What do the economics of publishing look like… really? (Photo: thinkpanama)
(Special thanks to my agent, Steve Hanselman, and my anonymous sources within the world’s biggest publishing houses)
Print is dead!
This has become a popular headline, and a great way to get quoted, as Nicholas Negroponte has shown. Iconic author Seth Godin, after 12 bestsellers, just announced that he will no longer pursue traditional publishing, and the writing seems to be on the wall: the e-book is the future, plain and simple.
But what are the real concrete numbers? How are established authors actually making money, and what should new authors do? Go straight to e-book?
In this post, I’ll look at real-world numbers to discuss some hard truths of publishing, explain economics and pay-offs, and provide a few suggestions for aspiring authors.
To start, some contrasting numbers…
– The 4-Hour Workweek is one of the top-10 most highlighted Kindle books of all time.
– The 4-Hour Workweek was the #1 business book when Kindle first shipped after November 2007, and is currently around #116 in the Kindle store.
– In my last royalty statement, December 2009, digital book sales (all formats, including Kindle) totaled…. ready?… a mere 1.6% of total units sold.
My own book has been on the bestseller lists for more than three years, and I’ve tracked most multi-month bestsellers for all of those 36+ months using Nielsen Bookscan (among other tools) which covers about 75% of all retail book sales since 2001, including Amazon but excluding discount clubs such as Sam’s Club. Titlez has also been useful for looking at detailed trending on Amazon.
This all gives me a good pool of data, and I feel like I have a good grasp of what authors are selling and… realistically earning directly from books. If you’d like to get a basic idea, just subscribe to Publishers Lunch to see what authors are getting paid as advances. Enjoy.
We’ll come back to the Kindle numbers, but first, here’s a sketch of book economics, incentives and options:
– For a hardcover book, authors typically receive a 10-15% royalty on cover price. This means that for a $20 cover price, the author will receive $2-3. If you have a $50,000 advance, a $20 cover price, and a 10% royalty, you therefore need to sell 25,000 copies (“earn out” the advance) before you receive your first dollar beyond the advance. This is the basic rule, but several quietly aggressive outfits — both Barnes and Noble’s in-house imprint (Sterling, acquired in 2003) and Amazon’s in-house print arms, AmazonEncore and AmazonCrossing — could prove to offer more attractive terms. Then there are the fascinating rogues like Andrew “The Jackal” Wylie.
– For a trade paperback book, authors typically receive around half the royalty of a hard cover. If you are making 15% on your hardcover, you might get 7.5% when it goes to paperback. Guess what? This means you now need to sell twice as many books to break even. I think going to paperback is a bad idea for almost all authors, unless you want to double your work for the same income. Do you really need the people who won’t buy a $20 book hardcover that’s already discounted to $12-14 dollars through Amazon or Barnes and Noble? I don’t think so, yet most authors follow the hardcover-to-paperback progression without question.
– Electronic books, including Kindle, do not count towards the most famous bestseller lists, such as The New York Times bestseller list. I suspect this will change within the next two years, but for now: print is what will make you famous in the mainstream.
– If you choose to self-publish but stick with print format and retail distribution, you might double your royalty earnings. This is based on conversations with friends who own their own boutique publishing houses, all of which have distribution in large chains like Barnes and Noble. It’s fun to imagine that you could print a book with a $20 cover price and pocket $15, but that isn’t how the math works out. Once you factor in retailer discounts and distributor percentages, you might end up netting 30% of cover price vs. 15%, if you’re lucky and have a print run of 20,000+ units (Can you afford the upfront cost, especially if retailers are paying net-30, net-60, or beyond?). Keep in mind you also need to manage things as a publisher, which could make your dollars-per-hour earnings less than with a traditional publisher. There are a few promising companies, like Author Solutions, trying to solve this problem for authors.
– If you choose to go digital only as an e-book, this is where profit rules and amazing numbers can be achieved. How amazing? I know one man who nets between $5,000,000 and $10,000,000 per year with a single e-book and affiliate cross-selling to his customer lists. I’m not kidding. The downside is that you need to be a world-class marketer and understand affiliate and CPA advertising better than anyone else in your niche (since there is little barrier to entry, and therefore plenty of competition). Prepare to be an uber-competent CEO or fail if you choose this option.
The Kindle Phenomenon — How Press Releases Are Misread
Amazon is incredible and I expect nothing but more innovation from them. Putting aside their coming bloodbath with Apple, though…
What of this announcement that Kindle sales have now passed hardcover sales on Amazon? I believe this to be true, but there are a few things I suggest we keep in mind:
1) Kindle books selling well does not mean that print books are selling poorly. In fact, it appears quite the opposite. From the Wall Street Journal coverage of the announcement:
Still, the hardback comparison figure doesn’t necessarily mean the end is near for paper books. Amazon said its hardback book unit sales also continued to increase.
It will be fun to see more precise Kindle sales when they are shown as a separate line item in Nielsen Bookscan, which should happen in the next year.
2) The top-five Kindle selling authors of all-time, over 500,000 copies each, are all fiction writers (including Stieg Larsson, Stephanie Meyer, and others). In the top-50 Kindle bestsellers right now, I counted just three (3!) non-fiction books. If you’re a non-fiction author, I’d think carefully before jumping the gun to all digital. Remember that comment about print being dead? What if we ask a high-level exec at one of the “Big Six” (explained later) about how print sales are declining?
Hardcover trend is mixed and dependent on hot books. If you are wondering about ebooks, commercial fiction is where you’re seeing the erosion. Paperbacks are ok. Mass markets are taking a hit.
What are “mass market” books? The NY Times describes them thus:
Mass-market books are designed to fit into the racks set near the checkout counter at supermarkets, drugstores, hospital gift shops and airport newsstands. They are priced affordably so they can be bought on impulse. There are other production differences in binding and paper quality (historically, paperbacks were printed on “pulp” and could fit in the consumer’s pocket). The format is often used for genre fiction, science fiction, romance, thrillers and mysteries.
Is it a coincidence that print impulse purchases are also the biggest sellers on Kindle? I don’t think so.
3) I believe (conjecture, yes) that the figure we are missing is Books-Per-Person. If you have a Kindle, as I do, how many books did you buy in the first week or two? How many unread books do you have on your Kindle? Unlike with print books, you don’t have to look at a stack of unread material like undone homework. Ergo, you purchase more digital books than you would ever purchase in print. If Amazon is selling 180 Kindle books for every 100 print books, I wouldn’t be surprised if 10-20 people are responsible for the former, whereas 80-100 people are responsible for the latter. This reflects that Kindle owners are buying more books per capita, not that paper purchasers are buying fewer.
Now, don’t get me wrong. There has to be some cannibalization of sales, and much of print will die eventually, but it will take a long time. Print is far from dead… and far from unprofitable. Despite the industry-encouraged myth that print has no margins, a hardcover book sold for $20, assuming no graphics or color, can often be produced for less than $2 a copy. With the proper economies of scale (unavailable to most individuals), the publishing biz can be quite a little cash cow.
Let’s cover some basics of traditional publishing next.
What “Traditional” Publishing Looks Like
Traditional publishing looks something like the following for non-fiction authors. For fiction authors, you need to write the entire manuscript first. Here are the five steps:
Step 1. Get an agent (best done through a referral from one of their authors).
