Guest Post by Scott Sigler

I've never met Scott Sigler, but he and I are often mentioned in the same breath when people talk about self-publishing success stories. His route was different than mine and... well, I'll just let him tell it. Here's Scott:

Back in 2008 I had a Big Idea (I’m making air-quotes with my fingers here, folks ... a “Big Idea”). At the time, I thought this idea was so disruptive that it would impact traditional publishing. Turns out an entirely new phenomena cropped up to impact both my Big Idea and Big Publishing, a phenomena that has changed both forever.

If you want to read about my writing background and how I built an audience, I’ll put it near the bottom of the article. But first, my Big Idea: a self-published, high-end collectible hardcover, pre-sold to raise capital prior to printing.

I give away all of my stories as free, serialized audiobook podcasts at scottsigler.com and at podiobooks.com. I’ve been doing that consistently since 2005, so I’ve built a good-sized online audience. I thought that if I could get 10 percent of my 10,000-odd weekly listeners to buy a self-published print book, I could make some scratch.

If you want to self-publish, that’s easy enough to do with trade paperback POD. If you want hardcover, it’s not so easy, and if you want high-quality, collector’s edition hardcovers, it’s going to cost you. POD for that kind of book makes the price points ridiculously high. To do it right (and to actually have product cost low enough for a real profit margin), you need to do an actual print run. I didn’t have the capital to do book of that caliber, but I knew where I could get it.

From my fans.

This was 2008. The eBook craze was just a blip on the radar for all but the truly prophetic. Some guy named “Konrath” was jabbering how he was going to make all this money. Blah-blah-blah. Sure, Konrath, go crazy with your “eBooks” — like that’s ever going to catch on.

I partnered with a PMP-certified Project Manager named AB Kovacs who runs a successful logistics management company in San Diego, CA. I had the marketing and content, she had the management and planning skill set — together we formed Dark Øverlord Media and decided to melt faces.

We set a goal to sell 600 pre-orders of a signed, numbered, limited-edition $34.95 hardcover, which would generate a $21,000 budget for cover art, interior layout and hard cover print run of 3,000 copies. If I could sell those 600 books, I would have no out-of-pocket overhead. Everything beyond the 600 copies? Step 5: profit.

At the time of our first book together, I already had two hardcovers, INFECTED and CONTAGIOUS, out for Crown Publishing, a division of Random House. Crown wasn’t interested in my scifi/crime/sports book called THE ROOKIE. I describe it as “Star Wars” meets “The Blindside” meets “The Godfather.” You can see how that might not fit into their thriller-based marketing strategy.

So, A and I used THE ROOKIE to test out our theory. We launched our pre-order of THE ROOKIE on April 25, 2009. Despite a server crash due to unexpected demand, we hit our 600-copy goal in the first three hours, thanks mostly to die hard fans who hustled to get the lowest possible number. Huzzah! We covered our costs!

Eighteen days after launch, we pre-sold copy number 1,000.

Dark Øverlord Media had made a profit on our first book. Well, what the hell, let’s do it again! We repeated the process on April 1, 2010 with the next book in the series, THE STARTER. That time out, it took only ninety minutes to sell the six hundred copies. We reached the 1,000 copy mark in just eight days.

We also crashed the server — again. That cost us money, as some people didn’t come back. It damaged our brand. What was funny the first time around now annoyed our customers. Unacceptable.

Late in 2010, we launched eBooks for both THE ROOKIE and THE STARTER. We’re also selling audiobooks for both. Combined with the hardcovers, we had too many products to manage on our site. We partnered with BackMyBook.com. Their e-commerce platform now handles all the product sales on our site, both for physical items and for digital downloads. BackMyBook.com helps track our inventory, fulfill orders, and handles the big file transfers needed for the audiobooks. While it’s great to make 70% selling an eBook from the Kindle store, it’s even better to make 90% selling that same book from our own site.

Even as eBooks are blowing up the market, it seems our fans still want these special hardcovers. Just a few weeks ago, on April 1, 2011, we launched the pre-order for the third book in the series, THE ALL-PRO. On our third try, we sold 600 books in just under one hour, and the first 1,000 in just three days.

To reach our primary goal of 1,000 copies, we cut the time from Book One to Book Two in half, then halved it again from Book Two to Book Three. The model works, y’all.

