Think Like A Publisher #9.5… The Secret of Indie Publishing
Taking a break from the sales part of things, I want to back up for a fairly short chapter on how publishers think about income.
Call this Chapter 9.5. Why Having More Product Is Better Than Having Less Product.
I have heard over and over and over from indie publishers how their sales are not what they expected, or how they hope to promote their way to a big seller on their one book. Up to now I have mostly just bit my lip and kept my mouth shut.
It just doesn’t work with one or two or even five stories up. Or at least it doesn’t work that way unless you are fantastically lucky and wrote a great book on the exact right topic at the exact right time. I hate planning on being lucky to make it. I want to plan on hard work and quality writing.
But at the same time, do I expect every indie publisher to even think about doing what I suggested in #9 and sell books to indie bookstores? Of course not. That’s far more work and business knowledge for most indie publishers to handle.
So how can an indie publisher plan on making a living, paying the bills, without “luck” coming into play and without sending out thousands of flyers as I suggested last chapter?
Simple, actually. You have to write more.
And if you write more, you can count on the churn, the coin drop, the arm pull, the grind, whatever you want to call it.
An indie publisher needs a lot of products across a lot of sales locations all selling small amounts.
I have talked about this in various ways in other chapters and in other places. But here I want to try to be clear and put it together quickly one more time because this kind of thinking is critical to indie publishers.
Produce Model vs Long Term Sales Model
Publishing for the last sixty-plus years has worked on the produce model, meaning that traditional publishers treat every book as if it is a piece of fruit that will spoil if not sold quickly. They made every book into an “event” to help sell the books quickly. And if the books didn’t sell quickly, they were pulled from the shelves like bad fruit and trashed.
The reason for this is actually fairly simple. Physical shelf space is limited and the number of books being produced far, far exceeded the shelf space available. So if a book didn’t sell quickly, it was replaced with one that might.
Now, with electronic publishing and POD publishing, the shelf space is unlimited. And there is no hurry. A book can just sell along at a pace and as readers hear about it and find it, the sales can grow slowly.
That unlimited shelf space is the largest change in publishing the electronic device has brought about. And we have just begun to see the ramifications of that one aspect of bookselling alone.
Now, all publishers can do the work to list a product for customers and just leave it to sell.
Indie publishers need to lead the way into long-term thinking.
Books do not spoil.
And a reader who finds your book four years after you publish it is just as good as a reader who finds it the day after you publish it.
Places to Sell Books
Just this last week Kindle opened up its store in Germany and made selling through it automatic for all of us. Nice!
Kobo is opening stores in numbers of countries this next month.
iBooks already sells in many countries.
And the expansion continues of electronic book sales around the world every day and more and more people buy readers and smart phones.
Here in the States, the percentage of electronic book sales compared to traditional book sales continues to expand. And that’s not even counting that indie publishers, with some work and minor investment, can sell into the bookstores with POD books as I have been talking about.
But for the sake of the math, let me just say that there are twenty major outlets for book sales right now that any indie publisher can get to with almost no work and almost no money. We counted them #7: Sales Plan. With Germany Kindle store opening now, there are actually twenty-two.
There are a lot more, but for simple math here in early 2011, let me just use twenty. (Excluding all sales to indie bookstores.)
$4.99 electronic cover price on a novel or long collection.
$4.99 x 70%(publisher share) = $3.50 profit per book.
100 sales per month total (over twenty locations, including POD). (1,200 sales per year.)
(By the way, if you sell about 30-35 novels a month on Kindle US and have spread your book out to all twenty plus locations, you will be selling about 100 copies per month total across all sites. In general. You just won’t know that total until about four or five months later. And then only if you are good at accounting.)
100 x $3.50 = $350 per month or $4,200.00 per year.
Nice, but not a living. But if you have ten books up, the total is $42,000 in a year. And twenty books up the total is $84,000 per year.
(Write four pages per day to finish four novels per year and get to twenty books in five years. As I said before, indie publishers must write more.)
Over $80,000 per year with no home run, no nothing. Just sort of puttering along.
Will every book sell exactly the same? Of course not. One will sell two or three hundred a month across all the sites, another will sell twenty.
But you average them together. And that is the key.
And that is how traditional publishers think, and how indie publishers need to start thinking.
A small traditional publishing imprint will publish four or five products a month, sixty per year. They only hope to make around 4% profit margin and not every book will do that, and some will do better.
Traditional publishers look at the average and look for profit over a quarter and a year and trends from year to year.
That’s called basic business.
Indie publishers need to start looking at the averages. And make writing new product the most important thing you do every day.
