By Bill Duncan
Over my nearly forty years in business, I have authored six and one-half books (one of them is still in work). The first four were non-fiction business books, and were published by traditional publishing houses like AMACOM. The other non-fiction book was self-published using Dog Ear Publishing. These days I am writing fiction, and I have discovered that most of the same principles about making money from writing apply to both genres.
The financial pros and cons of self-publishing
The fundamental principle I discovered over the course of those experiences is this: Publishing through a big publishing house nets the author less (often much less) than ten percent of the cover price of the book. But the built-in marketing and distribution channels of the big publishing houses mean that a new book has a fighting chance of actually being noticed by the big book sellers, carried by retailers, and achieve some respectable volume. My book Manufacturing 2000, for example, which was published in 1994 by AMACOM, had a cover price of $20, netted me ten percent of the book revenue, and sold thousands of copies.
My later book, Enterprise Optimization (a non-fiction book about Mergers & Acquisitions) published independently through Dog Ear, netted me about eighty percent of the nearly $40 dollar cover price, and sold far fewer (think hundreds of) copies. From a Return on Investment (ROI) perspective, ten percent of $20, or $2, times ten thousand books is $20,000 to the author using the traditional publishing house channel.
The other approach, independently publishing, yielded eighty percent of $40, or $32, times 200 copies, or $6,400.
The most recent of my nonfiction books, Enterprise Optimization, was produced back in 2006. In those days, there were few self-publishing options, and there was a much more limited social media landscape across which to promote self-published work. Independently published work was also far less acceptable to retail sellers, and largely ignored by book reviewers and distributors. Those things have changed dramatically, providing authors with a much wider array of options.
Facebook pages, Twitter feeds, Pinterest, book blogs, and book review sites like Goodreads offer many opportunities for an author to promote his work. However, these promotions are rarely free, in most cases and it takes time—a lot of time—to use them effectively. If an author already has a full-time “day job” —as I do—to pay his bills, the marketing of his book simply takes much more time than he has. Devoting one’s free time to writing is one thing; participating in the editing, submission, revisions, and marketing of the work after it’s completed, separates those who simply want to tell a good story in a great way from those who have almost nothing else to do.
This situation has spawned an entire service industry of skilled (and semi-skilled) technicians who understand concepts like Search Engine Optimization (SEO), Facebook Fan Page creation, YouTube book trailers, and other marketing tools. For small businesses offering these capabilities, business is booming.
The number of self-published books has basically doubled since 2010; more than 391,000 independently published books were released in 2012, and many more were released in that same year without ISBN numbers. In recent months, a number of publishing and distribution houses have recognized that explosion in demand, and set out to capitalize on it. Amazon’s Create Space, Ingram’s Spark, BookBaby and Smashwords are all examples.
So why are so many people self-publishing these days?
The bottom line, from the standpoint of the author, is that 98% of independently published authors will not make any significant income from their writing. According to recent reporting in a wide range of publications including Forbes, only 1.8% of self-published authors earn more than $5,000 in any given year from their written products. If the remaining 98.2% of authors used one or more of services like those mentioned above to get their work out the door, they have almost certainly lost money to produce their work and make it available to readers. As one recent article says, if you’re writing and publishing in order to make money, you’d be well advised to just buy lottery tickets. However, the same mentality applies; a lot of people are rolling the dice.
Just as there are a few wildly successful lottery players, there are a few wildly successful independently published authors. One of them has been the subject of numerous articles and blogs which say “most of his months are six-figure months.” Those reports spur on many of the remaining self-publishing authors.
Another reason that so many are self-publishing these days is that the big publishing houses have become very selective about what they accept and promote. Major houses will usually
only accept work from a literary agent. Literary agents demand a significant cut in what would otherwise by the author’s profits, and they are nearly as selective as the big publishing houses. From the author’s perspective, it is useful to hire a literary agent for representing the author’s work to publishers – in other words, the author wants to write the books and turn the resulting work over to the agent to see it through the editing, publishing, distribution and marketing processes. However, these days the literary agents have become so selective that authors must do all of those tasks themselves before the agent will agree to represent them, so the burden is once again on the shoulders of the author to do all of the downstream work.
