I talked with two very different aspiring publishers in the last 24 hours, both of whom had committed serious time and resources to preparing to launch their own publishing houses. Both were considering using print on demand (specifically Lighting Source) in their business, but the similarity ended there. To put it as simply as possible, one had a business plan, the other just had an idea. I don't mean that the idea man hadn't done a lot of work, in some senses, he was further along the path to publication, but he was shooting from the hip and throwing around money without having figured out exactly what the business would be.
People have different reasons for starting their own publishing house. Some have written a book they can't get published by a trade, but are sufficiently entrepreneurial to ignore the subsidy press route. Some genuinely want to create and grow a publishing house, whether self publishing or otherwise, and some just chose publishing as a business venture. I'm not sure what attracts non-writers to publishing, it's a tough enough business to get into even as an author, and the competition amongst publishing houses is cut-throat. One factor that has to be considered in any model for a new publishing house is whether it can stand competition from the big boys. If you compete in a small pond, competition from the major NY trades isn't a major issue, but if you are launching a new genre with a "wow" effect, you better believe that as soon as it shows up on the radar, some heavy-hitting publishers will rip-off your idea and completely change the economics of your business model.
That's where having a business plan comes in. If you want to start a publishing house as a self published author who knows how to promote books, you can do your business plan on the back of a napkin. However, if you're going for a big launch, publicity, offset print runs, major start up expenses, you better write a business plan that allows for the contingency of competition. Just think about the 10,000 plus books Barnes & Noble publishes for their own stores. Keep in mind that the book industry can usually have several titles about famous people who pass away on the shelves within two weeks of their deaths, so you can't count on having an open field to run in for more than a few months after your big idea hits the shelves.
You don't need a degree in accounting or business administration to write up a business plan for a publishing house, but you can't wave your hands at the basics, like how much it costs to print the specific books you want to sell, what cover price your market will be willing to pay, and how much of that cover price you will end up in your bank account. You can't even start doing this basic math without knowing how many pages the books will be, whether they need to be softcover, hardcover, or both, and whether you'll be paying for design services or doing the whole thing in house. That might sound obvious, but the gentleman with the big idea from yesterday was far from being the first aspiring publisher I've spoken with who had thought that these were minor considerations that would work themselves out.
I'm fond of saying that the publishing business is all about marketing, and it's certainly true that books don't sell themselves. However, there's a caveat to the idea that anybody who can market books can start their own publishing house, and it's that you need a business plan in place that will allow you to make a profit on the books you sell. Otherwise, you'll be wasting your marketing genius on reducing your net value. I once wrote something to the effect that anybody can get customers for $20 bills if he's willing to sell them for $19, and it's as true in the publishing business as any other. Selling books is all about marketing but starting a publishing house is all about business. I'm always happy to respond to educated questions (don't ask me to do your homework), but write a business plan first and ask me about the parts you can't fill in. If you essentially ask me to write a business plan for you, I'll probably just end up convincing you that you're in the wrong business:-)
Starting Your Own Publishing House
Online Publishing and E-Publishing
So, who cares about putting labels on things? I do, it's impossible to have an intelligent discussion without a common vocabulary. I've engaged in both online publishing and e-publishing over the years, and though I try to use the two in a complimentary manner, many publishers go whole hog on one or the other. I've been publishing online since 1995, and I actually started with the hopes of building a readership for fiction I'd been writing. As it became clear that the fiction wasn't going to pay the bills, I started paying attention to the traffic my site was getting for some off-the-top-of-my-head technical support documents I'd written. For the next ten years I continued publishing online without directly earning a dime. Was it selfless altruism?
Nope, it was good marketing. I didn't like the online revenue models that existed at the time (mainly banner ads) and didn't want to junk up my site for pennies a day, so I stuck with conventional publishing as a trade author and as a self publisher, and used my online publishing to promote my books. It wasn't an exact match since I did quite a bit of writing about subjects I never authored a book about, but writing gets to be a habit and you never know what might develop. Since that time, contextual advertising programs such as Google Adsense have given publishers a civilized way to earn some money from online publishing, but it remains a secondary objective for my publishing business.
E-publishing held a serious attraction for me early on because it promised to level the field for small publishers. E-publishing almost entirely eliminates production and inventory costs, though my first CD burner, purchased back in the early 90's, cost me almost $2,000. Unfortunately, the entire e-publishing industry based on CD media was quickly overwhelmed with shovelware, CD's stuffed with whatever royalty free garbage the publisher could find. In the end, publishing on CD (excluding software) was largely given over to professional subscriptions and niche products.
A few years later, the Internet exploded out of the academic and military environments and into the home, and e-publishing was given a new life. I attended an e-book conference put on by the National Institute of Standards in 2000, certain that this would be the new direction for my publishing business. After three days in D.C., it became clear that the industry leaders were no closer to agreeing on standards than our political leaders were to agreeing on policy, and I put e-publishing on the back burner. I still remember that one of the big names at the conference was an e-publisher named "MightyWords" who focused on mid-length documents for professionals and businesses. A year or so later they were purchased by Barnes&Noble.com. A year or so after that, Barnes&Noble.com got out of the e-publishing business entirely, and even closed their e-book store.
I finally started e-publishing for profit last year when I signed up with Lightning Source to distribute e-book versions of my print books. Since that time, it's reliably added about $500 / month to the bottom line, and given overseas customers an inexpensive way to purchase my books. I haven't seen any year-over-year increase in my e-publishing sales, which take as an indication that the e-book industry is growing due to title growth, rather than unit growth per title.
Barnes and Noble Book Store vs Amazon Stocking
I've spent some time over the past month looking into comparisons between Barnes & Noble book stores and Amazon in terms of their core stocking. In the brick-and-mortar book store world, title stocking is also known as "modeling." To use it in a sentence, Barnes & Noble models two copies of title X across the chain, meaning the computerized ordering model tries to keep two copies in inventory every physical location. I've never heard modeling used in conjunction with Amazon's predictive ordering system, but they obviously strive to stock titles that are selling well for 24 hour shipping, and do a pretty good job at it.
