Thursday, October 9, 2008

Self-publishing vs. traditional publishing:
the big dollar difference


Unless you are a superstar author , a traditional book publishing contract will pay a royalty rate of about 6 to 10% of the suggested retail price. There's usually a sliding scale based on sales volume with a higher percentage pased on higher sales. There may be a lower percentage applied to certain kind of sales, such as to book clubs or through off-price promotional deals. For the sake of simplicity, we'll pick a flat 8% and ignore any percentage that might have to be paid to an agent.

Let's also assume an initial print run of 5,000 books with a cover price of $20 each. If they all get sold, the book stores collect $100,000 and maybe $40,000 works its way back to the publisher through wholesale disributors who collect their piece of the action.

You, the smiling person whose name is on the cover, probably got a $5,000 advance against royalties when you signed your contract. Eight percent of $100,000 is $8,000, and since you already got $5,000, you just get three grand more. That's not much to show for years of blood, sweat and tears.

If you have to deduct taxes and an agent's commission, you'd probably be better off doing something else than writing books.

On the other hand, If you self-publish the book, and are willing to self-promote the book, the same sales volume could leave much more money on your table.

For example, using Print-on-Demand (POD) service from Lightning Source, your cost to print a 250-page paperback is a little over four bucks. Let's say it has a $20 cover price and you offer a 25% discount to Amazon.com. Amazon pays $15 per copy but your cost is just $4.15 per copy. You'll have a little expense for setup and shipping (I'm not sure about the shipping part -- I'll update this later), so you make about $10 per copy. If you sell 5,000 copies, you keep $50,000 before taxes -- infinitely better than what you'd get with a conventional publisher, and you get your money much faster.

You'll probably have to share a thousand or two with an editor and designer and at the beginning you lay money out instead of having an advance coming in, but if the book sells you'll keep much more money this way.

Keep in mind that when you self-publish, you (or someone you hire) will be responsible for doing all of the promotional work. But unless you are a superstar, it's unlikely that a traditional publisher would put much effort or money behind you anyway. So if you're going to have to push yourself, you may as well also publish yourself, and reward yourself.

If you believe in your book, self-publishing can be rewarding on several different levels. It's not right for everyone, and it's probably not right for a first book, but keep it in mind for the second time around.

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