Sales Numbers: Part Two
Sales Numbers: Part Two
More on sales numbers below in the topic section.
— It is now last call for October Online Workshops.
Still room and time to sign up. Remember, the workshop only take about 3-4 hours of your time each week at your own pace. And even if the workshop started on Monday, you can still sign up. Not behind at all.
Class #31… Oct 5th … Advanced Depth
Class #32… Oct 5th … Character Voice/Setting
Class #33… Oct 5th … Pacing Your Novel
Class #34… Oct 5th … Ideas into Stories
Class #35… Oct 6th … Character Development
Class #36… Oct 6th … Depth in Writing
Class #37… Oct 6th … Making a Career
Class #38… Oct 7th … Designing Covers
Class #39… Oct 7th … Writing and Selling Short Stories
Class #40… Oct 7th … Adding Suspense to Your Writing
Day was long and consisted of me running massive errands, spending time with bankers, doing a bunch of online workshop stuff, cooking dinner, back to WMG Publishing to do more online workshop stuff, then back home to workshop assignments.
For the third day in a row, I didn’t manage to get to my writing until after 2 a.m. I need to change this habit and get at it sooner. And tomorrow I have to be up earlier. Sigh.
But ended up with 1,700 words in two short sessions.
TOPIC OF THE NIGHT: Sales Numbers: Part Two
If you did not read last night’s topic of the night on sales numbers, please do so before going any farther.
Two readers today mentioned that I didn’t spend much, if any of last night’s post, on the annuity factor of the sales numbers. They were right, I didn’t.
So let me explain why that annuity thinking is critical to all writers now.
Definition of an annuity: Oxford says basically that an annuity is an annual payment provided by a form of investment. Return on Investment.
So you write a novel or a story and you have an investment.
Or put together a collection or some other product. All are investments.
And you can figure your costs on the investment and what you would need to earn minimum to get a 10% annual Return on Investment.
That annual return is an annuity. A payment from an investment.
So now, as a couple people mentioned in private letters, that $250 per year was not much of a way to make a living with your fiction, even though the rate of return is great. I agree.
Here is the thinking if a living is expected from one book. Put $2,500 in the bank and then wonder why you are not living off the payment from the interest.
You wouldn’t expect to, yet writers think they should be making a living off of a few early investments.
So let’s take a five year plan look at this.
Say you can put out six major products per year. One every two months. (That is a pace that most indie writers think is solid and best for their readers.)
So in one year, your annual payment is 6 x $250.00= $1,500.00
Not enough, but you are just getting started.
Second year you still have the first six earning and you add in another six. That would be $3,000.00 at our sales numbers from last night. Still not great, but not coughing money either.
So jumping to five years, you would have 30 properties earning a 10% ROI. (If you do a bunch of stuff right, such as series and things like that at 30 titles, this ROI per title would be higher, but let’s stick with the 10%.)
30 x $250.00 = $7,500.00. Still not a living, but fun and decent money, again with what most would consider failing sales.
And it just keeps going from there. Five years banging at traditional publishers these days might get you one book published you don’t own the copyright to and maybe a $5,000 advance.
So every year after that in indie publishing, the annuity amount from your investments just keeps adding up as long as you keep writing and putting out work.
Now let me look at what I have done in the last two years. Ready? Remember, I used my math last night on my hourly rate and so on.
Last year, I put out 28 major products. The year before I put out 13 major products. Major products means novels, collections such as Smith’s Monthly or Stories from July, and nonfiction books. I am not counting short stories.
This year I am on schedule to put out 34 major products if the last three months go as planned.
75 major investments in three years.
In essence, I built 75 rental properties in a subdivision in three years. All are rented and paying me on my investments.
If each one averaged $2,500 in costs, that means I have sunk into my investment portfolio about $187,000.
A 10% ROI on that is $18,700.00.
(One note: If you look at last night’s numbers, I had about $500 in actual costs per book. Actually, on many it is a lot less in actual money out of pocket, but say the number is $500 per title x 75 titles = $37,500.00 spent for an investment base of $187,000. Yeah, not figuring that here.)
Now, I must admit, I made a ton more than $18,700.00 from my writing over the last three years. Which means my ROI is very, very high. That makes me smile.
But even if it was at 10%, I built myself an investment that will continue (as long as I do some basic upkeep) for year after year.
So even if I stopped except for a little upkeep at the end of the year, I would have investments that would just keep paying me over $18,000 per year off into the future for my last three years of having fun writing.
And that’s at sales levels most think are failing numbers.
Writing is an investment. You are creating property. Some pieces of property have a better rate of return than others, but every story, every novel, every collection and so on are all investment properties.
And if you just keep writing and don’t sell all rights to traditional publishers, your long-term future is pretty darn rosy.
The Writing of STAR RAIN: A SEEDERS UNIVERSE NOVEL
Day 1…. 2,550 words. Total words so far… 2,550 words.
Day 2…. 2,350 words. Total words so far… 4,900 words.
Day 3…. 2,500 words. Total words so far… 7,400 words.
Day 4…. 1,200 words. Total words so far… 8,600 words.
Day 5…. 1,500 words. Total words so far… 10,100 words.
Day 6…. 2,000 words. Total words so far… 12,100 words.
Day 7…. 1,700 words. Total words so far… 13,800 words.
Totals For Year 3, Month 3, Day 6
Writing in Public blog streak… Day 786
— Daily Fiction: 1,700 original words. Fiction month-to-date: 13,850 words
— Nonfiction: 00 new words. Nonfiction month-to-date total: 600 words
— Blog Posts: 1,000 new words. Blog month-to-date word count: 5,900 words
— E-mail: 26 e-mails. Approx. 1,200 original words. E-mails month-to date: 143 e-mails. Approx. 5,500 words
— Covers Designed and Finished: 0. Covers finished month-to-date: 0 Covers
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Not to extend the metaphor too far, but it occurs to me that when I write a story, I think I’m done. I send it out to the digests and so forth, some sell, others don’t. So what I have essentially is a pile of lumber (manuscripts) and some land (undeveloped website, a pitiful trial story up on Smashwords), instead of a marketable rental property. You’re a businessman; can you see any flaws in this business plan?? (grin)
LOL, Dave, yup a few. (grin) The first part of sending them out is great. When they sell, you get paid to advertise your other work.
The problem is the other work. (grin) But really good extension of the metaphor.
This is a great reminder of how this really works, Dean, and very timely for me. My husband and I were just talking about the long term business goals for my writing, and I was explaining some of this to him. He doesn’t get it all yet, but he’s starting to.
And when you break down the numbers the way you have, it seems so very reasonable and very achievable. Not easy, but doable. Helps to give me a clearer picture.
Hope Kris is feeling as well as possible.