Amazon's Virtual Supremacy

I've been working on my annual update of sales for the big book retailers, so here are a few pictures worth a thousand words. If you though it was just the American bookstore chains loosing ground to Amazon, imagine what's happening in the UK, France, Germany and Japan:

Amazon North America media sales (Books, DVDs, CDs) have soared passed the chain store sales. I don't include the total in the B&N number, which would still be lower as doesn't sell a half billion a year, because the point of the graph is to contrast online sales vs brick-and-mortar sales.

An interesting take away from Amazon's growing dominance of the retail book trade is how well the concept of a virtual bookstore has succeeded. The last numbers I saw indicated that the bookstore chain superstores, with 100,000 to 200,000 books in stock, turn their inventory around twice a year. A rough math check would be to take the approximately $4.5 billion sold by the B&N chain and divide by their 700+ superstores for revenue of under $6.5 million per store/year. Turning the inventory of each store twice a year would imply 200,000 to 400,000 books sold per year (I'm just ignoring CD's, coffee, smaller stores, etc), for an average sales price between $32.50 and $16.25 per item, depending on how many books the average store stocks. The actual numbers would be lower to make up for the factors I ignored. If they're turning the inventory more than twice a year, it can't be by much.

Bookstore chains supposedly follow a Pareto function, where something like 80% of their sales comes from 20% of the titles. Most of the titles in superstore chains are there as wallpaper, to make the cavernous building look like a bookstore, and the titles that don't sell eventually get returned to the publishers. Bookstore chains are heavily reliant on blockbusters to bring in customers, and to make that happen, sell them at steep discounts. Part of the 2008 drop in chain sales in no doubt due to the end of the Harry Potter series.

Around 2,000,000 titles at Amazon sell at least one copy a year. They do so without crowding other books off the shelves, and there are millions and millions more titles selling at an even slower pace. But what must drive B&N and Borders absolutely nuts is that the "superstore" portion of Amazon's inventory, the top 200,000 or so titles, are virtual as well. When the college bookstore season rolls around, tens of thousands of course titles pop into the top 200,000, without Amazon having to take any action to make room for them. When the students all have their books for the semester, the consumer and professional titles rush back in to fill their places. The same thing happens with summer reading books and holiday gift books. It's all automatic, and it simply adds to Amazon's sales. Whatever the top 200,000 titles are at any given time doesn't mean that those titles being outpaced for the week or the month are selling at a slower rate than they previously had on Amazon. It's simply means other titles are selling more at the moment. It's this virtual bookstore that's driven Amazon's supremacy, more and more sales, no limit to shelf space in the store.

Editors Confuse Books with Websites and Art

I mentioned in correspondence with an editor the other day that established (or establishment) publishers confuse websites with books. For that matter, they also confuse books with art, a title to which most books don't even pretend to aspire. At the risk of oversimplifying, the long, expensive book editorial process practiced by trade publishers is a legacy of offset printing, and nothing else. Editors believe that the process was introduced to produce a work of art, but publishing is a commercial venture, not a starving artist in an attic. The offset printing model is all about producing a large number of books at a low cost and then warehousing them until they can be sold. If errors in the editorial process result in a warehouse full of books that can't be sold, woe unto the ex-editor who slipped up.

Websites are inherently flexible. There is no incremental cost to changing a web page after it's been published, other than the time to make the change and click the mouse. Editors moving from the book world to the online world labor under the basic confusion that their job is to produce art online. Given the fact that even in their book publishing days, producing art was rarely part of the business plan, this internal contradiction is likely to produce a lot of neurosis. Ironically, the flexibility of online publishing means it has a greater chance of producing art in most cases than the traditional editorial process. Performance artists have always known that preparation and practice (analogous to the editorial and production processes) are no substitute for live performances. That's why so many plays and musicals start their journey in the sticks and work their way up to off-Broadway before landing a top theatre engagement. Film and music festivals exist in part as a live fire trial for new artwork and artists, since art can't exist without an audience. TV comedians want joke writers who work in stand-up because it's the only reliable way to find out if the jokes are really funny. For a small group of editors at a publishing house to believe that they can stand in for a general audience to guide the development of new work is at best a folly and at worst a vanity.

It's important for editors trying to transition from publishing on paper to publishing online to choose the right business model to emulate. For better or worse, that model is the software industry. Whether you're a veteran of or a refuge from the established trade industry, you'll do better to emulate Microsoft than McGraw-Hill, Oracle than O'Reilly, SAP than Simon and Schuster. The key to winning in the software marketplace has always been to get there the "Firstest with the mostest" and to deal with problems as they arise. In fact, the most shocking difference between the software publishing industry and the book publishing industry is that with software, the publishers often profit from their mistakes! Just take a look at the version number of whatever software you use around the office, and try to remember how many times you've paid for "improvements" over the years. Andy Warhol would have loved software.