Step 2. Put together a book proposal, which is like a business plan. It will contain marketing plans, your existing “platform” (who you can sell to or reach without publisher help), an executive summary of the book concept, and 1-3 sample chapters, among other things.
Step 3. Pitch to specific editors at different publishers through the agent and schedule meetings.
Step 4. Sell the book. The editor will probably have signing authority up to a certain advance amount, but higher ups will need to sign off on larger advances. If you don’t have a great platform for selling books without publisher help, don’t expect anything more than $50,000, and that’s being optimistic. The $50,000 will not be paid all at once, but in several installments, something like this: 1/4 upon signing the deal, 1/4 upon publisher acceptance of manuscript, 1/4 upon publication, and 1/4 upon paperback publication (assuming you start with hardcover).
Step 5. Write the book. Keep in mind, you’re not getting paid the advance all upfront, and writing a good book will probably take at least a year if you’re hoping to have good word-of-mouth and some longevity. I’ve been working on my new book for more than three years. I’ve spent this time because I want it to sell like mad for no fewer than five years after publication, preferably more than a decade if I update it on an annual or semi-annual basis.
For more detail and recommended books, which I used as guides, read “How to Sell a Book to the World’s Largest Publisher,” which explains exactly what I did.
Below are the “Big Six” publishers — most of the bestsellers you see come out of one of their divisions (called “imprints”). In no particular order:
Lagardere (owns Hachette)
Macmillan (owns St. Martin’s)
Random House (the largest, and where my book lives within the “Crown Publishing” imprint)
All of these publishers have iBook agreements with Apple except for one… Random House. Why? Is Random House just unable to see the obvious future? Nah, I don’t think that’s true. There are plenty of smart people working at Random House, and that includes their legal department.
The paragraph that follows is all hypothetical:
What might happen if the iBooks agreements of the other Big Five all have suspiciously similar terms? If there were a federal investigation, might that lead to charges of collusion among the publishers and have terrible financial consequences for an already fragile industry? It certainly would. By distancing themselves and coming in late to the game, Random House — again, hypothetically — would be playing a very smart hand, indeed.
For those of you who are devoted to your iPads (I do like mine), you can always use the Kindle app to read Random House books on them pretty screens.
So What Should Authors Do?
First off, writing books is a terrible revenue model for authors.
Precious few books sell more than 25,000 copies, so it’s unlikely you’ll make even $75,000 a year from book royalties. In rare cases, you might have a perennial bestseller, but this is less than 1% of all books sold and not a good bet to make.
There are still a few reasons you might consider writing a book and going through traditional channels:
– Speaking: Particularly in the business category, if you target your Fortune 500 audience well enough, you can stair-step your way into $20,000 per 60-minute keynote without needing a miracle. Hundreds, if not thousands, of authors earn this kind of money. The higher echelon can make $80,000 or more per speaking engagement. Needless to say, this adds up fast.
– Reputation and audience: Money is a means to something else. Not unlike wampum, income is traded for either a possession or an experience. If you use your book to build a reputation as a thought leader, and if you can establish a direct line of communication to intelligent readers (through a blog, for instance), it is possible to bypass income and get almost any experience for free or next-to-free. The middleman of currency is removed, and you also have access to things money can’t buy, whether it’s interesting people or unusual resources.
Though I have done high-level speaking and enjoy it with the right audience, I typically do fewer than a dozen engagements a year. I prefer to focus on connecting with my readers and having fun with cashless adventures.
How do you build a base of fans or supporters and build a high-traffic blog? Here are two detailed closely related case studies:
How Does a Bestseller Happen? A Case Study in Hitting #1 on the New York Times
How to Create a Global Phenomenon for Less Than $10,000
So what of self-publishing versus the more traditional route?
Reputation, at least in the mainstream and for the next few years, is difficult to build if you self-publish. In the below five-minute discussion, NY Times bestselling author Ramit Sethi and I discuss the pros and cons of self-publishing vs. getting a “real” publisher:
For established and successful authors, like Seth Godin or Jim Collins, self-publishing in print or digital is a supremely viable option. Jim Collins self-published his last print book, How the Mighty Fall, and was featured on the cover of BusinessWeek magazine to help push it up the bestseller ranks. Seth could do the same.
Why is this possible?
Because they have incredible reputations that were built, in part, on top of the traditional publishing machine. The Big Six and their close cousins are in real trouble. Some of them might adapt (which will include massive lay-offs), but most will not. In the next few short years, there will also be many interesting publishing alternatives for aspiring authors.
But, all that said, there is still real value in having the rare stamp of approval that a “traditional” publisher provides. I don’t think this will change much in the next 12 months, perhaps even 24 months.
Now, a handful of first-time, self-published authors hit the New York Times list, that’s an entirely different story…
Recommended reading – Below are the three books I’ve suggested to a dozen or so aspiring-author friends. Almost half of them later hit the New York Times bestseller list. Reading these doesn’t guarantee that outcome, of course, but it will help:
The 22 Immutable Laws of Marketing (to help you craft the right message and themes)
Bird by Bird (to help you write the damn thing and not shoot yourself)
Author 101: Bestselling Book Publicity (to help you reach and excite big media)
Afterword: Book Format and Multimedia Books, etc.
In the comments below, I was asked the following question:
“Tim, I have a question… Before I decided to self-publish, I got a couple decent offers from traditional publishers, but they all involved 10+ months of lag time between when everything is ready to actually print and when they would actually print. I’m not nearly patient enough for that much delay. Is the world of “real published authors” really limited to people who are comfortable waiting around a year for their book to manifest?”
My answer addresses a few other common questions I get:
With the big boys, yep. That’s the lag time in production. I actually kind of like it. Allow me to explain:
It forces you to think about your material and attempt to make it perennial. Which advice will be obsolete in 12 months? Delete. Which advice would be obsolete in 24 months? That means it will only be good about 12 months after pub date. Delete.
I find that it helps refine your thinking, just as having the content in a fixed form (print) forces you to consider your writing and editing more seriously than if you could change it willy-nilly like a blog post. There are certainly benefits to the multimedia books on the horizon, but I wouldn’t call them “books”, and I think the bells and whistles of video, hyperlinks, etc. will be used to mask sloppy thinking as often, if not more often, than they will be used to create a more compelling argument or presentation. The wordsmithing and precision of the language will suffer with the crutches of embeddable video, etc. Will they make perfect sense for some books? Absolutely. Will they distract and detract from the flow of the prose, story, or argument in most cases? Absolutely.
To me, “timely” books are a bad bet for writers. If the content delivers value based on timing near recent events, other media have it beat. I think long-form books should have a longer shelf life, and therefore require harder thinking throughout the process to ensure the content has value 1 year, 5 years, even 10 years down the line.
Hope that helps!
The Tim Ferriss Show is one of the most popular podcasts in the world with more than 900 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.
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278 Replies to “How Authors Really Make Money: The Rebirth of Seth Godin and Death of Traditional Publishing”
Two words: good sh*t
Fantastic article. I’m writing several short “books” to publish. Since I already have a collection of fairly popular websites, there doesn’t seem to be a reason to not sell them at a profit.
Do you have any thoughts on pricing for an ebook?
Great information! Once the model for self-produced music took off, it stood to reason that the print industry would follow suit. Bands never made money from records, it was the touring and merch that always made them the most cash! By the time the record company is finished, there isn’t much left for the artist.