What got me thinking about the differences between their title offerings is a discussion I've been involved with about the Long Tail phenomena on Amazon. It seems to me that before you can really get into a discussion about the tail on a beast, you have to decide what the beast is. For the sake of comparing apples with apples, it would be wonderful if Barnes & Noble book stores stocked a subset of Amazon's title catalog that corresponded with the top 100,000 or so books. Unfortunately, that's not the case. Stocking at Barnes & Noble book stores varies with the size of the store, between 60,000 and 200,000 titles, "of which 50,000 are common to all stores." However, we have no way of knowing what percentage of the 50,000 common titles are books published by Barnes & Noble themselves.
Now the situation is further complicated by the fact that Amazon does not stock many of the current titles published by Barnes & Noble in their store, and many of those titles that they do list were added by Marketplace Vendors. Some of these titles actually sell quite well in Barnes & Noble book stores, the "Step by Step" color illustrated computer series comes to mind. Even when some these books are made available on Amazon, they don't end up in the body of the beast due to limited availability.
On the other hand, there are many new titles stocked for 24 hour shipping and selling in the top 100,000 at Amazon which aren't stocked in Barnes & Noble book stores (and often never were). In addition, Amazon has a large but unquantified number of out-of-print books selling in the top 100,000, either older editions of new books, titles from failed publishers, or titles whose sales didn't justify a new print run for the publisher, and for which all the demand is now through Amazon.
This leaves us with two beasts, and I'm not really sure how different they are. Their bodies are certainly similar enough to be recognizable, especially the head (say the top 1,000 or so titles), but after that, some titles modeled in every Barnes & Noble book store only appear in the Long Tail at Amazon, if they catalog them at all. By the same token, some of the titles in the body of the beast at Amazon can't even be ordered by physical Barnes & Noble book stores because they are out-of-print. If I had a way of quantifying how big these non-overlapping inventories were, I could venture a comment on how important they are to the overall Long Tail picture, but aside from asserting that they are positive percentage values, I don't have a good method for estimating them.
Liability and Publisher Business Structure
Somebody asked a very good question about the business structure of my publishing company in a blog comment yesterday. I'm currently a sole proprietor, but I've spent quite a bit of time researching the options, including talking to multiple lawyers and accountants. In brief, as a self publisher, it doesn't appear that incorporating would limit the liability I already have as an author. On the business side, the immediate advantage of incorporating is to take a salary and limit self-employment taxes, but there are plenty of new expenses for maintaining the corporate structure that can cancel the savings.
Publisher liability is a hotly debated subject on discussion lists, with some publishers swearing by relatively expensive insurance and others operating on a wink and a nod. I'm no lawyer but it seems to me that the primary liability publishers face is lawsuits over intellectual property (like plagiarism) and libel. Publisher contracts always include language that tries to shift any expenses for plagiarism and slander onto the author, but it's the publisher who normally has the deeper pockets. If you are a self publisher, you are also the author, and a corporate structure is unlikely to help with liability protection, unless somebody is suing because one of your books fell off a delivery truck and put out their eye. In that case, you might be in the clear as the author, and only the publishing business would be liable. Another worry for publishers is errors and omissions, but it's debatable when errors and omissions are a liability such as libel or harmful recipes, as opposed to freedom of speech.
Many self publishers rush into an LLC or an S-Corp in the theory that they'll save a ton on their taxes. Unfortunately, they might spend that ton on legal and accounting help, not to mention unemployment and workers compensation insurance. You shouldn't ignore the time required to maintain a corporate entity. An LLC might have simple requirements, it depends on your state, but other forms of corporations require you to do things like keep minutes of meetings when you take decisions, even if you are having the meeting with yourself. If you don't keep up the paperwork, you may find that your corporate veil against personal liability has no value. On the other hand, a properly maintained corporation is probably easier to sell than a sole proprietorship if you decide to get out of the business, and may command a higher price.
How to Print Books One at a Time
Most books are still printed on offset presses, and even the smaller sheet-fed machines aren't economical for print runs under 500 or so copies. If you ask an offset printer to print one book for you, you'll just get laughed at. Most offset printers can't even determine ahead of time exactly how many books they'll print for an order less than a couple thousand copies, and the contract will be for a target number, plus or minus 5% or 10%. In my experience, you usually get the plus:-)
Ignoring the Ben Franklin method, there are really only two ways to print one book at a time. The first is to do it yourself on your computer printer or the local copy shop, and the second is to use print on demand. The final cost per copy will be higher than the cost from a large offset run, but cheaper than the cost from a short offset run, and it's the only way you can purchase books in quantities less than a hundred or so.
When I started out in publishing and was trying to figure out how to print books only when I had orders to fill, print on demand wasn't available to small publishers. I ended up making a master copy on my laser printer and "printing" copies on a copy machine at Staples. The quality wasn't great, the binding was crude, and it was also extremely labor intensive. My only distribution method was direct mail order, and I had problems processing money from overseas. Not a good solution at all.
Then I heard that Lightning Source was finally providing print on demand services to small publishers. I'd approached them at a trade show just a year or two earlier and was told they would only work with trade publishers who had a real backlist, which was probably as false then as it is now. They'll work with anybody who establishes their own publishing company. The main attraction of Lightning Source over using print on demand service from a local printer with a Xerox Docutech is access to distribution. Lightning Source doesn't only print one book at a time, they'll ship it Amazon, Barnes&Noble or Ingram when they get orders, with no action required on your part. In other words, they allow small publishers to run production and distribution in a completely hands-off manner, and they'll do so at a short discount.
Just because Lightning Source figured out how to print books one at a time in an economical manner doesn't mean that's all they do. I watch the Ingram ordering for my titles, and the average order size is in the tens of books. When I order books to for my direct mail operation, I order 25 at a time, primarily to amortize the shipping and handling cost over a reasonable number of books. I could print my books on offset in quantities over 1,000 and be confident in selling them, but then I'd have to warehouse and ship them, plus give a much larger discount to Amazon and Ingram. At my price points, on the same number of sales, I actually earn more by having Lightning Source do all my printing.
Publishing Business Valuation and Estate Planning
I discovered how to sell books through my website years ago, and it's remained my primary marketing method. As much as I like preaching about online marketing, the last thing I want is for self publishers to declare me a guru and work on their websites to the exclusion of every other marketing approach.
Everybody over the age of 5 knows that there's no "one right way" to do anything, yet self publishers often read a couple popular marketing books, jot down some of the most obvious suggestions, than focus all of their efforts on a pursuit of questionable value. Book reviews are a good example of that. I only went through the review process (pre-press copies, query letters, etc) with one book, and I got some reviews in really top publications. From a book marketing standpoint, it was a complete washout, for the simplest of all reasons. The title wasn't commercially viable, I had done no market research and the book had no audience.
