episode they started a mail-order salad dressing business. When Lucy's husband Ricky asked her about the profitability of selling Aunt Martha's Old Fashioned Salad Dressing, Lucy explained that they lose money on each bottle of dressing, but they "make it up in volume."
Bob Young is the founder and CEO of pay-to-publish company Lulu.com. Maybe he should have watched the Lucy episode. He might have learned that Lucy's formula is flawed and he shouldn't use it in his own business.
Lulu says it "has more than 300,000 recently published titles and more than 15,000 new creators from 80 different countries joining each week." Despite those impressive numbers, it loses money each year, and now wants to sell about $50 million in stock to erase the red ink.
- Bob seems to be like his starry-eyed customers who spend a lot of money to become profitless "published authors." Bob has used millions of dollars from his personal fortune to become a profitless publisher. Is Bob the ultimate vanity publisher, publishing for fame but not for fortune?
- That sounds like a recipe for bankruptcy -- not a good way to impress Wall Street.
If Lulu is losing its shirt despite charging several times as much as other print-on-demand companies, and has a huge sales volume, something is very wrong. Bob Young was ranked as a "Top Entrepreneur for 2006" by Silicon.com and was nominated as one of Business Week 's "Top Entrepreneurs" in 1999. Apparently he's a smart guy. He should be able to figure out why Lulu is in trouble.
- Maybe its cost of doing business is too high.
- Maybe its employees are overpaid idiots.
- Maybe it's because its wholesale and retail prices are too high.
- Maybe it's because its website has a terrible search engine which makes it hard for people to buy books.
- Maybe it's because the company has a silly-sounding name.
- Maybe it's because its quality control is terrible. (It sent me a book printed on wrinkled paper.)
- Maybe it's because Lulu published one of the worst-looking, worst-written, worst-titled books.
- Maybe it's because customer support is terrible and customers get pissed off and leave.
- Maybe it's because customers realize that Lulu lies by saying it is “the only publisher that offers you all that it does for free.” Their publishing is free only if you don’t want any paper books to be printed or eBooks to be distributed! Lulu gets paid for every book they publish. That's not free. Lulu's notion of free publishing is like "free" car ownership where there is no charge to view your beautiful new vehicle in the dealer's lot. But if you want to actually drive it home and put it in your garage, you have to pay $54,327.
- Maybe it's because Lulu lies when it claims to rank #1 among self-publishing websites. If you use Lulu you may not be self-publishing because a big part of Lulu is vanity publishing.
- Maybe it's all of the above.
- With many small print runs of bad books, it's easy to lose millions of dollars.
- Maybe most of his authors are selling only six books each. And an infusion of $50 million won't help to increase the sales of crappy books.