Here is an excerpt from an e-mail I received recently from a literary agent: “Most self-published authors get the attention of publishers by showing how many copies they’ve sold on their own, usually thousands. You’ll have to get your sales up to show agents (and then editors) that your work will sell. I’d recommend a few things: 1) make the first book free 2) try to get coverage for the book from bloggers 3) try to build a social media following for your fiction. When you get to about 100 reviews on Goodreads for the first book, check back in.”
So from the literary agent’s perspective, he isn’t going to take the time to even read the book to determine whether it is something he wants to represent. It could be great or it could be terrible; the agent doesn’t care. The agent cares only that the author has already demonstrated it will sell thousands of copies. This maximizes the odds that the agent will make money and will make it quickly and easily.
So the question becomes: At that point, why does one even need a literary agent?
The market has become so saturated with work, especially self-published work, that literary agents these days advise authors to completely devalue their initial work – literally give it away – in order to build a following, so that subsequent work will sell. This further exacerbates the financial investment and number of hours required by the author, doing everything except writing—the very thing the author set out to do. I think this business model is a spurious one.
While it’s certainly true that men’s razors are sold very cheaply – almost given away – so that customers will then be required to purchase replacement blades at much higher margins, fiction books aren’t razor blades. There is no requirement for readers to continue to buy subsequent books even if they find that they like the author. In addition, none of the authors who come to mind for everyone in this field from Tom Clancy to Robert Ludlum gave away their first book for free. Did you get your first copy of “Hunt for Red October” or “the Bourne Identity for free?” No. Giving away the initial books might help to incrementally expose one’s work, but the likelihood of moving into that top 1.8% of authors earning a six figure salary from their work by giving the first book away is so low that I have never heard of it happening; have you?
Finally, there is this: Writers write. We can’t help ourselves; it’s just who we are, and who we are always dictates what we do. In 2014, if one is fortunate enough to be able to invest thousands of dollars in writing, publishing, promoting, and distributing his work, one can make his story available. But that story is slipping like a guppy into a lake the size of Lake Michigan, occupied by hundreds of thousands of other fish, competing for fish food that is in very limited supply.
Many of us who make that sacrifice, investing our time, our money, our energy, and our personal reputation in the process do so because we really have no choice. We have a story to tell, and we want that story to be heard.
In my own case, I am authoring a series of fictional stories based largely on my experiences working with military and intelligence personnel in the Middle East over recent years. I think the situations and the motivations of the people involved are both relevant and compelling. I even developed a web site around the first book in the series, The Salacia Project, displaying photos from my time in Iraq and Afghanistan that point to the origin of many of the scenes and events in the book. So in my case, it’s an opportunity to acknowledge the incredible work and sacrifice made by our Armed Forces and our intelligence community – much of which is rarely heard otherwise. It’s something that I’m compelled to do.
Beyond that, I love writing. The characters in these books—many of whom are based on people I worked with—seem to me to come to life at various times during the writing process. They “take over” and tell the story through my keyboard, taking the plot and the dialog in places I had no idea they were going when I sat down to write on that particular day. I love it, and wish I could earn a respectable income from it, but even if that never happens I will probably never stop writing.
Summarizing the points illustrated here, I think it’s important for people considering self-publishing to understand these things:
1. Unless you already have a nationally or internationally recognized name, the odds are roughly 98-to-1 that you will never earn more than $5,000 a year from your writing, before expenses, and you will never have a positive net income from writing after expenses are considered – even if you value your time at zero.
2. Unless you are very fortunate indeed, no one is interested in helping you unless you are willing to pay them to do that – in which case many people are willing to help, but a few of those actually provide a service that matters from an ROI perspective.
3. In the end, many of us who self-publish are writers who feel compelled to tell a story. The personal and financial sacrifices required are not optional; they are simply what must be done to fulfill our purpose in life.
Bill Duncan is the author of The Salacia Project, available now through Amazon and as an e-book via Kindle, iBooks, Nook, and other e-reader channels. Information about the book, and links to purchase the book, are available at www.bill-duncan.com.