Since then, I've made money on every title I've published, without ever sending a book out for formal review. What's more, I've seen the review process fail to produce sales over and over with self publisher friends, and not for lack of positive reviews. It's not that surprising when you think about it. I've never purchased a book based on a published review. It seems to me that the main marketing value of book reviews is to inform people that Title X has been released. If the reader doesn't already know the author of Title X, or hasn't been waiting on tender hooks for another book on the Title X subject, why would the review lead to a sale? The exception to this rule would be if you can get a review in a publication like the Library Journal, which basically exists as a catalog for librarians to order new titles from.
In the end, the way to be successful marketing your titles is to do the promotional activities that YOU are good at. The only thing I can really tell you about how to sell books with 100% certainty is that it takes persistence. I can't tell you how many self publishers I've heard from who flee at the first sign of battle, normally some bratty kid at a chain store saying, "We don't stock self published books." If you went into self publishing because you couldn't handle rejection (in the form of postcards from trade publishers), you went into it for the wrong reason.
How to Sell Books for Self Publishers
Everybody over the age of 5 knows that there's no "one right way" to do anything, yet self publishers often read a couple popular marketing books, jot down some of the most obvious suggestions, than focus all of their efforts on a pursuit of questionable value. Book reviews are a good example of that. I only went through the review process (pre-press copies, query letters, etc) with one book, and I got some reviews in really top publications. From a book marketing standpoint, it was a complete washout, for the simplest of all reasons. The title wasn't commercially viable, I had done no market research and the book had no audience.
Since then, I've made money on every title I've published, without ever sending a book out for formal review. What's more, I've seen the review process fail to produce sales over and over with self publisher friends, and not for lack of positive reviews. It's not that surprising when you think about it. I've never purchased a book based on a published review. It seems to me that the main marketing value of book reviews is to inform people that Title X has been released. If the reader doesn't already know the author of Title X, or hasn't been waiting on tender hooks for another book on the Title X subject, why would the review lead to a sale? The exception to this rule would be if you can get a review in a publication like the Library Journal, which basically exists as a catalog for librarians to order new titles from.
In the end, the way to be successful marketing your titles is to do the promotional activities that YOU are good at. The only thing I can really tell you about how to sell books with 100% certainty is that it takes persistence. I can't tell you how many self publishers I've heard from who flee at the first sign of battle, normally some bratty kid at a chain store saying, "We don't stock self published books." If you went into self publishing because you couldn't handle rejection (in the form of postcards from trade publishers), you went into it for the wrong reason.
Does PublishAmerica really Publish America?
That PublishAmerica is a controversial company is obvious from the number of pages it brings up on a Google News search. It seems that every week somebody writes an article damning PublishAmerica to hell for ruining the dreams of writers. It's easy for a journalist to take an e-mail from a broken-hearted author and spin it into a feature story, but does the coin have two sides? The complaints range from the contract terms to distribution issues, but the bottom line always seems to be that authors feel like they were sold a bill of goods. I've heard from a number of current and past PublishAmerica authors, and their opinions were mixed, essentially depending on what they expected going in. So does PublishAmerica really publish America? As an ex-American president might have put it, that depends on what the word "publish" means.
On one side of the coin, we have pundits with little or no concept of how the trade publishing world works, writing about how PublishAmerica differs from a "real" trade publisher. They complain that PublishAmerica will publish any old garbage and then they complain that the prices of the books are too high. Reminds me of the old Borscht Belt joke where one old lady complains, "The food here is awful" and her friend responds, "Yes, and the portions are too small." They complain that PublishAmerica books aren't stocked in stores, except Amazon. Anybody in the industry can tell you that most books that get published aren't stocked in stores, and some of them have worse Amazon availability than PublishAmerica titles. They argue that the editing and cover art are inferior, and that the print on demand technology is the mark of death. PublishAmerica may actually put more money and effort into title production than some of the subsidy publishers they compete with, and people who knock print on demand technology frequently don't know what they are talking about. Print on demand is used by everybody from the top academic publishers and small publishers for frontlist books to the large trades for some backlist titles.
On the other side of the coin we have the one key factor that, in my mind, excludes PublishAmerica from the ranks of publishers who could be said to truly "publish" books. PublishAmerica has no real marketing. Selling books is what the publishing business is all about, and to sell books to the general public, you need to market them. Instead, PublishAmerica takes the fabled military planners approach of running a bunch of books up the flag pole and waiting to see if anybody salutes. For one in a thousand titles, that approach may actually work, though I suspect there's a market savvy author behind each success. I just did a quick search on Amazon, and the top 5 PublishAmerica books this morning were:
"Empowering Women to Power Network" by Ponn M. Sabra
"The Fairy Chronicles Book One" by J.H. Sweet
"To Love a Vampire" by Jody Ofen
"Zen and the Art of Public School Teaching" by John Perricone
"Up the Creek with a Paddle" by Mary Anne Boyle Bradley
Apart from doing moderately well at Amazon, I checked all of their sales at Ingram this year, and all except the vampire book (published two months ago) had sold over 100 copies. The "Fairy Chronicles" was leading the pack with 335 year-to-date sales. There are at least a hundred thousand trade published books in print that won't move that many books this year. While there are over 10,000 PublishAmerica books available through Amazon that aren't doing so well, it's important to point out that it's not impossible to score a small success as a PublishAmerica author.
My gut feeling is that the individuals who thought up PublishAmerica actually thought that they would become the heroes of the publishing industry, rather than the goats. Unfortunately, they are learning along with their authors that books very rarely (if ever) sell themselves. Since they are known for presenting themselves to potential authors as a traditional publisher (ie, non-subsidy), they are setting up those authors for a big disappointment. Marketing isn't a small part of the publishing business, it's the main part, and it's the part that PublishAmerica lacks. As to whether an author is better off choosing PublishAmerica or a subsidy press, it depends on that author's expectations. If the author just wants to see the book in print and have it available on Amazon and for special orders through bookstores, PublishAmerica is certainly the cheapest route, they may even pay a dollar advance. If the author is hoping to win the lottery and come to the notice of a major trade, they're better off paying a subsidy publisher with a reasonable contract and a reputation for helping authors generate sales, like Booklocker. Of course, if the author wants to make money outside the trades, the only way to go is true self publishing.