Oh, and this time? The server didn’t crash. Thanks, BackMyBook.com!

Now, this may all sound like a movie that should be titled Happy Times in the Candy Land of Magic Publishing, but it’s not that easy. We still manage a 3,000 copy print run. This is not POD, but an offset print run through RR Donnelley & Sons. The books ship from North Carolina to a rented warehouse in San Diego, where I sign every single book. Then A and I number, package, and ship approximately 1,500 hardcovers. We put the remaining 1,500 copies into a smaller warehouse, then manage inventory and shipping until those sell out.

WHY I THOUGHT IT WAS SO DISRUPTIVE

It was fine and dandy for me to sell my 1,000 books, but what would have happened had a Stephen King or Stephanie Meyers done that? Imagine Meyers puts out a collection of Twilight short stories. She partners with web-savvy folks like BackMyBook to handle the pre-order, hires people to do production, but she controls a direct sale to the end reader. Say instead of a 15 percent royalty, she shifts into a 70 percent profit margin. She would sell, comfortably, 200,000 copies in the first day. That’s $250,000 at $34.95, a first day gross of $700,000 (shipping is paid by the customer, or course). She brings the money in up front, her project managers use it to pay staff and manufacturing. Of course there are plenty of costs involved, but sooner or later the 70 percent profit margin is going to whoop ass on the 15 percent royalty, no matter what the advance.

Because of the internet’s ability to allow authors to sell directly to the end reader, I thought that if big-timers adopted this pre-order they would have little need for a Big Publisher. If Stephen King puts out one short story collection a year, sells it directly online, he makes an extra million. Or two. Probably three. Oh, right, like his publisher is going to slap his hand and say “No, Stevie, you can not put out your own book!”

Maybe the model will be disruptive in the future, if big-timers want to manage their own process, but more than likely it won’t — not when they can do the same thing with an eBook and avoid all of the physical costs.

OUR EBOOK STRATEGY

All of this hardcover stuff is a grand old time, but we now define inventory as a curse word. We dream of a day where our inventory is nothing but ones, zeroes, and possibly print-on-demand paperbacks. We’re going to keep the hardcovers as a special, in-the-know item for the fans that really love the series.

We are happily watching people like Konrath, Amanda Hocking and Jeremy Robinson and plotting to follow in their footsteps. THE ROOKIE and THE STARTER are now available as eBooks, priced at $2.99. They’re available in the Kindle Store, BN.com, Sony’s eBook store, Apple’s iBooks store, and directly from us at scottsigler.com/gfl (at our website they are available for all eBook formats, because that’s how you bake a pie, people).

We only have these two eBooks right now, and I think that hurts our ability to make each title rank higher in their respective stores. We’re not getting a multi-title multiplier, if you will. THE ALL-PRO hits the eBook market on September 6 of this year, probably for $4.99. We also have a short story collection, BLOOD IS RED, hitting for 99 cents this week on Mother’s Day (because it’s One Bad Mutha of a book, you see). By the end of 2011, we hope to have five eBooks. We’ll see if that impacts the individual success of each book.

ARE WE STILL PODCASTING?

Yes. In fact, right now we’re podcasting THE STARTER, unabridged, for free. I’ve been podcasting since 2005; it’s something my fans have come to count on. We’ve refined the process so that instead of recording an episode each week, I record the book all at once. And even though we give it away, we also sell the unabridged audiobook as a digital download ($19.95). More ones and zeros, sitting there making us money whenever a customer wants to hear the whole thing all at once. It happens every day.

If you hear only one thing in this rambling blog, hear this — we give all the stories away for free, and people still buy them. There is something to be said for having the confidence that your storytelling and production chops are just that bad-ass, then letting the customer decide if the content merits their money. We don’t hold content hostage.

WILL WE KEEP DOING HARDCOVERS?

Probably. The fans love them. We crank up the collector’s value with sixteen-page color inserts and bonus content you can’t get in the free podcasts. The annual April 1 pre-order anchors our process and gives us clear goals to keep producing content. The pre-order process drives our eBook, audiobook, and podcast — if we get the hardcover done correctly and on time, everything else will fall into place.

But, high-quality hardcovers are a ton of work. We need the big print run to drive per-unit costs down to $8 or less (not counting the labor of A and I), which is the only way the process makes financial sense.

