The New World of Publishing: The Money is All in the Numbers
I have wanted to write about this topic for some time, but just didn’t have enough data to trust my instincts that indie publishing would function as traditional publishing does, but now I do.
Summary Statement: To make a living at indie publishing, you must have a decent number of books and stories for sale.
Of course, in some cases this isn’t true. In some cases a writer can hit what I call a “home run” and sell a ton of one book or one series quickly and make some nice short-term money. But for the vast majority of indie publishers, that’s not how it will work. Our sales will be solid if our storytelling is solid. But no big numbers like the news we read about with Hocking or Konrath or (insert name of recent big indie seller).
And honestly, as a life-long midlist writer, I find that normal. I have, at my last count, just over nine million copies of my books in print, yet I have never had any big splash. Just a book here, a book there, and a lot of books selling over decades. And none of that counts any ghost-written novel or indie-published title. (The number would be a ton higher if I counted those.) Just traditional novels through traditional publishers under one of my own names.
Do the math: 9 million divided by about 100 books = 90,000 average sales per book. Did every book do that? Of course not. I had a couple that haven’t sold a thousand copies yet and never will. (Thankfully for the most part.) So that means I had books that sold way over that 90,000 copy average. Yup. I have one book that is still selling and just went past 1,100,000 copies. The point is that in both indie publishing and traditional publishing, it all averages out. More on this later.
Now I made a lot of money over the decades on those books, enough to live very nicely most years. I even hit a few bestseller lists along the way. But in all reality, I’m a midlist writer. And I’m fine with that. It has trained me well for being an indie writer.
Quantity in Traditional Publishing
Traditional publishing is built on the concept of quantity. Not so much on sales-per-book as so many think, but on numbers of different titles that are for sale. (In modern publishing the quantity has come from many different authors, but in the history of publishing it always wasn’t that way.)
Let me repeat that so it doesn’t get skipped. Traditional publishers depend on numbers of different titles for sale.
Sure, they hope each month to have a top seller (or a home run) on a list, but those books are not what pays the bills month after month. It’s the quantity of books (titles) on the lists and all the varied lists under a publisher that pays the bills.
Why? Because a publisher can’t control what a single title will sell.
They can, however, control how many titles they have for sale.
Just as an indie writer can.
A list for an imprint is anywhere from three to seven books (titles) per month. Month after month, year after year. A list with four titles per month will publish 48 books per year. And that imprint will be one of dozens of imprints under a publisher brand, and that publisher will be one of dozens under a larger publisher or corporation, and so on.
After expenses, meaning overhead and employee wages and production and author costs, a publisher hopes to make a 4% profit margin (varies from company to company).
Let me be clear here again. That’s after paying the cost of the space used in their big building, the utilities, the wages of editors and managing editors and art directors and sales force and author costs and everything. The 4% is the amount the publisher hopes to show in profit over the top of all those expenses. On every book.
(Yes, yes, I know I am making this absurdly simple…but this isn’t an accounting class or a lesson in publishing profit-and-loss statements.)
Of course, since figuring what readers want is not an exact science, that profit-per-book is only a hope.
Some books lose money, some make more than expected. But the hope and goal is that the average over a line of books over a period of time will be around the 4% figure, give or take. If the book line loses money regularly, the editor is eventually fired or the imprint or publishing company is killed. Just business.
If these big publishers were only publishing one book (or even only one hundred books) per month, they sure couldn’t afford the big buildings.
Quantity in numbers of titles is everything.
Indie Writer Mindset
When the electronic revolution started to hit books and a few authors discovered how really simple it was to indie publish, lots of talk started about how writers could get rich by just indie publishing their first or second book, and a few writers actually did. And so much talk turned to the silliness of promotion and cheap pricing that many solid business aspects of publishing were forgotten by the writers.
Or more than likely never learned.
Writers as a class, after all, are not known for great business sense. That’s a proven fact since so many writers just let almost total strangers handle all their money and the paperwork for that money and call giving that person that power a success. (You know…agents…)
So without hitting a home run, how do writers get rich in indie publishing?
Just good basic business practices is how.
Plus a wonderful fact:
We get most of the money!!!
Some of us who have been around publishing a long time realized early on that we could not only get the writer percentage of sales, but the publisher percentage of sales and the publisher’s overhead percentage of sales as well. And even that publisher profit margin.
In other words, we could get everything but the distribution/bookstore costs.
Indie-published writers got all the money that publishers used to get for building those huge buildings in New York. Instead of getting 14.8% on electronic sales (25% of 70% – 15%), that publishers were offering, we got 65-70%. Period. And we could put books on our own web sites for sale and maybe even make 100%.
And even more importantly to us midlist writers: All our backlist suddenly had value again. (This is huge!!!)