Bookstore Sales and Publisher Dreams
The US Census Bureau recently released the first six months of 2005 unadjusted data for bookstores. Sales shown in millions (M) of dollars:
January - $1,969 M
February - $1,027 M
March - $1,038 M
April - $940 M
May - $1,055 M
June $1,084 M
Year to Date $7,113 M
Same period last year $7,395 M
Sales in 2004 are actually running behind 2005 by about 4%, despite higher prices. This means that overall number of books sold dropped more than 4%. The census isn’t perfect (these numbers are for brick-and-mortar bookstores only) but I wouldn’t ignore them.
Industry organizations, on the other hand, can produce truly bizarre statistics. The PMA (Publishers Marketing Association) released a study titled "Rest of Us 2003" which concluded that small and independent publishers were selling between $29 and $34 Billion dollars. My own calculation indicated that this total was off by an order of magnitude, about ten times higher than reality. How could they get it so wrong?
The basic methodology was to passively survey PMA members (active publishers willing to pay dues to an industry organization) and extrapolate the whole small publisher universe from those who responded to the survey. Could it be that a self-selecting group of successful publishers responded? Their method of extrapolation from "active" Bowker titles was terribly unsound. Besides, what percentage of small publishers EVER takes their titles out of print, rendering the records inactive?
It would not surprise me a bit if 90% or more of the "active" publishers reported by Bowker have such low sales that they don't even report taxes as publishers. The IRS, by the way, estimated book publisher revenue in 2001 (including the big trades) at around $23 billion. The BISG put all publisher sales at $26 billion in 2002. Are tens of thousands of small publishers each selling tens of thousands of books all cheating on their taxes? That’s what the math would require.
The extrapolation they made is similar to interviewing frequent fliers (the publishing parallel is PMA members) about their travel habits, than trying to extrapolate the number of international miles Americans fly each year by multiplying the survey average by the number of passports issued by the government in the past 10 years. There is simply no rational reason using the total number of "active" ISBN block holders as the basis for any estimate.
Just because most small publishers aren’t successful selling their books through traditional outlets doesn't mean that non-traditional outlets are capable of generating tens of billions in sales; if they did, they would be called traditional. I corresponded with the author of the survey, who acknowledged the methodology could be flawed, but felt it was worth keeping in order to compare apples-with-apples from a previous survey. Dreams are cheap, yet while it's easier for a publisher to have dreams than have sales, it's not a business model I'd want to be stuck with.
How To Publish Online with Blogger Software
I should probably write more about how to publish online in this blog, since publishing on the Internet is what launched my business. It's also gotten a lot easier to publish online in the past couple years, thanks to blogging. This post was written with the free Blogger tool (the company belongs to Google) and it's as simple as writing in a word processor. I didn't design the graphics or the layout that you would see if you were reading this online, they are part of a standard template I chose. I just added a few links to major pages on my publishing site by editing that template one time, but if you're just starting out, you won't need to know how to do that since you won't have an existing site.
The first rule for online publishing is to own your own domain. It's not a question of legitimacy, a blog is a blog is a, you get the point. It's so when people link to your online writings, the links point at a domain that you can control. If you start publishing online hosting your blog at the free Blogspot rather than on your own domain, you'll effectively lose any links you build up when you move to your own domain, or change blogging software. The links are critical to establishing the value of your publishing effort in the eyes of the search engine, from which you're trying to get visitors.
The next rule for publishing online is to write what you know you're planning on publishing books about. This doesn't mean you can't make blog posts about related subjects, in fact, I encourage it. However, if you're planning on publishing books about business management and your passion is college basketball, don't kid yourself that posting about basketball every day is going to contribute much to the future of your book business. Today I'm writing about online publishing in support of my book about print on demand self publishing, and the two happen to be an excellent match. I won't even consider publishing a book on paper unless I'm getting at least a hundred visitors a day to related writings on my website.
I'm an absolute advocate of publishing online before publishing on paper. There's no more cost effective way to get feedback from your potential book buying audience about what they want to see in a book. If you've already published books and you're just looking into how to publish online now, you're better off starting with a full website where you can post multiple excerpts from your books to attract visitors and close the sale for you. If you're concerned about people ripping off your efforts, see my article about online copyright issues.
To get started with publishing online, just go to the Blogger site, do their free sign-up, chose a look for your site (a template, which you can always change later) and choose "FTP" for the posting option. Blogger will then use FTP to upload your blog posts to the domain you own (for which you're paying a monthly fee to a host), giving the main page any file name you choose. If it's the first page you're adding to the domain, name it "index.htm" If the site has been around a while, it's best to give it the name of an existing page you can do without, which will integrate the whole blog into your current site navigation. The Blogger software handles archiving and generating a unique HTML page from every post. Stay tuned, and I'll do a post about editing templates in the future.
Printing Offset vs Print on Demand Self Publishing
They say the Devil is in the details, and for once, they happen to be right. At first glance, almost everything about offset printing looks superior to print on demand; after all, everybody knows that print on demand printing is essentially giant laser printers cranking out page after page on a huge roll, with no stops for tweaking. The experts on self publishing lists say that printing quality is critical to success and dispose of print on demand without a backwards glance. However, self publishing isn't just about printing books, it's a business like any other, where cash flow management, inventory, shipping, distribution and most importantly marketing, all compete with printing technology on the priorities list. A quick review of the pros and cons of these sometimes competing and sometimes complimentary printing methodologies:
Printing Offset
High quality from a good printer
Low unit cost if printing in large quantity - F.O.B.
Tremendous flexibility in cut size, paper weight and color
High storage cost
High distribution cost
High initial investment
High prepress cost, errors extremely expensive
Print on Demand
Low quality relative to offset printing
Uniform unit cost at all quantities
Limited flexibility in cut size and paper
No storage cost
No distribution cost with Lightning Source, Replica or BookSurge
Low initial investment
Low prepress cost, errors easily corrected
From a business perspective, the choice of which printing technology to use in your publishing business depends entirely on what you're trying to accomplish and what you can afford. For example, if you're publishing a full color cook book, there's just no way you can do it with print on demand at this point. The cost is too high and the quality isn't there. Although you'll have to make a big initial investment with offset printing, the amount of prepress work and the cost of preparing a full color cookbook make the big printing investment a reasonable gamble. The cookbook will get a high cover price, you'll give up 60% to 70% of that to get it distributed, but that's the business model.