Awesome article Tim,
I still prefer holding book or even a magazine in my hands when I’m reading compared to staring at a screen – I like how you added a few benefits of getting published in there as well…
I started a blog about a year ago with the intention of eventually coming out with an ebook. I wanted to build a following on the blog then sell the ebook on the blog + on a sales page.
It just made more sense financially to write an ebook, getting published has always been a dream but financially an ebook made a lot more sense.
Anyways thanks for the article, you always have great content on here. Excited to read your next publication…
Excellent. The implication is that, over time, if all the profit is in e-books and all the customer acquisition is in blogs, speaking, etc., there is less and less reason to run the print gauntlet.
Leo Babauta might be an early example of this — he built reputation via blog, and generated revenue via e-book, and published a print book only later.
“I know one man who nets between $5,000,000 and $10,000,000 per month…”
Whoa… nice numbers.
Are we talking self-help/business development titles here?
Almost sounds like ‘The Secret’ sales figures.
This post couldn’t have come at a better time, Tim! Since I am currently outlining my first book, this stuff is gold.
The thing I find unappealing about electronic books (and I hear this from others), is that a Kindle or iPad doesn’t give you the full experience. There is something magical about buying a new book, feeling the paper as you read it and ultimately spending years afterward glancing at the colorful spine on the bookshelf. Conversely, an e-book sits as a boring digital file in some random computer folder. And once read, never to be enjoyed again.
I feel that, while print may be dying, it will never be down for the count.
Thanks for the post Tim, another great one!
That’s true Brad, but I only like the experience from older books you find at second hand shops. I hate the paper of the newer books printed in the last couple of years – they fall apart too.
I was a late Kindle convert, being an obsessive reader my whole life. I will still buy second hand books, but not new ones anymore.
Great and detailed post, dude!
I am in the process of writing a novel which I intend publishing during 2011, so this helped give me a clearer picture of the publishing process. I have written several marketing e-books and they all did very well, especially when you consider how little investment it took to get them out there.
I really appreciate your post.
All the best,
I’ve written several books, and I’ve had no interest from agents or publishers…primarily because of my lack of a strong platform. Rather than becoming frustrated and continuing to hit my head up against a wall, I decided to find a workaround.
I’m now publishing my own work, and it’s getting a great response.
“Lost + Found: Finding Myself by Getting Lost in an Affair” [URL removed per comment rules] was launched two weeks ago on Amazon as a paperback (Kindle launches tomorrow), and it’s completely grassroots. It may be slow, but it’s impacting the lives of those who read it…and it’s leading to speaking engagements.
If you have a message, there are plenty of ways to get it out!
I suppose it’s a good thing I am a internet marketer(inspired by you originally). Therefore when I write my own book I will be able to make a nice profit via an ebook and affiliates promoting it.
I’ve always been curious how the book printing business worked. Thank you for the peek in. Don’t worry I won’t tell anyone you let the cat out of the bag
Thank you for the insight. I’m really curious how the landscape will evolve when tablets get more and more mainstream. Even with the iPad and Kindle craze, the amount of people who read from tablets is insignificant compared to how many people can read printed media. From the media buzz, only Apple seems to target every Tom, Dick and Harry.
Woah! Thanks so much for all the info. Book publishing always seemed like some big secret that I just couldn’t seem to learn. Self-publishing seems the most profitable and “automate-able” but hard as hell to market. Would you think that selling an ebook ($20) on a sales copy website to be a good idea? This way it could be automated, and you would retain (almost) full profit? Possibly use adwords and such to generate traffic?
I have a non-fiction book, been stuck with it for a while as I was unsure what the hell to do, you helped allot tho, thanks!
Really interesting post. I’ve always wondered how the book publishing world works, and you gave some great insight into that madness. I’m still not sure which route I’d go, If I were to ever write a book. Traditional, or digital. Hmmm?
Personally, I’ve lost interest in writing a book. There are so many books (both in print and digital) being released every day and I feel they really cover most topics well enough.
I’ve instead put my energy into creating life experiences and enjoying that ride. If a book comes of it, I’ll let it happen organically, If no book comes of it, I’m sure the world will go on fine without a book from me. Having said that, the one book I am looking forward to is your book Tim, I think we are just now really tapping in to what we as humans are really capable of and I’m eagerly anticipating reading “How to become Superhuman”. Jan 2011 right?
Also, I loved this thought:
“Money is a means to something else. Not unlike wampum, income is traded for either a possession or an experience. If you use your book to build a reputation as a thought leader, and if you can establish a direct line of communication to intelligent readers (through a blog, for instance), it is possible to bypass income and get almost any experience for free or next-to-free. The middleman of currency is removed, and you also have access to things money can’t buy, whether it’s interesting people or unusual resources.”
Great read man,
I’m so glad to see someone stand up to the hype that Godin’s decision brought. While I think he says some amazing things, I look at the stack of books that I’ve bought just this year (all physical, none electronic) and can’t help but think that I’m not the only one buying. Thank you for taking the time to put together some real numbers and logic to counter what everyone in the online world was saying. I didn’t think it seemed right to just say “print is dead” because of one man’s decisions.
I agree with the reasons for writing a book. I’ve never actually thought that they were a way to get rich but rather a way to get to getting rich. Speaking engagements are my main reason for wanting to write a book within the next 2 years so I’m excited to see you list that as a viable reason for writing. I think it’s a no-brainer to agree with the reputation reason also.
I’m curious to see how the printing industry and the book selling industry will adapt (or fail) in the next few years. I think it’s ludicrous that you can buy a book online from Barnes & Noble at almost half the price of what you can from their stores. For example, the expanded 4HWW was $22 in store…but I got it for $12 online (sorry for that cut in your profit).
I’d be curious as to what your thoughts are on the retail side of printed books. Do you see the mega-bookstores having a bright future or will they have to adapt severely too? What about the price disparity between online and in-store books at the same company?
Love this article and will be sending it to a number of people!
Thank you for the comment. I agree that it’s fascinating how many people have — I believe — misread and overhyped what Seth has said. I don’t think Seth actually believes that print is entirely without value. I would agree that “publishing” as we know it will die before print will, however.
What about the publish by demand model? Do you have any thoughts/experiencies about it? It seems to be a good alternative to new authors.
Regarding the iPad, I expect a new type of books, mixing videos, more interactive graphics. For students, or college students, it could be great to have access to a biology book, loaded with animations of the DNA, cells, etc… That would move forward the engagements of students and the way of teaching.
Yep, I think if you want to go into speaking (as I do), a traditionally-published book is the best way.
It really helps to have a popular blog first. As my blog has become more popular, I’ve gotten a lot more “So are you writing a book?” type of questions. Now my readers are starting to offer to connect me with agents. It’s an interesting turn of events.
However, just like how only 1% of authors will get to the “bestseller” stage, 1% or fewer of bloggers will get to the stage where their blog becomes a book. I’m on that path, but it hasn’t been easy.
Thank you very much Mr. Ferriss. Tons of great information for authors here! I’ll be coming back. Have an awesome week!
It’s really hard to know how fast the print industry is gonna change. Unlike for the music industry which was using an already digital format, the paper will probably slow their logical destiny.
I think in 50 years you’ill only have very specific content or rare books on paper, everything else will be digital.