Indie Publishing Average
The problem with indie publishing at first is that the writers watch their numbers and get discouraged. I have told the story many times how last May Kris walked into my office and made an off-handed comment about how the three short stories I had put up quickly in December of 2009 were making $12.00 a month on Kindle. They were the only three we had up at that point.
Three old short stories. $12.00 per month one site. Was I discouraged at that? Heck no. (But many writers would be.)
Honestly, I had forgotten they were even up. And $12.00??? Holy crap! I wouldn’t even let myself believe it for a while. I just kept doing the math over and over and over.
Across my office are sixteen metal file drawers full of short stories. Kris has double that. And that is not counting the massive number of large file cabinets downstairs with novels in them. All stories and novels basically dead to the old way of produce-thinking. I swear those file cabinets turned from an ugly puke-brown color to pure gold as I stared at them.
I have far more than a hundred short stories, Kris has two or three hundred, and yet three old stories were making us $144.00 per year. Holy crap! (You do the math. And don’t forget to add in collections at $2.99 and $4.99.)
Was I discouraged at seeing only $12.00 of sales? Nope. I got excited.
With some help Kris and I formed WMG Publishing. We have been off and running since last July.
WMG Publishing now has over 160 stories, collections, and novels up and the list is growing steadily every month.
Again, just do the math. Trust me, 160 stories, collections, and novels sounds like a lot, but you can get to it as well given time and a lot of writing, even if you don’t have a backlist like I do.
A friend of mine is writing one short story per week and has made it to 26 weeks now since last fall. If she hits one year, she will have 52 short stories.
Let’s say she put all 52 up like I am doing on my challenge. And she also got ten 5-story collections up and five 10-story collections up from the stories.
She would have 67 items up and selling. If she keeps on for a second year, she would be at 134 stories and collections up. A third year and she would be over 200 stories and collections up. And many of those collections could also be put into POD and sold like I talked about last week.
In contrast, in traditional publishing, you start writing one novel now, finish it, send it to New York, say it sells at light speed in six months. It will still be three years from the time you start to the time you see the book in print. My friend will be making great money in three years. The traditionally published writer will have a book advance.
Indie publishers need to write like an old pulp writer. Fast and hard and get it into print.
So what can an indie publisher count on for sales? Is there a floor?
With one story? Not a clue. You might not sell a single copy across all twenty sites in a month.
With ten short stories, you should be able to start seeing average sales.
I use five sales per story average for short stories and collections across all sites and to be honest, many, many people tell me that after twenty or so short stories, that average is low (when you count all sites and not just Kindle). It is low, very low for me and Kris, but I like to be very conservative.
Novels sell better, so I use a floor of twenty-five sales for novels total per month across all twenty sites.
But again, you must have a decent number published and selling so the amount can average. (I am not talking about Joe Konrath numbers here, just us normal mortals.)
The Math Again
Using my friend’s example of writing drive, let me see what she might make.
—- Short story sells for 99 cents. You get 35 cents minimum. Up to 60 cents on some sites, but use 35 cents for now.
5 x .35 = $1.75 per story per month. Or $21.00 per year per story.
—- Five story collections sell for $2.99. You get 70% or $2.10.
5 x 2.10 = $10.50 per collection per month. Or $126.00 per year.
—- Ten story collections sell for $4.99. You get 70% or $3.50.
5 x $3.50 = $17.50 per collection per month. Or $210.00 per year.
Writing five short stories can make you in one full year of really minimal sales $21.00 + $126.00 + $210.00 = $357.00 per year.
Writing 50 stories in a year as my friend is working at doing can make $3,570.00 per year at minimal sales.
Writing 50 stories a year for three years will give you a base income of over $10,000.oo. Assuming the average stays on the bottom at five sales for each story or collection across all twenty sites. Which it will not with that many stories available.
Now, say you stopped and the sales just continued on. In 9 years you would have made over $30,000.00 if everything stayed the same and the sales stayed on the bottom. And you didn’t write another word.
No matter what you do as an indie publisher, you must be writing first. You must be creating product.
In the first golden age of fiction, the pulp writers got very, very rich at 1 cent per word in the middle of the Depression.
We are in a new golden age of publishing.
We can write a few books, treat them like events and spoiling fruit, or we can write all the time, have fun, write what we want, put them up, and then just keep writing.
We now have the choice to go either to traditional publishing or do it ourself with indie publishing.
But just as it has been for hundreds of years, the writers who will make it on either side, traditional or indie, are the writers who just keep writing.
And that really is the secret.