On the other hand, for a novel or a nonfiction book with limited black and white illustrations, print on demand quality is good enough. Print on demand printing is actually cheaper than a short run of offset (less than 500 or 1000 copies) in most cases, and now we get to the devil in the details. One of the biggest challenges for small publishers is getting their books into distribution, so they'll be available for ordering through bookstores, both online and on Main Street. Self publishing with print on demand using either Lightning Source or Replica means you can get your books stocked by Amazon and available to bookstores through stocking at Ingram or Baker and Taylor, and at a short discount to boot!
As I describe in my case study for a print on demand book printed by Lightning Source, the short discount more than offsets the per unit savings we could have achieved by printing a large quantity of books on an offset press. Plus, you can get started out in self publishing with an initial investment in the low four figures, rather than the low five figures. Save your money and effort for editing, production and marketing, and you'll save your back as well. When I started out self publishing on offset and those first 1,000 books showed up in
Help from Publishing Experts Online
There are probably a thousand online discussion groups dedicated to self publishers around the world, and I must have come across a dozen unaffiliated groups with hundreds of members. By "unaffiliated" I mean groups that you can join online, without being a member of a traditional, dues paying organization with a magazine and an alleged bargain on health insurance. I started one such list myself a few years back for print on demand publishers which is currently around 500 members. There are also some broader lists that include small trades, but I've never seen a post from a publisher whose name I recognized on any of the general purpose lists.
If you join a half dozen lists, you'll quickly cotton to the fact that the same experts appear on multiple lists offering their help with publishing questions ranging from book design to marketing and legal issues. Their e-mail signature contains the equivalent of a business card, letting you how to contact them to retain their professional services. I don't have any objection to professionals plying their trade on discussion lists, as long as they give real help and not an endless series of teasers. Well, actually I do have one other objection, though it shouldn't really be required in a caveat emptor environment. If you ask a simple question and you get an answer that implies you NEED expert help, take it with a shaker of salt.
I've made up a little checklist to help you quickly determine when publishing advice you are getting is suspect.
1) Any advice that tells you the tools (software) you are using will mark you as an amateur. It's like saying the best musician in the room is the one with the most expensive instrument.
2) Help that doesn't include a personal experience. Some people hate anecdotes, but if somebody tells you the XYZ mailing list is the way to go without telling you exactly how many books it sold for them, they don't know any more about it than you do.
3) "I've got twenty years (or more) of experience so I'm right." The business world in general and the publishing world in particular is full of dinosaurs. Ten years ago Amazon didn't exist, now they sell as many books as the big chains, which in turn, drove the independent bookstores under the ground. Don't be impressed by a ten page resume, find out what they've done lately. With that big head start, it better be pretty impressive.
4) If somebody is offering you help self publishing, do their own books sell? Don't just ask them, check Amazon and Ingram. The discussion lists are cluttered with experts who make their living selling publishing help as opposed to selling books.
My bottom line advice is that even free help can cost you if it sends you off in the wrong direction, so trust your gut and don't change what you're doing unless the logic strikes you as sound. If you become convinced that you need professional help, get recent references from the expert and follow up! Call the publishers they've worked with and don't be shy about asking what it cost them. If it was a design job, buy the books and make sure you like the way they came out. If the job was book promotion, check out their sales and make sure you find out exactly what the expert did for them, because it may not be applicable to your title. Don't forget the old saw that applies to marketers as well as carpenters - "When the only tool you have is a hammer, everything looks like a nail."
Presenting Yourself as a Professional Writer
This is another one of those posts that has to do less with self publishing than with the questions I get by e-mail. What really amazes me is how some of the most earnest writers I hear from insist on shooting themselves in the foot, even before putting it in their mouth. A form of auto-vampirism? My favorite of the "I found your e-mail address on a website that has something to do with publishing so will you publish my book?" form ran something like:
My mother is read my story and she really liked it. She's going to make my father read it, and then she wants me to find a publisher. Will you publish it?
The gist of my answer was:
Stop, don't run through all of the potential publisher e-mail addresses before learning how to pitch a book in a professional manner. I'm afraid nobody is going to be impressed by your mother's enthusiasm, even if your father agrees with her. See my article on proposing a book.
Another way to tip-off acquisitions editors, reviewers and media contacts that you aren't a professional is to lead off by telling them how stupid their guidelines are:
I know you said to send a query letter first and that you only publish/review serious medical texts, but you haven't seen how good my book is and you would probably have turned me down since I'm not famous so I'm just sending it anyway.
Following up to tell them how stupid they are for not accepting your unique proposal helps close that door forever:
I'm on staff at the local hospital and I think I know a good medical book when I see one. You are small-minded and ignorant for not accepting the existence of vampires, so don't come running to me if one bites you.
Frankly, I'm always a bit lost when it comes to communicating with a person who isn't in touch with reality, whatever their professional qualifications. There will always be room for a number of eccentrics in publishing, whose eccentricities are part and parcel of their attraction, but it's a tough role to break in with.
iUniverse Star Program and Barnes&Noble
A quick disclaimer before we begin. If you choose to pay iUniverse to publish your book, they are your publisher. Some people think of this as self publishing, and while I don't agree, I'm not in a position to dictate language usage any more than you are, I frequently recommend subsidy publishers to authors who contact me about self publishing but who aren't interested in the business.
Recent numbers released by iUniverse testify to the relatively low sales of their average title, and you can easily see this for yourself on Amazon. One of the headline numbers to come out of the Publishers Weekly article was that only 14 iUniverse titles were stocked in Barnes & Noble stores in
A quick search on Amazon shows that as of today, 112 titles are included in the iUniverse Star program, out of the 14,000 plus iUniverse titles currently listed by Amazon. If you've read elsewhere (like above) that iUniverse has published tens of thousands of titles and are wondering what happened to the rest, it's because iUniverse's cheapest package doesn't included distribution or a listing on Amazon. Getting into the star program requires two milestones. First, the title must receive iUniverse "Editor's choice" and "Reader's choice" designations. Second, the title must sell at least 500 copies, and at least 50% of those must be through retail channels (as opposed to the author just ordering 500 copies). Even if the author games the system by spending many thousands of dollars to buy 500 books through retail channels, it doesn't guarantee entry into the Star program. Even if the title gets into the Star program, it doesn't guarantee stocking in the Barnes & Noble chain - that decision is up to the chain buyers.