And we writers could write what we wanted and let the readers decide if it was worth buying or not.
We had freedom in writing and we made a ton more money per unit sale.
What was not to like? Duh.
But many indie writers, since this is all so new, have been lost in some of the old ways of thinking. Many things are different. But many things are the same, and that’s where things get confusing.
A few examples I have talked about in other installments of this series:
—Books are no longer produce. This is vastly different from the old ways of thinking in publishing and how publishers still think about sales to bookstores. How a book sells in the first week or the first month means nothing in this new world of unlimited electronic shelf space.
Slow sales and slow growth are what matters now.
This is very hard concept for many indie writers to grasp, thus all the constant talk about promotion and price-changing because a book doesn’t sell instantly on one site to some magic idea by the writer of what it should sell or what some friend’s book sold.
Let me repeat: Books are not produce. They don’t spoil.
— Most books are never home runs. This is true in traditional publishing and even more so in indie publishing. Most books are just good, solid, steady-selling books. Changing prices, changing covers, and so on every month just won’t help what a book is.
Most newer writers both in indie publishing and traditional publishing have to learn this fact the hard way. It takes fantastic skill to write a book that millions want to read. That skill doesn’t often happen on the first few books of an author.
— Quantity in numbers of titles still adds up to a large income. Traditional publishers have known this for a couple hundred years. Most indie publishers for the most part have yet to learn this fact. But the great part of getting 70% of sales is that to make great money we don’t have to sell as many titles at very low sales-per-title numbers to make huge profits. Writers don’t have, for the most part, huge buildings and hundreds of employees to spread out the overhead.
And most of us can do the work ourselves and keep overhead down to almost nothing.
But all that said, indie publishers still must have some quantity in numbers of books (titles) for sale.
What Is Quantity in Indie Publishing?
As many books selling as possible with no right answer. But the key is to think long term.
If you write two novels per year and each novel you put up increases your indie sales, where will you be in ten years?
Easy. Twenty books up, all still selling at one level or another because (repeat after me) books don’t spoil and new readers are always out there.
So do the math. Say your twenty novels averaged across all sites (not just Kindle and B&N, but all sites around the world) one sale each per day. (It won’t start that way with book #1, but with twenty books up, you will be doing that fairly easily.) Some would sell more, some far less, but the average is good and very, very conservative.
$4.99 price x 20 sales x 65% = $65 per day. About $23,700 per year. Nothing to sneeze at. And each year using those numbers and writing two books you would be adding into the income another $2,100 per year.
And, of course, if one book or one series takes off in a “home run” fashion, it will drag all the rest with it. You might not write your home run book until year twelve.
If you are spending an hour per day and writing 1,000 words per day, that means you are producing four books per year. That total income number (above) at that pace is reached in five years instead of ten.
However, if you are only looking at that first book and it sold on the average I used above, you would make about $4.99 x 365 days x 65% = $1,183.00 per year.
Trust me, that will look awful on Kindle and the other sites (your checks will be under twenty-thirty bucks per site), even though it will add up to that larger number in a year. You will think you have failed. That your book sucks. And if you follow the boards, you will start playing with your prices and covers and hurt your book even more. When in reality your book is doing just fine.
Backlist is King
For as long as I have been in this business, backlist sometimes resold, but most of it just went dead. The files were lost, the yellowing-paper stories were buried in old file cabinets you never bothered to open. And as a midlist writer, I often signed contracts for only the money, wrote the book hard and fast under one name or another, and then forgot it because I knew it had no second life.
Well, I was wrong.
When this indie publishing started to become a glimmer of reality, Kris and I figured out that we would have over 700 short stories and novels in backlist (or books that had never sold) to put up with WMG Publishing. So three-plus years ago we went to work to get all our rights back on all our books before New York knew what they were letting go of. And we got almost all of them.
Just over a year ago we helped start WMG Publishing and made the agreement that our backlist would have the attention to start and then eventually we would turn to original stuff as our traditional publishing contracts allowed.
Then I started writing original short stories for this challenge and haven’t put up a backlist short story of mine for six months. And this December WMG Publishing will put out the new book in Kris’s Retrieval Artist series. So we are still working on backlist, but also starting into new books and stories as well.
In the first year, WMG Publishing got up over two hundred different titles.
Now granted, most of those are short stories, and twenty-five are collections and another fourteen are short novels. But we started last January putting up backlist novels as well and have about fifteen or sixteen.
Are we making a living at 200 backlist titles? Yup, by almost any standard.
It’s regular checks, which as a freelance writer for decades, just seems odd to me. (I can’t give you actual numbers because not all of them are mine and no one has figured out a way for me yet to easily pull out my own numbers.)
And for the last two months due to events in the real world, WMG Publishing has put up almost no new books. Yet the income has stayed solid.