Since most of the editors I've know in my life are actually very intelligent people, I don't think they are missing the boat because they haven't figured this out, they're missing the boat because they've been conditioned to be snobs.

"Oh, look at those mistakes. Nobody will ever see those on our website!"

That's right, because nobody will ever visit your website.

Creating an Author Website in Nvu Video Tutorial

An author e-mailed me last week asking if I could recommend web design software for him to use, and when I answered with my usual "Whatever you're comfortable with," he wrote back suggesting the free Nvu web editor. It seems to me that I tried Nvu some years back and lost interest in a couple minutes, but that's mainly because I have a system that works for me and I don't get excited about software. Today, thanks to YouTube, I decided it's about time I stop preaching the theory of web design and give reluctant authors a quick five video tutorial to get them off the ground running. I started with a logo:

The next step is to open the free Nvu web editor and start laying out a basic design. I'm intentionally doing this the crudest possible way, using tables, for a couple reasons. First of all, it works just fine for an author platform, as my own website deomstrates. Second, there's essentially no learning curve. You don't need to study up or read the manual to do this. If you simply follow the steps I show on the screen, you should end up with a functioning website design for your content. You can always change the page design in two months or two years if you think it's important, the main thing is to get started:

Once the basic page design is set, the next step is to build the initial navigation links. Rather than building a template with CSS or HTML and applying it to a series of pages, I'm creating one standard page and then saving it multiple times. It's not very elegant, but it works, and it's simple as dirt. By creating all of the navigation links before creating the pages, it saves the step of copying and pasting the final navigation links onto each page. Anybody who designs websites for a living will tell you this is incredibly inefficient, but unless you are planning a website with thousands of pages and changing the navigation on those pages every day, it's no big deal. Remember, you're an author aiming to attract readers for your work, not a Internet spam shop trying to trick people into visiting your site. And note that I'm intentionally choosing short file names for the pages. I believe that multi-word file names tend to misguide search engines into seeing the web page content as being constrained by the file name, which could help explain the poor performance of many archived blog posts in search:

One annoying feature of the Nvu software is it makes the file name the same as the HTML page title (this is the page title that appears at the very top of the browser), which is an important cue for search engines. The page title tells the search engine what you believe the page is about, a good tie-breaker for the search engine in deciding where to send visitors. The HTML page title doesn't have to be the same as the heading at the top of the page or the page name in the navigation link, but I'm using the page heading as the titles for these pages just to save the typing:

In the final video, I go back and fix a few omissions, and demonstrate the working navigation in Internet Explorer. I also turn off the table boundary to give the pages a cleaner look. In showing how the website operates in the browser, I uncovered a typo in my original navigation. So the live fix is to fix it in one place, and simply copy and paste it onto the other pages. It takes all of 30 seconds. A few other Nvu quirks show up, maybe due to operator failure since I didn't read the instructions or check the help menu, but I don't get obsessed with aesthetic details so it's all water off a duck:

The basic six page website we end up with is ready for the author's content. After a decade of corresponding with authors about their Internet plans, I can tell you that most authors never go beyond the planning stage. For many authors, it just seems too complicated, or they weren't willing to buy a domain name and pay $5 or $10 a month for hosting. I uploaded the pages to a directory on my website, and I added an exclusion to my robots.txt file so that the search engines won't waste time indexing these empty pages. The five videos might have run over a half hour in length, I'm sure they were less than forty minutes, and I didn't leave any steps out, so the website you see took me less than forty minutes to create while talking my head off.

The only thing missing from this website is the content, which as an author, you've already written. The content can be excerpts from your books, draft versions of manuscripts, research notes, or your general observations that didn't make it into books for one reason or another. The important thing, since you are trying to establish a platform for your work, is that the website includes the work you want to make known rather than a bunch of unrelated writing that you think will do a better job at drawing visitors. If you've written a series of travel guides to the Montana, you aren't going to help your cause if you build a website dedicated to beach erosion. You might become very popular in the beach erosion community, but Montana is a long ways off, and landlocked to boot. The main trick to attracting readers to your website is not to play any tricks. Just let your work as an author convince potential readers and book buyers that you have something reading.

Feeback Loops In Online Publishing

Jon Reed, the owner and moderator of the POD Publishers group on Yahoo!, just posted an experimental podcast we did the other night, in which we ramble on about publishing online in an interview format for 45 minutes or so. I'm warning you ahead of time that the audio isn't great, I think there's a bad phone connection quality to my voice, but let me know. I ended up taking a small segment of the interview as the subject of my first video in a while, which sports more than my usual number of speak-o's because the batteries died before I could do a second take!