The irony is this. If you are good enough at book promotion to sell 500 plus copies of your book, you'd be making much more money as a self publisher, going direct with Lightning Source. Don't get caught up in the idea that iUniverse is a big name publisher and you're just "John Doe Publishing." In the publishing world, everybody knows iUniverse is a subsidy publisher, which makes it harder to market those books and get reviews. As a self publisher with your own press name, while nobody has ever heard of you, they haven't heard anything bad.
Ebook Server Software - Amazon Mobipocket, Adobe Content Server and Microsoft
Authors new to self publishing sometimes think that publishing e-books requires spending thousands of dollars on software for generating files, adding DRM (Digital Rights Management) and serving the files to customers. You can go that route if you want to, or use one of the work arounds, like creating PDF's with password protection and sending the password when you receive payment. To me, that would be like selling an audio book, where the sale is final when you read it to the customer over the phone - at their convenience.
The whole market for e-book server products and DRM turned out to be much smaller than the major players expected. Adobe once looked poised to take over the market, with their strong Acrobat product line (they invented the PDF after all), their acquisition of Glassbook, and their Content Server product line. Suddenly, last November, Adobe announced they were discontinuing sales of Adobe Content Server. Current customers can continue using it, and their Adobe's Digital Rights Management Activator Service will remain active through December 31, 2006. The general assumption is that they are abandoning the e-book server product because there aren't enough customers to justify supporting it.
Microsoft has their own e-book sever and digital rights management system for the Microsoft Reader e-book format, the Microsoft Digital Assets Server or DAS. Heavily promoted just a few years ago, the digital assets server was positioned as a back office product for big publishers or aggregators. The list of Digital Rights Solutions Providers on Microsoft's website consists of five vendors world wide, two in the U.S., three in Europe. One of the U.S. providers is Lightning Source, the company that serves my e-books. In fact, according to an email I received from Amazon a few months ago, Lightning Source was serving all of the e-books sold on Amazon at that time.
Around the same time I got that e-mail, Amazon acquired Mobipocket, a French company that specialized in e-books for mobile devices, with both reader and server software. The funny thing is that Google can't turn up a single mention of the Mobipocket acquisition on the Amazon website, and I went through all the press releases this year without finding a mention. If it wasn't for the Amazon branding that appeared on the Mobipocket website, I'd think I imagined the whole thing. The acquisition took place around the same time as Amazon purchased Booksurge.
There are a number of third party vendors of e-book servers and DRM software, but it's an unfortunate reality that when it comes to the publishing industry, dealing with the small
players is risky. The economics of publishing are sufficiently tough when you can access the whole market. If you start restricting your customer base by supplying products that require special downloads (emotional commitment) on the part of the customer, it's going to be a tough row to hoe. The easiest way for publishers in the U.S. to make their e-books available to a wide audience is to get them on Amazon, which for the moment means dealing with either Amazon or Lightning Source. Barne&Noble.com actually abandoned the e-book market a couple years ago, after spending a pretty good sum on MightyWords, a leading e-book publisher at the turn of the century:-)
Graphic Novels and Self Publishing Comics
I recently became interested in the subject of self publishing comic books when I noticed that some authors have been using print on demand to publish graphic novels. Since print on demand is a toner printing process (think laser printer) it's well suited to black and white line art, as long as the the density (amount on lines on the page) isn't too high. I put a half dozen four panel comics in the first book I did with Lightning Source, and they came out OK even though Lightning Source uses creme paper for the smaller book sizes. The next book I did had 17 large line drawings in it (flowcharts) which came out great on the
Comic books are traditionally published in full color on offset presses. This presents several challenges to self publishing comic books, since color print on demand can't begin to compete with offset on price, and the heavy book covers aren't normal for comics. I did some research, the best links-to-links site I found for self publishing comics was David Law's Creating Comics. It quickly became apparent that the more things change, the more they stay the same. As with regular book publishing, the main challenges for comic book publishers are distribution and marketing. A few mammoth distributors, like Diamond, are seen as critical to making serious money in the game. Marketing is marketing, and I've written quite a bit on the subject of Internet book marketing that's applicable to bringing visitors to a comics site as well.
The real question, if you want to take advantage of the print on demand publishing model, is are you willing to try working with low line density graphic novels, so you can use a combined printing/distributing solution like Lightning Source. If your graphic novel can be printed by them, it means short discount distribution through Ingram and Amazon, and you can actually see significant income from a relatively low sales volume, as you can earn over half the cover price on every sale. I have seen some graphic novels published through the big subsidy presses, like iUniverse, Xlibris and AuthorHouse, all of whom use Lightning Source for their printing. If you can do your own marketing, cut out the middleman and go direct as nobody else is going to do it for you in any case.
Publishing a Book isn't a Race - Printing a Book isn't the Finish Line
Most of the self publishers who e-mail me can't wait to get their book in print. The process has turned into a race for them, and printing the book is the finish line. Part of the hurry is driven by pre-release publicity. The standard publishing model depends on pre-release orders to determine the size of the print run, and once the publicity is in place, the book better follow close on its heels. Well, it turns out that very few self publishers are capable of creating that sort of buzz, and it only applies to the offset press model. If you're printing your book on demand, there's no need to worry about the size of the print run, the only issue is getting the title to show as available for ordering distributor databases and online catalogs.
I no longer do any special pre-release publicity for books, though I may accept pre-release orders on my website if I'm getting regular queries "When is the book coming out?" Part of the reason is I'm not targeting bookstore stocking for my titles (short discount) so it's not required, but taking the pressure off is an equal consideration. If you're successful in getting pre-publication publicity, it imposes an artificial deadline on the publication process because you've told all these people when the book will be available. In other words, it turns publishing a book into a race, and racing is all about burning up your resources at the maximum rate in order to finish in the shortest possible time.
It's clear then that I'm not a stress junky, maybe you are, but there's another reason that squandering money and losing sleep to get a book out quickly isn't worth it. Printing a book isn't the finish line, in fact, it's barely past the starting line. The end of the publication process comes (hopefully) years and years later, when you declare the book out-of-print. In the interim, between printing and out-of-printing, your job is to market and sell books. The first milestone of note in the process is breaking even, when the book earns enough money to cover the investment needed to publish it.