As you mentionned, you don’t get published for making money but you didn’t talked about lifestyle. What about living like an author ? I know that it can be exciting to live from your writing.
PS : I’ve adapted Ramit’s book for the french market and that was fun anyway 🙂
Thanks for the detailed post! I was considering the publishing route, but things are working out really well self-publishing for me. I worked to make my blog popular over one year to get the traffic and reputation, then wrote the book and “published” by e-junkie. I am now totally supporting myself from sales of that book (still making the per-day sales to cover my expenses).
While the extra reputation from being a known printed author would be welcome, I find that it’s easier to work on that reputation online. It definitely wouldn’t be as extensive as Tim’s NYT Best seller list, but I have actually been recognised in the street several times from blog readers – once the reputation goes offline, it doesn’t matter how it’s happening 🙂
I was very curious to read these figures (why I @ed you on twitter when you asked if people had queries), and I suspected the advantages would be more reputation based than monetary. As you say, self publishing will be big in a few years, so if you do it right early and focus your energy there you will have authority as a self-publisher when times change to favour them more 🙂
Published my first book in ’06. Broke even on the pre-orders while in production, which was a bit of a challenge and a nice surprise because I printed in the USA, custom hardback and a low first run (so no super sweet bulk discounts). Now it’s all profit, save a small % to PayPal. I can’t live on it, but it’s one piece of the puzzle and I don’t have to deal with conglomerate shenanigans and perpetuate the media circus. I find this valuable as both undermine my goals in the long term.
What I would most like to see is the “different strokes for different folks” mindset put to extreme use, i.e. each author publishing in a unique-yet-sensible manner suited to their position and work.
So look to your strengths, authors. And good luck! As to readers and audiences, my hope for you is to look beyond the conglom media machine and buy direct from worthy professional artists and authors. The NYT list is hardly an indication of quality, after all! i-D
If you’re interested in speaking check out SpeakerWiki — it’s a free/easy way to get in front of lots of event planners.
Holy hell, Tim. This article is literally overflowing with one useful fact or resource after another. I’ve gotta echo x2far in how impressive those self-publishing numbers are for your friend’s eBook.
One of the biggest surprises is the “1.6% of total units sold” return on all digital book sales. We’re talking an incredible decrease in overhead when it comes to storage, shipping and general maintenance. Pirates are handling all this for free at this very moment. Even taking into account the decrease in price for an eBook, the percent-of-return is almost irrational at that low of a number. It’s definitely not inspiring for a new author to go with a major publishing house if they want to go the eBook route.
At the same time, I love that eBooks have made a big push. The iPad and Kindle 3 are both awesome readers and I can’t wait to get my hands on one. I’ve never liked storing more than a few books and try to give them away once I’ve read, re-read and memorized them. Also, as a traveler, having an entire library on-hand (including the many public domain PDFs) means always having plenty of reading options… no matter what horizon I find myself on.
Great post Tim!
I wanted to let you know that I saw The 4HWW in paperback when I was in Taipei, Taiwan in December of 2008.
Kicking myself now for not making the purchase 🙂
I know one man who nets between $5,000,000 and $10,000,000 per month with a single e-book and affiliate cross-selling to his customer lists.
Mind telling us more? Is it Eben Pagan?
I hope to have much, much more to say about this, but I can’t disclose his name without his permission. Eben does incredible things and knows how to do this, but I’m not referring to him here.
So Tim, you’re an established author and world-class marketer. These are the prereq’s for self-publishing. Yet it sounds like you intend to publish traditionally. Why do that when you admit publishers only bring “reputation” to the table?
The distribution piece is also non-trivial. That will shift as more digital (and print via online) move to dominate the sales channel, but retail still moves 50%+ of my books.
Thanks for providing such a detailed and straight-forward post about publishing. As an aspiring author I’ve relished the idea of actually being published, but have never really been able to wrap my mind around how the process actually worked.
I love you’re posts and am always excited to see what’s next. Keep up the inspiring work!
Yes, I do work at a newspaper (a “withering industry”) and every week or so, the editor walks by to hand off yet another story we need to print on the “death of publishing.”
Kinda reminds me of an old cartoon from the mid 90’s where an art director walks into his artists’ studio (they’re all working on Macs) and announces that he’s got another layout to be made on the death of the Mac.
I don’t argue with the figures above. Authors make much more on self published pdf files. But don’t discount paper just yet. I believe their will be a market for books, magazines and (yes) newspapers for some time.
. If you use your book to build a reputation as a thought leader, and if you can establish a direct line of communication to intelligent readers (through a blog, for instance), it is possible to bypass income and get almost any experience for free or next-to-free. The middleman of currency is removed, and you also have access to things money can’t buy, whether it’s interesting people or unusual resources.
What kind of cashless adventures has this blog made available to you? Inquiring minds want to know 🙂
I would like print publishers to consider paperback-only releases, but charging close to traditional hardcover prices and paying authors hardcover percentages. As a reader, I’m happy to pay for content and to support the authors, and have books that are less bulky, easier to carry around, and require less natural resources to produce. It’s an all-win situation, IMO. (I’d buy a paperback over a hardcover book even if they cost the same, and I suspect I’m not alone.)
This is a great point, and I totally agree.
I admire time and effort you put in every article. This stuff is great. I can see a big shift coming, and authors like Seth Godin are even accelerating it.
I’m starting an e-book publishing company in Poland (problably first one without the option of buying print version in the country), and will be lunching soon. I can already see the trend and I’m willing to push it, co it comes sooner.
The real threat to print version is publishing e-books yourself (what can be faster and easier?) and earning up to 70-80% on every sale by powerful authors like you Tim or Seth Godin. I can already see more will follow and the change will accelerate.
Any comments on how self publishing fares on Amazon, etc?
Excellent–and timely!–post; I really got a lot out of this.
As a writer/publisher of only e-books, it certainly is without the hassle of traditional publishing, but also without the prestige.
I would venture to say that, for the time being, the point you made about fame coming easier via “real” publishing is quite true. It’s harder, certainly, but also comes with greater prestige; and for me, that is something to be valued, and something worth working for.
There’s a difference in the feeling, as well, I think. Writing for Men’s Health/Men’s Fitness and writing for my blog are very different, and *feel* very different; notwithstanding that I might cover similar content and–lacking an editor’s word limit–I might go into greater depth on the blog.
“Real” publishing is a nice feather in the cap, I feel.
Great job, and thank you for this piece.
I want to run a different model of publishing by you. I read the Godin piece, and had a completely different reaction. It’s not just the publishing industry that’s become obsolete, but books themselves.
A book is a static snapshot with a predetermined beginning and end. We can do much better these days.
Here is how I imagine next generation publishing: The author continuously streams content, recombining it into larger, more comprehensive chunks, eventually building into a fully interlinked wiki. He thus gains rapid feedback, spaced repetition for his audience, and a complete non-redundant gestalt of his work.
For example, twitter=>posterous=>email newsletters=>blog posts=>wiki.
I imagine that all this content will be Uncopyrighted, permitting maximum dissemination and encouraging attribution. See what happened to Steve Pavlina – the Secret took his ideas but didn’t attribute, and might have if he hadn’t used a copyright.
I think advertising and partnerships makes more sense as a revenue model than an attempt to charge for publicly disseminated information.
