Wednesday, January 25, 2006

Thinking POD? Think Again....

Authors often ask me if self-publishing is a viable option.

You'll have to work your butt off, but I believe it can be done. A few months ago I interviewed Sandy Tooley, who self publishes. And I really liked Jim Hansen's Night Laws.

But these folks became their own publishers.

POD vanity presses (XLibris, PublishAmerica, AuthorHouse, iUniverse, Booksurge) are another thing entirely. For a price, they'll publish your book.

Some quick definitions: POD is a technology that allows books to be created to order, as opposed to offset printing that requires books to be warehoused. Vanity presses are publishers that the author pays, rather than publishers that pay the author.

Is it possible to be successful using one of these services? Let's crunch some numbers. For this example we'll use real figures, but we'll call the POD vanity publisher "Happy Press."

Happy Press demands a minimum retail cover price of $18.99 for a standard 6 x 9" 250-350 page trade paperback. If your book is longer than 350 pages, the price goes up.

Would you pay almost twenty bucks for a trade paperback, when the current bookstore rate is between $10 and $16? You can buy bestselling hardcovers for $19, or for less on Amazon.

But, for this example, let's assume your book is so good that people will pay that much.

Tradional publishers offer between an 8% and 15% royalty, depending on the book type and print run. Happy Press offers a 25% royalty. This seems pretty good, but why the hell are you even getting a royalty? It's your book, you're paying to have it printed, so you should keep all the rights and make 100% of the profit. Right?

At least, you would be keeping the profits if you self-published on your own, instead of using Happy Press.

That aside, 25% of 18.99 is about $4.75.

Depending on the set-up package you buy (between $2k and $5k) you'd need to sell between 422 and 1052 to break even. But those would all have to be online sales (through Amazon mostly.) Why?

Because you still have the problem of getting your books into stores. For an extra $600 fee, Happy Press will get you into Baker & Taylor, which is a distributor. Newsflash: BT distributes millions of books. Do you see millions of books on the shelf at your local bookstore? No. Just because you have a distributor DOES NOT MEAN they'll stock your book. Only that they can order it.

Who is going to go into a bookstore and order your book? Considering POD won't get reviewed, no one will know about your book. And I'm betting that Happy Press doesn't offer the standard 55% discount to distributors, which means the bookstores will only be able to order copies at perhaps a 15% discount (standard for POD) which means the bookstores WILL NOT carry you on the shelves. Do you think they'll stock a $19 paperback from a POD company and an author they've never heard of? They'll know you're POD because the stock number will always be 100. Do you think the postcard you sent the bookstore will persude them to stock you?

The answer: No.

Can you sell 1000 copies through Amazon? In the first few weeks of its release, bestselling author Kay Hooper sold 35,000 copies of her last book through bookstores. How many did she sell through Amazon? 300 copies. Think your book will outsell hers online? Think again.

But perhaps there's another way to get your book into stores...

Happy Press offers authors books at up to a 70% discount if they buy 1000. That sound great, doesn't it?

Perhaps you can sell those to stores yourself and make all the profit.

Let's do the math. You've got to give the bookstore a 40% discount. So you'll sell them the books for $11.40 each. That leaves you with a $5.70 profit per book. Not bad. But out of that comes the Happy Press Package fee, the printing cost, shipping the book to bookstores, and the effort to just get the bookstores to carry you (an effort that traditionally published authors don't have to make.)

Also figure in a 50% return rate.

If you get 1000 books into stores, and sell 500, you'll make $2850. Subtract the $5700 (the cost of printing 1000 books at the 70% discount) and subtract the package cost ($5000 for all the set up fees.)

You've only lost $4900, selling 500 books.

If you sell 2000 (which means you'll have to ship 4000) your total cost would be:

$5000 set-up package
$22800 book printing costs
minus $11400 profit

Which means you're losing $16400.

Let's use a best case scenario and say you bought a lesser set-up package from Happy Press and had a 75% sell through (which is impossible, but let's dream big.)

$2000 package
$22800 to print 4000 books
$34200 profit for selling 3000.

So if you sell 3000 books out of 4000 printed you'll earn a profit of $9400.

But shipping books will cost a minimum of $1 each, so subtract $4000.

Now you're in the black $5400. Not bad. But not enough to live on for a year.

And don't forget---how did these bookstores hear about your book? You had to write them, call them, or visit them, to get them to stock you. Phone calls, mail, and gasoline all come out of your profit.

If you allow returns, you'll need a distributor, who will take an extra 15% ($5130) of the cut, plus set-up fees. And you'll still need to hustle to get the stores to carry your books.

Now let's have a reality check. Bookstores are not going to carry you. You won't get reviews. And customers won't want to buy a $19 paperback.

The only way you'll sell your books is by begging bookstores to let you do signings there and then spending several hours on your feet handselling them.

In all of my hustling, I've only handsold about 3000 copies of my books in two years. And I do a lot of hustling.

If selling your books were your full time job, and you visited a bookstore every day of the year, and sold ten books at each visit (a reasonable number) you would only sell 3650 books. Not a bad number, but for all that work, you'll be lucky to break even, let alone make enough money to compensate you for your time and effort.

My advice: Stay away from POD vanity presses.

If you want to use POD as a technology to self-publish, make sure you're hiring a printer, not a publisher. You need to keep the rights to your book.

You'll still have problems getting your books into stores and getting reviewed, but your cover price will be lower, your overall costs will be lower, and your profit margin better.

Or you can continue to improve your craft, find a good agent, and sell your book to a traditional publisher.