I've noticed lately that I've been rejecting at least half the comments that come in to my publishing blog. These aren't spam comments, they are simply off-topic or from people who don't read the specific instructions not to comment on old posts. Unlike many bloggers, my contact information is public and I accept and respond to e-mails, so the blog is not the place to post questions that aren't closely related to the post. I don't see the point of taking comments on posts that have aged off the front page, in part because it does nothing to add to the general discussion (since almost nobody ever sees them) and in part because I don't want to be involved in endless debates about the past.

Sometimes I really regret having to reject a blog comment from an anonymous individual on a post that's several years old, just due to the humor factor. Here's an example:

Did you lose a bet and have to write this article? You should have entitled it, "Write a novel? Don't Bother".

Mind you, it's a rare article that offers so little of value. Not one constructive idea, not one. Bupkis. Congratulations, you should be a publisher.

Guess what anonymous? I am a publisher, and I actually make a living at it:-) I should also point out that if people sign or otherwise leave identifying information in a blog comment that I reject for the above reasons, I take a few minutes to try to track them down with Google and inform them why.

Another recent comment that I bounced for the same reason was apparently posted by somebody working for Amazon or their PR firm. It was on an old post about Kindle, and read:

"The New Amazon Kindle 2 Has Arrived
Price: $359.00 & this item ships for FREE"

along with a link to the Kindle page on Amazon. I thought about making an exception to my obsolescence rule, but then I'd have to start making exceptions for everybody.

I accidentaly titled the post "feeback loops" and decided to stick with it, since there's a great deal of truth in the typo for how the top social bloggers function. They essentially fee each other through blog rolls and back-and-forth comments, which also tends to close the loop against genuine input. Traffic and "status" are passed through a circle (I avoided being gross here), but the ultimate outcome is that the author loses the opportunity to be part of the real world and get unbiased feedback.

One of the interesting things about feedback from blogs and other social networking sites is that it can be highly misleading about the market potential for a new book. It's kind of like starting out by doing impressions of your teachers or the principal in school, and based on the feedback from friends, trying to make the jump to being a stand-up comic. Those impressions might not be funny outside the small world of people who know the targets, and the audience may be a captive one, particularly if you're jumping up and clowning while the teacher's back is turned. When it comes to researching the market for a book and later promoting the book, the true value of a blog isn't the number of subscribers (unless that number is in the tens of thousands), it's in the number of visitors you get every day from search.

An uncle of mine used to tell a joke about a man who bought stock through private placements in a little company that sought local investors. Over the years, he accumulated more and more stock as the price rose and rose. One day, he decided to cash in his shares, and went to the company to investigate the how to sell the shares for the best price. The financial director of the company told him, "Well, we really don't know, since you're the only one who ever bought shares."

There are all sorts of ways you can get tripped up by the enthusiasm of people who have relationships with you of one type or another. I remember an unhappy woman who wrote to me years ago after she had been encouraged by various friends and members of her community to write and publish a book. The same people laughed at her when she tried to sell it to them, and they were invested through face-to-face relationships. The people who follow your feed or become your "friend" online have made an investment in you that cost them the click of a mouse. While it means something, as nobody forced them to click, it means a lot less than a conversation in the flesh, or taking a few minutes to type a comment.

But far more important than comments for the nonfiction writer are questions. The very act of somebody sending you a question is an implicit recognition of the fact that you've impressed them as a resource, as somebody who may have the answer. I've often heard from people who have bought my books AFTER finding an answer to a question on my website. In some cases they buy the book to thank me, and let me know that, but in other cases, they see my books as a potential source of answers for questions they haven't even thought of yet, ie, knowledge.

The examples I gave on the value of social networking feedback in both the podcast publishing interview and the video were off the top of my head, but I hope they help illustrate why you need to take all feedback with a grain of salt. There's no substitute for experience in any form of communication, but if you lack that experience, here's a exercise you can try. Make a list of conclusions about the feedback you've received from the standpoints of both an optimist and a pessimist, then put it aside for a week and try not to think about it. After the week has passed, pull the list out and see which conclusions make the most sense, maybe run them by a friend or two if you aren't sure. The idea isn't to destroy your dreams, it's to prevent them from turning into a nightmare while you hide under the blanket of "I never knew".

And when you're on the other end of the bargain, commenting on somebody's blog or sending them direct e-mail, make sure you read any instructions they may have included on their contact page, or your attempt to communicate may fail.