By not getting caught up in a race to publish the book, you'll probably reach break even faster, because you won't have thrown away all your money on pre-publication publicity, costly rush work and the inevitable mistakes that come through hurrying. I had to throw out 1,000 dust jackets once at a cost of $900, and that was just one of the mistakes on that book. If you have a mechanism in place for marketing and selling your books, there's plenty of time to put it in motion once the book is available. If you don't know, and I mean really know, where your sales are going to come from, you may want to spend even more time preparing the ground before printing the book.
Music Self Publishing on CD and Amazon Audio Books
I'm not a musician and I've never written a song, much less published one. However, if I were to wake up tomorrow with a song in my heart and a microphone in my hand, I'd record it and sell it on Amazon, because I'm in the publishing business and that's what publishers do. The same Amazon Advantage program that is available to small and self publishers for books and e-books can also be used to sell your CD's through Amazon.
The cost to join the Advantage program is only $29.95/year, which will enable you to sell physical CD's through Amazon's Music Store. In addition, you can upload MP3 samples for free download to promote sales of your CD. I call it "Listen Inside," they call it "Listen to Samples," which isn't very catchy for a music program. The main challenge for self publishing your music on CD is getting a UPC code. UPC, or Universal Product Code, is the scannable barcode used for uniquely identifying every product under the sun, except for books, which use the Bookland coding of the ISBN. Even if your music CD has an ISBN number, you'll still have to get a UPC code to work with Amazon. It also has to be printed on the cover for your CD, or applied as a stick on label.
Once you sign up with Amazon, they'll make an initial stocking order of your CD, probably two copies, and you won't hear from them again until they sell one. They have a predictive stocking program that tries to make sure that your CD remains in stock for 24 hour shipping, but it takes a while for them to ramp up to meet demand, because they don't want to get stuck playing musical chairs with inventory. The publisher discount (the percentage they take from you) is 55%, which means for a $10.00 CD, you'll get paid $4.50. It's a better deal than any artist in the music industry gets.
What's really interesting to me, as a book publisher, is that Amazon is now soliciting publishers for a new audio book program. I e-mailed them to find out more about it, and it looks like Amazon will be selling downloadable digital audio books, which may be the real reason they purchased BookSurge, for their large file I.T. infrastructure. They don't have a contract ready yet, but they are willing to start accepting files for processing on either CD or USB 2.0 drives. Odd as this may sound, it's a real improvement over the start of the Search Inside program when small publishers couldn't participate in the first round and ended up many months behind the large trades. For music publishers, the question is, will they start selling large enough files to consider selling downloadable CD's? The current e-book system handles fairly large files, but nothing near the 680 MB that a full music CD takes in uncompressed stereo with 44.1 KHz sampling.
Tax Deductions for Travel Book Author
This is the continuation of a previous post that looked at some of the basic rules for writer write-offs. One of the main issues the IRS looks at when it comes to business travel of any type is just how much of the trip was for business purposes. If the trip is defined as "entirely business related" you can deduct all of your travel expenses. If the trip was "primarily for business", you can deduct the business-related travel expenses, which includes the outlay for getting to the business destination. Based on the examples given in Publication 463, the deductions they allow in partial business circumstances seem both fair and logical.
On the other hand, if the trip was "primarily for personal reasons" you can't deduct any of the travel expenses, just the business specific expenses when you reach the location. I read this to mean if you go to your sister's wedding in Monaco and take a taxi to the casino so you can (maybe) use it in a scene for a novel you're thinking of writing, you might get away with deducting the cab fare. Keep in mind I'm not a tax professional and that isn't official advice. Your losses at the Baccarat table are your own.
The rules for business travel outside the U.S. are more detailed than the rules for travel inside the U.S., maybe because the IRS figures they aren't getting any benefit from the money you spend while you're gone. They list four exceptions for being able to declare a trip as "entirely for business" and deduct all of the expenses even if you don't spend all of your time doing business related stuff. The first exception is if you have no real control over the trip, which is pretty unlikely if you are an author writing a travel book to self publish. The second exception is if you spend less than a week outside the U.S. which is equally unlikely if you're writing a travel book. The third exception which allows you to deduct all of your travel expenses (and this is the biggee) is if you spend "less than 25% of your time on personal activities." The fourth exception is if (paraphrase) you can prove that it wasn't an excuse for a vacation, even if you were in control of the planning. I'd hate to get stuck in an argument with the IRS over the fourth exception - "I swear on a stack of Bibles I didn't have a good time!"
Further complicating the situation for third exception (I hope) and for travel that is "primarily for business" is that the IRS allows you to count weekends as business days, even if you spend them on non-business activities, providing you had to be there on both Friday and Monday for business. Does this mean that an author who goes to a foreign country and writes a travel book can deduct all of their business expenses as long as they work on the book every weekday? I really don't know, without weekends you'd fail the 25% rule. The IRS doesn't require you to sit and keep a running log of your activity, once a week is considered timely, but the closer to the expense you are deducting, the better. Of course, you need to save all receipts, cancelled checks, etc.
I'm going to try to contact an IRS specialist to talk about this, and I'm sure I'll be making another post on the subject.
Book Sales Studies by Academics and Publishing Industry Groups
I read a lot about book sales, I've subscribed to various industry publications for both publishers and authors, and I never cease to be amazed at the shoddy quality of research that passes for "data." Unfortunately, the work I've seen from academics never appeared to be much better, though it's a lot more difficult to prove that since they use a lot of math I haven't seen since graduate school. My recent discussions with Chris Anderson about the assumptions that went into his now famous Long Tail article have led me to look into a few of the sources he originally relied on.
The source he quotes as the best analysis of Amazon sales to date was published at the M.I.T. Center for Ebusiness, certainly a reputable outfit. However, when I looked for a checksum in their article, all I could find was their estimated sales rate of 99.4 million titles per year being sold by Amazon. To confirm it, they used the estimated 2.5 billion sales for 2001 published by the B.I.S.G, of which 6% was reported as online, and Amazon was given a 70% share. All that math works out to 105 million sales for Amazon, or well within 10%. The problem is that I'm familiar with B.I.S.G. studies and I've never been impressed. As my own checksum, I looked at Amazon's total US media sales for 2001, which includes Books, CD's, DVDs/Video, which was $1.688 billion. Then I adjusted it with their 2000 number for the proportion of non-books in the number, which leaves 1.17 billion for books. This is probably high, since the non-book sales were the faster growth segment at this time. This yields an average Amazon selling price of $11.77 per book. The same M.I.T. study gives the average selling price of a book at Amazon as being between $29 and $41, depending on the popularity. Somehow, this checksum is off by a factor of 3.
