Stagflation Proof Your Publishing Business

I generally keep my serious blog (this) separate from my rantings about the economy and inflation, but economic cycles are a part of life for publishers and authors as much as other businesses. The ogre overhanging the economy that presents the scariest scenario for Wall Street and middle America alike is stagflation. Stagflation is inflation without corresponding economic growth, meaning a genuine contraction is economic activity and the value of money. Your publishing business may be vulnerable to both unwelcome visitors, loss of sales and diminution of the asset base that allows you to live and work as a self publisher.

The solution to the first problem, the loss of sales, is obvious, if you are a larger publisher or have the flexibility as a self publisher to work in different fields. The way to build sales during an economic downturn is to publish books that do well when the economy does poorly. For the nonfiction publisher, it's an excellent time to produce doom-and-gloom books about the stock market, the housing bubble and the soon to be broke entitlement programs. But looking beyond the obvious, it's also a good time to get going on those titles about living inexpensively, fixing credit problems, getting out of debt and dealing with bill collectors. It's a good time to write books about what inflation really is, and how to protect assets from melting away like a snowman in July.

Books with "frugal" in the title will do well, and certain DIY (Do-It-Yourself) titles will see a resurgence as consumers who are used to replacing failed household appliances with new or calling up a $50/hour repairman will start thinking twice about the expense. Books assigning blame for the economic problems will also be popular. But my advice to self publishers to stick with niche titles until they are established still stands. Avoid the grand themes and write books that address a specific problem with useful solution written in understandable language for the novice and you should earn some sales.

The second problem is one that is faced by successful self publishers, those of us who have bought some breathing room through our efforts and have grown used to working without the pressure of wolves at the door. The only truly inflation proof investment I'm aware of is to put your money into something in which you hold the pricing power. The only way of doing this is to own the business, otherwise, you can't make the decisions. Rather than plowing all of your savings into a local restaurant and trying to raise the prices to keep pace with inflation, I'd recommend refocusing on your publishing business, perhaps co-authoring some books if necessary, to grow your list. As a publisher, you can always raise your own prices with sufficient notice and a quick cover redesign, and if the economy truly encounters stagflation, your customers will expect to pay more.

But perhaps the main point I'd like to remind myself and my publishing friends of is to beware that knowledge has a time value. What we all "know" about publishing in the mid 1990's through mid 2000's time frame may no longer hold true going forward. I've been involved in small businesses as long as I've been working, almost 30 years now, and I've seen many a small business fail by sticking with their business plan despite changes in the market. The final nail in the coffin is often a desperate attempt to prop up the old business model with advertising. Don't panic because your publishing business stops growing, or even sees declining sales. Try to see your complete economic picture, and ask yourself if you're better off than you were five or ten years ago. If you keep producing quality titles and weather the down-turn, at some point in the future, you'll see windfall profits when the economy picks up. Unless, that is, you've shifted your entire title list to books about the end of capitalism:-)


topfunky said...

Almost half of my business comes from outside the United States (via the internet). I'm hoping that this diversification will help my publishing business weather a downturn and even benefit from a weaker dollar.

Morris Rosenthal said...


Diversification is good. I get around a quarter of my income from overseas these days, with part of the gain being due to the rise of the British pound from around $1.50to $2.00. However, as pessimistic as I am about the US economy, I'm not sure that the dollar will fall that much lower, as the Europeans will likely be forced to cut their own bank rates in the near future.

I am tempted to get back into ebooks in a serious way. Thanks to my Internet site, my ebooks always sold well, but I didn't want to go without DRM (or support it) so I never got into direct sales.