A QUICK OVERVIEW OF MY PUBLISHING HISTORY

Like most authors, I spent years in the trenches trying to attract the attention of Big Publishing. My agent at the time, Joshua Blimes, worked his butt off but we just couldn’t find the right fit. I kept writing and editing, and racked up four novels of 120,000+ words as well as dozens of short stories. Oh, and racked up rejection letters: I had a goal to collect 100 rejection letters. I defined that effort as the price of proving to myself I was in this game for good.

We eventually landed a deal with an imprint of AOL/TimeWarner to publish my thriller EARTHCORE. The book was due out as a mass market paperback in May of 2002, I believe. The 9/11 recession, however, killed that dream — AOL/TimeWarner scrapped everything that wasn’t already profitable. That included my book, just weeks before it would have hit the printing presses. Imprint scrapped, book deal gone, back to square one.

Joshua worked to land a new deal, but it didn’t happen. In February, 2005, I read of this newfangled thing called “podcasting.” I learned how to record and create an RSS feed. In March 2005, I was one of the first people to put out a “podcast novel.” EARTHCORE had already been professionally edited, so I released it as a weekly, serialized audiobook.

The book quickly attracted a big following. I finished the EARTHCORE podcast in August 2005, then quickly rolled into my next podcast novel, ANCESTOR. I landed a two-book print deal with an indie publisher, Dragon Moon Press, who put out EARTHCORE in trade paperback in 2006.

In 2007, I was on my fourth podcast novel when lightning struck. I had a new agent, Byrd Leavell of the Waxman Agency. Byrd was circulating my novel INFECTED to New York publishers. On April 1, 2007, I published ANCESTOR in trade paperback with Dragon Moon Press. The book hit #1 on Amazon.com’s SciFi and Horror charts, and was #2 overall in fiction. It only held those numbers for a couple of days, but it was #1, right when several publishers were considering INFECTED. INFECTED went to auction, and I wound up with a three-book deal with Crown Publishing.

Two weeks later, Rogue Pictures optioned INFECTED. A book deal! A movie option! Holy crap! But wait, there’s more ...

Crown was very excited about my potential, so the brass decided they needed to control the Sigler brand. They bought up the rights to EARTHCORE and ANCESTOR. A three-book deal became a five-book deal.

At the time, I had hit the jackpot. A five-book, hardcover deal with one of the bigs. It’s been a great ride with Crown and I love working with them, but the one thing I didn’t think about at the time was the deal tied me up for at least five years, probably more like seven.

The movie didn’t get made, the option expired. And my, how publishing has changed since 2007.

So, I’m still happily putting out books with Crown. I’m also happily putting out my own books: hardcover, downloadable audio, and eBook. By 2013, I’ll be done with Crown’s five-book deal. At that time, I estimate Dark Øverlord Media will have ten or more full-length eBooks of our own in all the stores. We’ll see if I sign with a traditional publisher, or decide that we’re just better off doing our own thing and selling straight to the end-reader.

Joe sez: There's a lot to like about Scott's story.

The first is his dogged determination. He refused to give up, even when getting repeatedly knocked down.

The second is his innovation. He saw an opportunity with podcasts, and he went for it.

Show me someone with an open mind who refuses to ever say die, and I'll show you someone making a lot of money.

I've been giving away ebooks for six years, and had the same experience as Scott: free leads to sales. Not to turn this into a talk about piracy, but I've always believed that the more readers you have, the more money you'll make, whether those readers pay you or not.

Remember the 10,000 Hours I talked about last blog? Scott put in his time. Now he's reaping the benefits.

Currently on Amazon, in the Horror category, the Number 1 ebook is Sigler's Blood is Red.

It amuses me to no end that #2 is Run by my writing partner Blake Crouch, and #3 is Trapped by some guy named Jack Kilborn.

It gets better. All top 8 horror bestsellers are indie. Indie authors are outselling King, Koontz, and Harris.

Even more amusing is that combined, Blake and I have 14 of the top 100 horror books on Amazon. Not just Kindle ebooks--but ALL books, including hardcover and paperback. And 46 of the Top 100 are self-published by indie authors.

The revolution hasn't just begun. It's pretty clear we're going to win.