I don’t think I’m wrong about ebooks, but maybe print is an exception. How do you think Uncopyright affects the marketability of a book to traditional publishers? Will they refuse your book, or will someone else publish it and take the profit, or can you negotiate a promotion partnership with the publisher in which your only benefit is fame from gaining more readers?
Charles Stross recently did a 9-part write up about the publishing industry from his perspective of the SFF market. Really insightful and touches on digital publishing.
Starts here: http://www.antipope.org/charlie/blog-static/2010/02/common-misconceptions-about-pu.html
Incredibly interesting read, Tim.
I believe you’re right when you say that the self-publishing route is the way that most established authors should / will go. For example, Seth could release self-published eBook’s until the (purple) cows came home and make excellent money from it, I am sure.
But, as someone that is actually writing his first book right now, I have to say that there is something that appeals to having your first ‘work’ in that hard back version. The feel, touch and smell of it…
Either way, a great piece and I am sure the comments will light up on this one.
All the best,
Great and thoughtful article!
I think that classical books will reign for quite a while, but in the near future we’ll see some great things achieved by people with no publishing background, but with great social media influence (example popular vloggers and bloggers). Web 2.0 ftw! 😀
I own a Kindle and will regularly buy both the electronic and paper version of books that I thoroughly enjoy and would put on my bookshelf to share. Most of my friends who own e-book readers are the same way. But I have a bone to pick with you- your florescent orange book cover is throwing off my furniture colors. tsk tsk
Tim, thanks for all the pointers to ressources. Just yesterday I was thinking that I should maybe write a book about all the stuff that flies around in my head…
Life is too short and Time is too precious to waste on thinking alone. You thought about it, now it is time to take some action. Make it a reality Nico. No maybe. Just do it.
Thank you! ‘Coz I was really fed up with all this hype around the web about printed books disappearing in a matter of years, and nobody giving us some real numbers on that statement, just their “unbiased” opinion.
In response to CrunchGear’s article from 23 august I say that user experience of reading a real book is engaging a lot more senses like tactile, smell, hearing, sight (compared to digital print tickling only one sense ) and therefore there should be a demand/market for paper-books many years to come. Sure digital is changing the market, and will continue changing it, but come on, easy on the drama please. Thanx again for this article. 🙂
Two questions – if the author gets 15% of the cover price for a hard back, is that 15% of the price printed on the cover, or what the retailer sells it for?
Secondly, Kindle/iBooks. Is the margin for an author like a hardback, paperback or something different?
Just curious on what the economic model is evolving toward (as the true distribution and stock holding costs start to ebb away for eBooks).
Thanks Tim for this usefull information!
I think, that the print-on-demand technology is going to have a big impact on the industry. The traditional work of publishers, namely to produce 1000 books at once and then try to sell them, which swallowed a lot of capital, is going to disapear. Instead, books are going to be produced just-in-time. This is also going to be a great opportunity for authors, as they are not as dependent on big publishing houses.
I find that every person I’ve spoken with who claims an e-reader could never replace the “feel” of a real book in their hands or the “experience” of turning a page has never actually spent a weekend with a Kindle or any other e-reader. When I ask why haven’t they tried it, they screw up their noses and simply repeat what they assume the e-reader can’t do. They never give it a chance. If they did, they’d find out what the rest of us found out – the delivery disappears; it’s just the story and you.
” ultimately spending years afterward glancing at the colorful spine on the bookshelf. Conversely, an e-book sits as a boring digital file in some random computer folder. And once read, never to be enjoyed again.”
This is so untrue. I’ve re-read my digital books many times. I highlight them, bookmark certain sections, and refer back to passages just as I would do with a traditional book.
The difference? I can own a few thousand books without actually dedicating most of the walls of my house to doing so. I don’t have to worry about dust, moths, mice, or unexpected tragedies like fire or floods destroying my precious collection. I don’t waste one single second of my time and effort keeping those books clean and dust-free – time that I truly *need* to spend elsewhere and now can, thanks to ebooks. I never again have to try to squeeze enough books for a vacation into a suitcase or weekend bag, nor do I have to lug the heavy things around. When I need to get to a particular quote I remember, there’s no flipping endlessly through pages looking for it – I simply type in a word or two and search. 20 seconds to find the quote versus up to ten minutes finding it in a “real” book. I don’t have to pay extra money to box them up and break some mover’s back anytime I change homes.
I’m not a print-book hater. I’ve been a voracious reader all of my life and have surrounded myself with books in every room. I love the feel of a book in my hands. I love the smell of the paper.
And without a doubt, I cannot wait to get rid of the 1,000+ books that I own and get them all in digital format. So an e-reader doesn’t smell like a print book. So what? That’s not worth the absolute freedom that an e-reader gives me, and the incredible amount of space, time, and peace that will be given back to me once the collection is replaced in bits and bytes.
Point well taken. Portability is a huge factor here.
A have a few comments. First off, the “Print is Dead” headline is a funny one because it’s (obviously) far from true. Just finished Seth’s post and he didn’t mention anything about print being dead. He’s just pointed out that the traditional publishing route isn’t necessary for HIS message to reach HIS audience.
Second, I bought a Nook (eBook reader) last month and went on a bought 2 “real” books from Amazon this month… Even I was shocked. lol There are still a ton of books that aren’t available via eBook and books you’d rather have in your hands.
Third, Seth’s situation is awesome, but not really applicable to anyone else. It’s like when Prince gave away a new CD in a London newspaper. It was a very interesting example of the change in the times but… Practically no one else can get away with that.
If you choose to go digital only as an e-book, this is where profit rules and amazing numbers can be achieved.
This kind of stuff is what interests me the most. Not just that huge number either. List building, cross-promoting, affiliate marketing, digital product selling, etc. A very nice existence can be created around stuff you’re truly passionate about once things are setup right.
Fifth, a question. I understand that you have the blog and there’s email form on the front page, but… How come there isn’t a Tim Ferriss email list which… OK, scratch that question. 🙂 Like Seth, you already know how to reach your readers. OK, a different question. Why not setup some kind of 4HWWcon? It could be the SXSW of lifestyle design. 😀
Finally, awesome post. I want to “write a book” but it really isn’t about writing a book. What I really want to say is I want to “spread an idea” and if traditionally printing a book is an efficient was of spreading that idea, then I’m all for it.
Agreed that Seth never said print is dead, though he implied the format was hard to spread. Physically, true, but I don’t think the content need to start digital to spread digitally.
For email and conference ideas, keep an eye out in the next year 🙂
Cheers Tim, an incredible resource for people interested in the publishing game. This has saved me many hours of work so my thanks.
Out of interest, your new book, I guess it is the health one on being superhuman, three years seems an incredibly long time to spend on it even though I understand you want it to sell like crazy. Would it not just have been better to launch it a few years earlier, create two years worth of revenue and then update it over the duration?
Either way, looking forward to it.
Timster, have u seen this site: http://www.blurb.com
Your headline caught me and I was excited (as usual) until I realized that (as usual) you had failed to take popular fiction into accout.
These models can’t work with genre fiction. Public speaking to build your platform, for instance, isn’t a viable option. Speak about what and to whom? There’s no platform there. In genre fiction you’re putting out (for some authors) a book a month. The platform is constantly shifting.