Let me say that again: We have put almost nothing new to spur on sales in the last two months and over that time the sales have stayed the same and actually gone up a little.
That fact solidified what I knew was happening.
Quantity in numbers of titles was a direct relationship to the amount of money we make every month on average.
Just like traditional publishing.
To be clear, the 200 books WMG Publishing has up have these details:
— It is almost all backlist.
— It is almost all short fiction.
—We have had no home runs, no big sellers, and many, many stories and novels of ours sell no copies on some site each month.
— We have the stories up under a dozen pen names and scattered across every genre.
— We have done no marketing and don’t care to at the moment.
All our focus has been on learning how to get our work back into print. We have twelve books in POD with more headed that way every day. And we will be focusing on selling into bookstores in 2012.
In other words, WMG Publishing is functioning like a traditional publisher. And growing, because Kris and I still have another 500 novels and short stories from thirty years in our backlist to get published, not counting frontlist work.
I love this new world.
How Can You Do The Same?
— Most Important Thing You Can Do is LEARN HOW TO DO THE BOOKS YOURSELF!!!!!
This will cut down on all overhead and make putting up a lot of work reasonable. This is not rocket science and can be learned.
It is a painful learning curve, yes, and frustrating, yes. I know, I went through it instead of just letting WMG folks do it. If I can learn it, anyone can do it. Read the Smashwords guide, read the directions on Kindle, and then just do it. It doesn’t have to be right, but the book or story has to be up for sale. You can always fix it later. (And don’t worry about POD up front. That’s another animal.)
— If you have been writing for a time, dig through the old files.
Make an inventory list of your work and plan on getting one of those old stories published every week. You do that, with new stuff and by the end of the year you will have over 50 or more stories up. And the money will be growing. If the story sucks in your opinion, put it under a hidden pen name and let the readers decide. You might be right, but you might be surprised. (Both Kris and I already have a number of these and they sell just fine.)
— Do no promotion. Just focus on only getting more books and stories up.
Yeah, I know, I know. How will anyone find your work if you don’t promote it? Announce it on your web site, announce it on Twitter and Facebook, and then move on to the next story. You can promote after you have fifty or a hundred things up. Then the promotion and sales and loss leaders will have value.
— Focus on writing shorter lengths if possible.
Even if you are a novelist. Remember the one-hundred-thousand word novel was an artificial creation of the publishing industry over the last forty years to justify price increases. Let your stories go natural lengths. You will discover that most novels are fine around fifty-to-seventy-thousand words. Sometimes shorter. Just write the story you want to write.
— Combine to create more product.
This is only limited by your creativity in some cases. Short story collections are logical, both five story and longer collections. But also short novels can be combined or series books can be combined and so on. More products equal more sales and more money.
— Stop sweating the small stuff.
My early covers sucked, and we had some formatting issues. Some of those early ones have been changed, some haven’t. Who cares? I’ll get to them eventually. Or someone at WMG will get them fixed. But if I had worried about every detail, about the covers being perfect, about every word spelled exactly right, and so on, WMG Publishing might only have twenty-five books up and be years from making a living. Get the title published. Fix problems that arise later.
— Most importantly, focus on being a writer.
Writers are people who write. Focus on finding more time to write. That one extra page, that one extra story. Every story, every book will give you more inventory, more titles, and thus if you get it up, more money year-after-year.
Not much to summarize in this post.
Unless you get lucky, you won’t make a lot of money in indie publishing unless you act like a traditional publisher and get many titles up for sale. But if you get a lot of different titles published, you will be surprised as the money just slowly grows and grows as you put more and more titles up for sale.
In writing you can control how much you write. You can’t control if any editor or reader will buy it or not.
In indie publishing you can control how many titles you have up for sale. You can’t control how many copies each title will sell, but if you have a lot of titles for sale, what difference will that make?
You’ll be making too much money to care.
Copyright © 2011 Dean Wesley Smith
Cover art copyright Philcold/Dreamstime
Okay, I admit it, I had issues at first with putting in a tip jar in the Magic Bakery. It was one of the “I have it made, why do I need to support my writing with tips.” A minor myth, sure, but still one that took me a few days and some talk with Kris to get past back when I started this series.
And speaking of the Magic Bakery, this chapter is now part of my inventory in my bakery. (Confused on that, read the Killing the Sacred Cows of Publishing post about making money with your writing. I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.
If you feel this helped you in any way, toss a tip into the tip jar on the way out of the Magic Bakery.
If you can’t afford to donate, please feel free to pass this chapter along to others who might get some help from it.
And I would like to thank all the fine folks who have donated over this last year. Once this book is done, I will send you a copy. The donations and the comments both after the posts and privately are really keeping me going on this. Thanks!