Self Publishing an Ebook from Word 'Save As PDF'

Based on the number of ebook questions I've been getting, I think it's time to revisit the ebook publishing subject. Foner Books has now sold ebooks in over 50 countries worldwide, with eighteen of those destinations bringing three or more customers. While some copies have appeared on various "reputable" file sharing sites, they all removed the unauthorized copies when I followed their guidelines and notified them. No, I don't enjoy jumping through hoops for people with questionable business models, but at least they responded. For the first time in February, Foner Books passed $1500 for the trailing month of ebook sales. This income is based on the ebook versions of three POD titles, and the ebooks were all published directly out of Microsoft Word using the "Save As PDF" menu item shown below:

If you are using Word for Microsoft Office 2007 and you don't have the "Save as PDF" plug-in, you can download it for free from Microsoft. I've described the merchant solution I'm using in previous posts, but to review briefly, Foner Books uses PayPal to process both credit card and PayPal payment orders, and e-junkie as the download service. I should note that many people without credit cards or who don't want to use their credit cards online do buy through their PayPal accounts. The initial problems with people paying and not following through to the download link and not receiving the confirmation e-mail because it was eaten by their spam filter have dropped to around one order in a hundred. I've actually had more incidents lately of people accidentally ordering two copies and only downloading one, which I refund immediately without waiting to hear from them first.

Only one of the titles is available both on Kindle and direct from the Foner Books webiste as a PDF, my book on POD publishing. That title has sold 120 copies as a printable PDF file download for $9.95, and 28 copies as a Kindle ebook for $7.95. I don't link the Kindle ebook directly from my order page, and only two of the Kindle purchases were credited to the Foner Books Amazon Associates account, so those Kindle sales are mainly created by the Amazon platform. Due to the lower publisher share paid by the Kindle program (35%), the direct ebook sales accounted for over $1000 of net profit, while the Kindle sales brought in just under $100. .

One concern I have about pushing self publishers to bring out their own ebooks is that they may be misled by so-called ebook coaches or consultants. This morning I heard from an individual who had received a multi-thousand dollar proposal to coach him through the ebook publication process, and he was already receiving regular solicitations from another ebook coach looking to sell him help. All I can say is run, do not walk, for the exit. Compared to publishing trade papebacks, publishing ebooks looks dead easy. After all, the only software you need to generate a saleable ebook is a PDF generator, and you can find free ones online if you're desperate. I use the PDF generator in Microsoft Word because I paid over $300 for Office, but in either case, a great PDF file does not a great ebook make. The main challenge for new ebook publishers is that it seems so easy, they may be tempted to publish garbage. You still need to master the subject and come up with quality writing, editing, proofreading.

PW reported today that Thomas Nelson is rolling out a unified media program, meaning book buyers will get access to audio and ebook files in various formats for some titles. Other publishers have experimented along these lines with free ebooks, and Amazon has long offered an "Upgrade this book" option for titles from participating publishers, offering cheap, immediate e-access to buyers of a paper book. I don't see ebooks as gimmick or a way to wring a little incremental income out of backlist titles, thanks to the ability of the Foner Books website to attract visitors and potential customers. At this point, ebook sales are running around a quarter of my book sales (or around 50X the trade industry average), despite the fact I've kept my most recent and most popular paper title out of the ebook loop as a control group. And since a significant portion of our paper book sales are driven by the website as well, I'd estimate that if I dropped the POD business and did nothing but sell ebooks direct, it would bring in around $3,000 a month. While I hope to keep publishing and selling with POD going forward, it's nice to have a fallback position that will pay the bills.

It takes two basic ingredients to make money selling nonfiction ebooks: the knowledge to write the books, and a platform from which to sell them. For a handful of authors, that platform is Amazon or one of the commercial ebook sites, but that requires a bestseller, of which there can only be a few. Yet new ebook publishers I've corresponded with are often laboring under two misconceptions: that they can hire the talent to write quality ebooks, and that they can sell them through extensive use of advertising. Unless you pay well above trade publisher rates, you aren't going to find somebody to write a quality book as work-for-hire, so think five figures. But the ebook outsourcing schemes I've seen promoted talk about getting content for a few hundred, or at most, a few thousand dollars, which is barely enough to pay for a decent edititorial pass and proofreading. The other side of the equation, selling without a platform by paying for Internet advertising will bring you sales, but those sales won't be cheap and you'll have to be an excellent bean counter to make money even if you've written a great book yourself. If you're wondering why I've used "book" and "ebook" interchangeably, the work is the same for a real publisher, right up until you get to the publishing part and start selling downloads rather than having books printed.

If I could establish a creed for ebook publishers, it would be, "Don't publish an ebook you wouldn't want to buy yourself." In the meantime, I've reverted the blog title to Self Publishing, but with version number 2.0.