As a fiction author who worked up to full time writing via the ebook industry (which, for the last ten years, was where the former New York mid-list relocated to), wrote full time for 14 months, then just had to take a crappy $9/hr day job because stupid long tail economics (http://en.wikipedia.org/wiki/Long_Tail) just killed off my monthly royalties again, I find your post completely unrealistic as far as fiction is concerned and have a hard time even finishing reading it. I think you need to put a proviso in the front end of it. NOT FOR FICTION AUTHORS. We have a whole different set of problems to deal with.
I’m a non-fiction author and know very little about fiction. If you’re a fiction writer, your options seem to be:
1) make money from book royalties
2) make money teaching at a writing program
3) selling a movie option
4) writing and selling a screenplay
5) creating a muse of some type
Very interesting post, thanks from a fellow japanophile.
An additional revenue opportunity for authors with a following are paid membership websites. These sites are an opportunity for authors to create recurring income, build a captive audience around their expertise, provide more in-depth interactive content and lastly facilitate connections.
Though not solely operated by Chris Brogan, the Third Tribe is a membership site he’s involved in, which got immediate traction and converted into paid members from his passionate following.
It’s likely you’ll see more and more paid membership websites from authors and publishers if the technology can be sorted out and simplified.
Hey Tim – great piece. One thing that may help the transition from print to digital and digital back to print is something the music industry is sometimes good at.
Buy the physical, get the digital.
When you buy a physical CD, you can rip it into iTunes, thus having the piece of plastic and the music on your all encompassing iPod. I love heading into a big bookstore and getting the physical copy, but I wouldn’t mind having it on my Nook or iPad for travel or convenience.
Could help explode digital even further and help get physical copies off the shelf.
Thanks for the post. As an author with a relatively small niche audience I have found success by simply self-publishing and using my blog/website as a means of promotion/sales. With a limited audience (studentst seeking employment with the Big 4 accounting firms) traditional publishing did not make sense. I am not SEO-savvy and spend zero on advertising. However, I’ve spent the time establishing my brand as a thought leader in my niche market and have used every free resource available to provide value (i.e. online article repositories, industry message boards).
I was working on the original manuscript when I first read 4HWW in 2008. It inspired me to just get it done on my own. I don’t live off book sales, but it has certainly helped my income, and I’ve sold thousands of copies. Now, I hope to duplicate the formula for a couple other works.
Congratulations on your muse success! There is no reason to start with a wide market, and — as you’ve noted — there are many reasons to do the opposite and go highly niche.
Best of luck!
Fabulous post…for the nth time. Straight-forward, no-hype and well-rounded. (That sounds like some lame attempt at complimenting your genius….but can’t find more suitable words at the moment – my coffee hasn’t hit yet.) LOVE this blog.
Thanks for a fascinating insight into the world of publishing. Great to get some hard facts on figures.
Do you have any tips on DVD publishing? (or know anyone who might be able to help…)
Not sure if it was the first time Seth Godin mentioned that he wasn’t going the traditional publishing route, but watch him talk about this topic and more with my interview with Seth back at the World Innovation Forum in June 2010 – http://www.youtube.com/watch?v=L1Xr8Sxcj00
Tim – Love this article and such great timing with it as I just started pushing an eBook. This will be my second attempt but also a real chance to learn how to automate income while providing a helpful product.
Not only is traditional print media on it’s way out, but because of that it also proves a point that anyone who is an ‘expert’ on their subject can start to build a personal brand and share their knowledge. This is a scary thing but it’s also an enormous opportunity.
I’d be willing to bet your next royalty statement for your book shows higher earnings from digital mediums.
The Kindle is one luxury I like taking on my travels, because I don’t have to settle for the meager and expensive books in international book stores and can just try and buy over my Kindle almost anywhere for free.
And yeah, I overbought books. Thanks for gathering the facts, and the e-encouragement since I plan on releasing e-Books soon!
Yep. Those that cry “traditional publishing is dead” are clueless.
I thought I alone had to champion this message: most people want to own real hard copy books.
Those in tech (like Seth) forget that most business is still done in the physical not virtual world. My advice: do both. I call it uncommon common sense.
You are still talking of books as written text, don’t you think that there are going to be completely new markets and opportunities as books naturally evolve into more multi-media experiences?
A book should be a community including forums, video, images, user-generated content, updated case-studies etc. I don’t think publishers or brick and mortar book stores are in a good position to shape the future of books or profit from them.
I think books cease to be books at that point. I might right more on this soon, as the changes of the format are important.
I spent about a year working with a tiny book publisher. They put out several business titles. Most didn’t sell anywhere near what people had hoped, but the authors didn’t mind. Why? Because they used these books as marketing and promotional tools, a way to establish credibility and authority.
Used like this, ebooks just don’t have the same punch. The barriers to entry are lower…and they’re harder to give away at speaking engagements and conferences.
Perhaps ebooks will remain the domain of fiction writers.
Thank you for such a thorough post. And for doing that pesky math. That said, obviously, I’m not the CEO/CFO/producer mix necessary for self-publishing.
However, I like to think I’m a good creator/huckster mix. So, maybe that’s not such a bad combo to start?
Despite all the “books are dead” headlines, I had a suspicion that a writer’s career is best started out along the traditional publishing path.
Anyway, thanks again for a great post that I’ll spread around my writer’s groups.
You’re crazy man! This article is unvaluable! It’s clear as a blueprint. I’m not planning to write a book or a ebook anytime soon, but what you wrote is indeed fascinating.
Thanks very much for your constant effort to improve our way to look at the world around us. Life is really full of opportunities!
Enrico (tango dancer)
Wow, excellent and well articulated points. I think Seth Godin can make this statement and quit the print publishing industry for 2 reasons. 1 – He’s Seth Godin, and he’s already got an audience to market to no matter how he chooses to do so. 2 – He’s still going to be making royalties from his 12 books forever, so he’s most likely not NEEDING to increase his income. He also has consulting, speaking, Squidoo, etc.
For the vast majority of published authors (including myself), the traditional publishing industry will still be the primary way to build a name for ourselves and make the best money we can through publishing.
Best post in a while, two thumbs up.
I’ve only read one e-book in my life, in my smartphone, and I think I won’t do it again until buying and ipad or kindle, which I am not much into unless they solve some several issues they’ve got with their platforms. The books aren’t that cheaper neither *vs. print*
Also, just a comment, for the spanish speaking world this is very unlikely to happen (shift from print to digital) in the near future, for economic reasons, not much of the population is able to grab an ebook reader…
Robert Ringer wrote and self published three #1 NY Times best sellers in the 1970s.
Can you please tell me more? If you know of any links, that’d be great. I ask because his Wikipedia page is lacking and it appears at least one of his most famous books was published through Fawcett, which is now owned by Hachette.
Where was this post a year ago when I was struggling getting “Financial Mistakes of New College Grads” created? I guess when the student is ready the master appears…
As to the Kindle economics, I agree with the paucity of them. FMNCG has popped into the top ten in niche several times, yet my royalty checks have had the same number of digits on either side of the decimal point. Yet the potential is there for books with legs to achieve something significant.
I enjoy reading what you write – I find it informative and engaging. I have your book and read your blog regularly. I also buy books compulsively. However, in this case, I am also in agreement with Cecilia Tom’s comment. The statement “Do you really need the people who won’t buy a $20 book hardcover that’s already discounted to $12-14 dollars through Amazon or Barnes and Noble?” seems arrogant. Doesn’t every author need every reader they can get? I find it hard to believe that a person that put all their effort and time over months (or years), into writing a book, wouldn’t want the largest auidence possible. Not every author’s book becomes a instant bestseller.