I don't claim to have the monopoly of insight into Amazon, all of the analysis I've done over the years is based on estimates and hand drawn curves. The one area where I do feel I have all of the academic observers beat silly is patience. I've been visiting daily since the late 90's, and as many as a dozen times a day when I'm watching sales ranks. I've observed peculiarities in their system that could only be detected by tracking a title for years, like the hysteresis effect in their old ranking system that I'm sure was unintentional. I don't dress my results up in Greek notation and footnotes, I just do my best to call it like I see it. Maybe the fact that I have no thesis to prove helps me keep an open mind, but the whole point of this rant was to say, don't believe what you read about book sales just because it's in the New York Times or The Economist. They can check facts from morning to night, but in the end, they're only as good as their sources.
Seasonality in Book Sales
I've been motivated by a current correspondence about Long Tail estimates for Amazon to look again at the seasonality of book sales. The best numbers I've found on the subject come from the US Census Bureau. Their report on 2004 Bookstore Sales by month, including college and specialty bookstores, yielded the following:
Jan - $2,070 billion
Feb - $1,072 billion
Mar - $1,036 billion
Apr - $0.987 billion
May - $1,071 billion
Jun - $1,159 billion
Jul - $1,128 billion
Aug - $2,043 billion
Sep - $1,493 billion
Oct - $1,032 billion
Nov - $1,044 billion
Dec - $2,089 billion
Total - $16,224 billion
The main drivers of seasonality are school textbooks and Christmas gifts. I used these ratios to adjust my Amazon Sales Rank graph, but the dynamics at Amazon are likely very different than at the brick-and-mortar stores, so I took a look at the last 4 quarters of Amazon North America media sales.
Apr to Jun 2005 - $632 Million
Jan to Mar 2005 - $699 Million
Oct to Dec 2004 - $751 Million
Jul to Sep 2004 - $502 Million
Just to see the rations, I grouped the store sales from the Census Bureau into similar quarters:
Apr to Jun 2004 - $3.22 Billion
Jan to Mar 2004 - $4.18 Billion
Oct to Dec 2004 - $4.17 Million
Jul to Sep 2004 - $4.66 Million
So what stands out from this comparison, allowing for the year to year difference? The best quarter of the year for the group including college bookstores is the Jul to Sep quarter, which is Amazon's worst quarter by far. Amazon's best quarter, Christmas, is only middle of the road for the group with the college bookstores. What I've quickly learned is that I've got to find another way to adjust Amazon sales for seasonality, because these groups just aren't apples and apples!
Tax Write-Offs for Travel Writers
To be traveling away from home, you need to have a home. For a sole proprietor, your tax home is your main place of business. If you're a travel bum, you're in trouble because you may be defined as a "transient." Transients cannot claim travel expenses, period. However, you may be able to use the home where you regularly live as your tax home, even if you have no main place of business or work. The IRS has a list of three factors used to determine your tax home if you have no main place of work. Match all three, you're gold. Two out of three is a maybe. One out of three and you may as well be a transient.
The IRS also differentiates between temporary vs. indefinite assignments. "An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than one year, whether or not it actually lasts more than one year." Not surprisingly, if your trip is "indefinite" you can't deduct travel expenses.
When it comes to meals, you're expected to live somewhat normally. "You cannot deduct expenses for meals that are lavish or extravagant. An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts." Somehow, I read that paragraph and I still don't know what "lavish or extravagant" means. In any case, you can only deduct 50% of meal expenses. On the whole, I'd rather do a per diem if possible.
The Long Tail of Amazon Gets Shorter:-)
Last week I finally read the now famous article about the "Long Tail" phenomena at many Internet retailers by Chris Anderson, the editor of Wired Magazine. The article and the blog that Chris started for a book he'll be writing on the subject are well worth reading, but his initial assertion that the long tail accounted for over 50% of Amazon sales immediately struck me as wrong, and I've been working on the question from a couple different directions. A warning for authors and self publishers reading this blog. Long tail effects are beneficial to large retailers, such as Amazon, but they do nothing for the bottom line of authors or publishers. By definition, only the retailer makes a living on the long tail.
Several factors complicate the analysis of Amazon sales, but the primary factor is that the data is confidential. What Amazon does make public in its annual reports is the total media sales for North America (Books, DVDs, CDs) and a sales ranking of any product that has sold on Amazon is available on their site. Under the old sales ranking system which was in force through October of 2004, the rank expressed a combination of sales momentum and total sales. As of November, the new system is almost entirely based on recent sales, with the main effect of sales history being to slow the decay rate of the ranking after the first 24 hours without a sale.
My analysis so far has led me to the conclusion that any discussion of Long Tail phenomena is dependent not only on the amount of time you look at, but on where you declare the tail as beginning. In his initial analysis, Chris used an inventory of 130,000 as the "body" for Amazon, and all slower selling titles as the tail. The 130,000 represented a typical bricks and mortar superstore inventory. However, the titles included in that inventory change throughout the year, not to mention from year to year. While I'm working on an all-time historical book sales analysis for Amazon, it wouldn't make sense to contrast an up-to-date superstore inventory with eight or nine years of Amazon sales.
This led me to do a short term analysis based on a single day's sales at Amazon. The conclusion I reached using real time data was that on any given day, the "body" sells 189,000 books, and the long tail 70,000, or about 27% for the long tail, using the 130,000 break point. If we moved the break point a little closer to the 200,000 mark, or just 5% of Amazon's active inventory, the long tail would shrink even further. I'm not sure it's even arguable that Amazon benefits more from Long Tail sales due to the profusion of used books, because used book availability is excellent through Amazon's system.
I'm working obsessively on these questions and hope to post an update later this week. I did just come across a breakdown of Amazon's book sales vs. music and DVD/video, something I may actually have known from five years ago when I was first plotting Amazon ranks. In the 4th Q of 2000, with a couple years of selling both music and video under their belts, the ratio was 2.23:1 in favor of books revenue - for every $2.23 they took in selling books, they took in $1.00 selling music and DVD's.