possibly before that, you'll hit the point where 'traditional' print becomes FAR cheaper than POD. But... do your market research first. If printing non-fiction, you may well want to go for the higher number. For fiction, I would not print more than 100 copies for initial sales(through POD). Use those copies for books you sell yourself (at cons etc, and via mail), within your country. Use Lulu/smashwords/createspace (or all of them) for your overseas sales.

You really need to watch postage, because it's quite expensive to ship books. We pay about $8 within Australia for a book (I sell books online), and about $30 for overseas air mail postage.

Shipping books overseas via surface mail... don't do it. JUST DON'T. Read this http://mikandra.livejournal.com/291527.html

[pdlloyd.livejournal.com]

Yes, the whole scenario is responding to a situation that feels a bit behind the times, but there are still people who fall into at least some of these errors, or Harlequin and other publishers wouldn't be joining with Author Solutions (http://accrispin.blogspot.com/2009/11/harlequin-horizons-another-major.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+AtLastWriterBewareBlogsAcCrispinAndVictoriaStraussRevealAll+%28Writer+Beware+Blogs!%29&utm_content=Google+Reader) to create a new self-publishing venture. Even so, I found this article's attempt to hype the losses while promising to help authors avoid losing their shirt to be an example of another form of predation on authors: present the big scare story, while promising to protect the poor innocents from the big bad wolves.

[green-knight.livejournal.com]

I saw the original post and rolled my eyes.

The writer has gathered a tremendous amount of preorders, and completely failed to do his homework.

If you expect to sell a tiny number of copies - 0-50 - then going with a complete POD service like Lulu is useful. If you expect to sell a small number of copies - 50-300 - then setting up an account with Lightning Source makes sense. If you expect to sell more than that, you need to find a traditional printer and do it properly.

In any case, I believe it's better to find and pay your own book professionals (designer, editor etc) than to spend $$$ for someone a vanity publisher found - professionals who get paid peanuts tend to do a bad job. Better funnel the money to the professional directly, without a cut to the company, and get someone who works for and with you.

The writer in question paid money to a vanity publisher. All that proves is that he has no business sense at all, and the lure of 'I'll be a published author with lots of sales' overrode whatever sense he had. Of course he lost money. Anyone can lose money if they're stupid enough: he sold something without costing out how much it would be to produce and ship it, and thus sold large amounts at a loss. I believe that's not entirely unknown in the business world...

[pdlloyd.livejournal.com]

My interpretation of the article was that it was written as a come-on to get authors to enroll in the Vault University curriculum, and was intended to show them how much money they'd lose if they attempted to self-publish without the benefit of the site's expertise. I hope the author mentioned in the article didn't actually do exactly what was mentioned in the scenario, even if they did sign with a self-publisher. Unfortunately, I'm a bit suspicious of the figures in the article, which reflect a lack of business acumen that seems unlikely, given that the writer had the sense to get pre-orders.

[green-knight.livejournal.com]

I didn't look at the context, I have to say - I saw it linked from a publishing discussion, and as I said, rolled my eyes and moved on. Unfortunately, given that people are willing to pay $$$$ for 'self-publishing services' they could obtain more cheaply or that are highly dubious (Harlequin: we'll spam the world with a book trailer for $20K') I wouldn't be surprised if somebody had priced their book without taking P&P into account.

[pdlloyd.livejournal.com]

Too often, people hear what they want to hear and stop there. My friend who succumbed to an "agent" who convinced her to self-publish ("it'll help you sell to NYC publishers," etc.) certainly did that and she sure didn't want to hear anything different once she'd made up her mind.

[green-knight.livejournal.com]

The problem is - and that's the main problem with the Harlequin thing - that the vanity publishers know how to exploit the dreams of writers. They plug into the hopes and the entitlement (I've spent so much time and effort writing this book, it deserves recognition) and feel them so they can make money.

And these people _good_ at selling the publishing dream. Which makes me all the more angry that Harlequin is using its name to prey on writers.

[pdlloyd.livejournal.com]

Yes. I wish they'd (any of the publishers choosing this route) put their ability to sell dreams to work for a few more novels, instead of looking for ways to rip off writers. Writers are, after all, the source of their wealth.

[green-knight.livejournal.com]

Writers are an easy target. There's a lot wrong with corporate bookselling - but in order to grab back some of the people who buy second hand and ebooks and friends reccommendations only they need to produce books for the reader market, not the 'buy the book of the moment for certain occasions, eg beach read, cookbook for Christma, celebrity biography' market. Not all publishers are so shortsighted - but the big conglomerations seem to not grok how books work. Harlequin's behaviour is only supporting that theory.

[pdlloyd.livejournal.com]

Writers' dreams can be very strong. Corporate greed, likewise.