@Cecilia Tom and @Jennifer,
I understand how you would feel that way, namely that it sounds arrogant if I say “Do you really need the people who won’t buy a $20 book hardcover that’s already discounted to $12-14 dollars through Amazon or Barnes and Noble?”
This isn’t an issue of having or not having money. Anyone who can afford an $8 or $9 book can afford a $12 book. In my experience, the people who nickle and dime on price and complain about such a small difference and the same people who add little to the conversation other than headache.
Again, it’s not a money thing. I’d love nothing more than for people to read my books in libraries if that’s all they can do, or if it’s what they prefer to do. I’ve given my book to libraries specifically for that purpose.
Tim! Great post thank you for breaking this down so well with so many jumping off points/references. -Rhea
First, I try never to take the advice of someone who has no skin in the game – and Seth is playing by different rules than virtually everyone else – so his decision/manifesto that he’s post-print is a personal realization. He’s got the illusive platform to make a go of things. For almost everyone else, this isn’t a great idea for the reasons you’ve clearly laid out above.
Second, much like the “death of retail” when superstores (and then warehouse clubs and then e-commerce) arrived on the scene, I’m guessing that hardcover books will outlive those who predict its demise.
I’m in the very early stages of this process of discovery – my book is coming out in March (one of the ‘Big Six,’ happy to say), am working feverishly to build the right platform and looking at the ways you’ve listed above to monetize the event outside of royalties. One additional corrollary is workshops and seminars – I think Michael Port has done a good job in turning his “Book Yourself Solid” property into a veritable franchise and his is a good model to follow if you’re looking to turn your book into an ecosystem.
Thanks for posting this – all very solid stuff and helpful.
Very good points, and agreed on Michael Port. He’s done a phenomenal job.
I’d like to move more towards ebooks. We have so many paper books that they’ve devoured one room. Going digital sounds so much cleaner. Your “undone homework” remark is right on target.
Two things have limited my family’s use of ebooks. First, they charge too much per book. Typically close to full hardcover price even after the paperback is out. This for a file that’s locked to my account so it has no pass-around value. Lovely. Note that this is starting to change a little. It makes more sense to have ebook prices track whatever stage (hardcover, paperback, mass market, etc) the paper version is in.
Second, the lock-down (also called “DRM”) is a big mess. If I want to buy a book from one store and then read it on another’s preferred hardware, I might have to break the digital lock (illegal in some places) and probably convert the format too. Same for the ebook system that most public libraries in the USA have chosen. It seems to be useful only on computer screens and a few low-end reader models.
Even worse, ebooks tend to be in formats that will be obsolete and unreadable eventually. Imagine having a century of literature just vanish into the void. At least with unlocked books in a documented format there’s some hope. If anyone cares enough about a title to try to preserve it.
Those new $139 kindles are starting to look good though…
I think you’ve added at least a year to my life in time saved. Thanks as always for the excellent information 🙂
I self-published a book in 2009. It was a great experience, but I don’t see myself doing it again soon.
My goal in writing is to help people learn and then take action to get positive results.
I’m finding that educating people through online video is much more effective than delivering a book, electronic or physical.
If I had to do it all over again, I’d do the same thing: Write & publish a physical book, then focus on achieving the stated goal of helping people take action and get results through video-based education.
** Tim, I have a question… Before I decided to self-publish I got a couple decent offers from traditional publishers, but they all involved 10+ months of lag time between when everything is ready to actually print and when they would actually print. I’m not nearly patient enough for that much delay. Is the world of “real published authors” really limited to people who are comfortable waiting around a year for their book to manifest?
** Tim, I have a question… Before I decided to self-publish I got a couple decent offers from traditional publishers, but they all involved 10+ months of lag time between when everything is ready to actually print and when they would actually print. I’m not nearly patient enough for that much delay. Is the world of “real published authors” really limited to people who are comfortable waiting around a year for their book to manifest?
With the big boys, yep. That’s the lag time. I actually kind of like it. Allow me to explain:
It forces you to think about your material and attempt to make it perennial. Which advice will be obsolete in 12 months? Delete. Which advice would be obsolete in 24 months? That means it will only be good about 12 months after pub date. Delete. I find that it helps refine your thinking, just as having the content in a fixed form (print) forces you to consider your writing and editing more seriously than if you could change it willy-nilly like a blog post. There are certainly benefits to multi-media books on the horizon, but I wouldn’t call them “books”, and I think the bells and whistles of video, hyperlinks, etc. will be used to mask sloppy thinking more than to create a more compelling argument or presentation.
I think “timely” books are kind of ridiculous. If the content delivers value based on timing near recent events, other media have it beat. I think long-form books should have a longer shelf life, and therefore require harder thinking throughout the process to ensure the content has value 1 year, 5 years, even 10 years down the line.
Hope that helps!
Wow, this is a tremendous post. I can’t really comment on anything specific since it is more of an eye opener than anything else. I’ve been wanting to get into writing more and more which is why I’ve opened up numerous blogs. I’ll definitely re-read this numerous times and check out the book suggestions. What a life saver, couldn’t thank you more.
i’m a seth fan. i own all of his books. i’ve attending his live events in new york. but i think seth is wrong. traditional book publishing has been dead for some time. but the traditional book format is alive and well. The solution is to self-publish your books and sell direct. the second part is to recognize how to use bookstores differently. there are many advantages to being in bookstores and on amazon.com. but you can’t give up complete control. we just finished a years worth of testing this ourselves. my niche still prefers books. we pulled all of my books from bookstores in early 2008. now sell only direct. early next year we begin our new online strategy that will compliment our direct strategy. our direct book sales only account for a half million a year per title. so its certainly not a way to make a lot of money. we do it for other reasons. selling books in and of itself has never been about the money.
Do you have any preference to which form your book sells? Are you concerned that you may sell more digital copies, but they may not actually be read by the customer. As you said, it’s much easier to overbuy on the Kindle, when you’re not looking at a stack of unread books.
When you’re looking at your sales metrics, are you concerned more with % of sales you net personally, or the format that is most likely to be consumed. Is there even a way to measure which format is more likely to be read/consumed?
For spreading the ideas, I have no preference. Audiobooks seem to have the highest completion rate, followed by hardcover, followed by digital. For hitting lists, at this time, I prefer hardcover because that’s what counts.
Can you elaborate a little more on your friend doing 5,000,000 +/mo?
I understand if you can’t mention the book or site however, perhaps the niche and/or price of the ebook?
Fascinating post. Even if sell publishing takes off with more of a reputation I still see new authors struggling without their own publisher first time when going for a print book anyway.
We self-published our 407 page soft-cover book with a 2500 copy initial printing which has subsequently sold out. The bill from the printer and incidental costs set the cost per copy for that first printing at $2.47. Cover price is $18.95.
The profit was phenomenal when we sold directly to the public through our website or direct sales. It diminished significantly through Amazon, Baker & Taylor and bookstores.
The largest problem with this approach was the fact that it was not automated income. We had to be here to ship the books and keep track of Baker & Taylor invoices – an absolute nightmare!
On the other hand we loved the challenge those stacked boxes of books presented. They took up an entire wall in our living room and their existence in our home forced us to find creative ways to sell them. We were willing to try virtually anything to promote the book:
-Farmers markets proved to be an excellent venue. We met three local newspaper editors at our local markets and the exposure resulted in excellent feature articles in the three larger newspapers in our city.
-Art Walk: Once a month the local galleries in our town serve free wine to promote their new exhibits. While our book has absolutely nothing to do with art we would sell boxes full by setting up on the sidewalk and telling our story to the half-drunk gawkers who couldn’t afford the expensive art but wanted to buy something interesting.
-Car Shows: Our book is somewhat related to automobiles so we asked the local car show if we could set up a table and promote the book. They allowed us to do it for free. Sales were slow but we met two people influential in their non-car-related fields. This was the foot in the door for one local television interview and a 15 minute segment on our local NPR station.
We alway asked the buyer if they would like us to sign their
copy. It’s amazing how the simple act of signing a book causes others
to think, “I’ve got to get one too.” We would go for an hour without
selling a book then suddenly someone would purchase one, we’d make a
spectacle of signing it, and the frenzy was on. We’d sell a pile in 10
When the first printing sold out we decided to upload the .pdf version to Amazon’s Createspace (www.createspace.com). This is essentially Amazon’s version of print-on-demand and it is exceptional.
Our book earns $6.83 in royalties (36% of cover price) when sold through Amazon.com and $10.62 (56%) when sold through the our createspace page. Amazon prints individual copies when they are ordered, offers their standard discount and lists them as “Sold by Amazon”.
Now we’ve got to go out and have some more interesting experiences so we have something to write about in the next book.
I think the death of print is horrible. I guess I am one of those people who grew up in the traditional household with shelves of books in almost every room. I like the feel and the smell of books. They are immortal. What is going to happen to Kindle when the power runs out? How our descendants are going to study about our culture if there are no print books? Maybe I’m crazy, but print should be kept alive.
Another thing that makes self-publishing so appealing is the ownership issue … you don’t sign documents that restrict your rights on your own book and contain things you don’t understand yet and can’t judge properly (as a first time author).
*side note* At least that was what I thought when a publishing company contacted me to publish my thesis. The main issue was that I didn’t grade them as a good company … after all they picked my thesis which is frankly speaking not good at all 🙁 And I didn’t like the idea to inflict the world with yet another book that adds no real value, but students (poor, poor students) have to read for the completeness of their literature recherché. *end of side note*
I clearly prefer paperbacks … they cost less (I’m cheap), take up less space (I don’t want to collect stuff) and smell way better (more bookish that is).
I will hopefully get the new Kindle though. It will certainly be more comfortable to read ‘thick books’ on it. World & Peace is not good for your wrists, I’m telling you.
did I just write world & peace? 🙂 I meant War & Peace of course
Thanks for this great post.
My one comment is that I was a bit taken back by your reference to ebooks, “Prepare to be an uber-competent CEO or fail if you choose this option.”
I have read your book twice and I know that in the “Muse” section you discuss the viability of Information Marketing to automate income. I just attended the Affiliate Summit East last week in New York and had met with Click Bank and heard some inspiring stories about Information Marketing products people are using to generate income.
I know this post is really about the changes in the publishing industry and it’s a very strong analysis at that. But I would like to hear your opinion of Information Marketing products being used as Muses as a way to automate income. How do you see the future of these types of Muses developing?
I should qualify my statement. An e-book could be used as a muse without any problem. To get to 5 mill or 10 mill a month, however, you’d need to be best of class, of course. I’ll edit, perhaps just removing “uber.” If you have a muse, you do need to be an effective CEO, but not in the traditional sense of the word.
I just completed a manuscript that according to the CEO’s I’ve allowed to read it may be a huge hit for mid-level management… wanna takes a looksie? Could be a great possible investment for us…
Your post is spot-on, Tim. I have my fourth book coming out next month and can personally attest that it is VERY HARD to get even well off, never mind rich, by writing books. My first book was a Golden Dove nominee and earned out its advance in under 3 months. Since then, each title has succeeded in making my royalties be roughly about the same as a (decent-to-well-paying) part-time job – except that I don’t have to do the work to get it. I usually do ever-green books that will be relevant for a minimum of five years. My first title was still in the top 4000 on Amazon four years after it hit the shelves. But it still never amounted to more than the pay of a part-time job, and I was with the top publisher in my niche. My fourth book (see the link) may do as well; I am not sure. However, the amount of credibility these books have given me in their respective spheres is incredible and simply cannot be overstated. As Tim has outlined, writing probably won’t make you rich but it is an excellent way of positioning yourself for other things.
I have personally interviewed a number of speakers, and thought leaders for news articles that make good income from selling ebooks, and using either self-published physical books or ebooks as a platform for other income generating activities.
In the context of what I think would love to do here, kick back and travel the world, it is the natural think for us to do. Hell, if you do it right, you can sell the ebook and then use the sales as a way to go a traditional publisher with a track record. I think a book called the Christmas story did that. I know a number of other authors have as well.
Good article. Print has been dying for a while. People just like saying “print is dead” because it makes them sound like they are ahead of the curve by thinking “digitally” or “technologically.” But just because a book is in a different format, doesn’t mean success. Successful authors can actually sell less units and make more digitally. Godin can live off 10% cuz 10% of a million is still a lot. Godin is fortunate because he has over 1million people reading his work and is his own PR & Marketing Machine. But someone with 1000 readers and if only 10% have an e-reader, they still won’t be able to afford their own e-reader. New authors will still have a hard time making money until people know who they are. Book stores have to die before books do. Digital distribution is definitely taking over, but people are still buying actual books, as far as I know Amazon is still making money. Print isn’t dead…yet 😉 When there is an e-reader in every home there will be no need for books, but for now, how many families outside of silicon valley are dropping $400 on a reading device in this “recession?” Not enough to deliver the final blow.
Making money is awesome and I will support anybody doing it but I think a book is also an art form and if it is important enough to you it should be written regardless whether or not you have a contract. The point should be to share the art not just make money with it. Now once you have written the book how can you make money from it directly or indirectly?
Kansas City, MO
What makes you choose to buy a book digitally now vs via Amazon or in a book store? Is it down to where you are located globally? Do you still by print copies of books? I’m sure you must! 🙂
Why can’t I bring myself to buy a book digitally then? I just like owning them too much! So much for minimalism :o) .
Yet, I have no issue with owning music digitally and don’t miss owning physical CD’s. I wonder why that is?
Is there maybe any correlation with the uptake of mp3’s vs the decline of CD sales over the past 10 years compared with the sales figures to date of kindle and print books? Is it a total opposite effect?
It seems strange that print book sales are increasing along with kindle book sales.
Maybe it’s just people are starting to read more and more regardless of format. Perhaps the new format re-kindles (pun intended ;P), peoples interest in reading full stop.
I think currently, we are in a position in history where ‘ownership’ of items is changing completely over to subscription based services.
Same as netflix and the like, will there soon be a service where you can read as many books as you like on the Kindle for a flat ‘per month’ fee? Unless there is already and I’ve missed it (Obviously libraries let you do that now but that I’m a slow reader and I can’t afford the fines :o) )
I’d like to see how many authors go back to print then when there is a fraction of money to be made for their book digitally because people expect access to everything at one price. I believe this would level out the playing field in terms of authors earnings for digital books. Authors would have to write more and more books or go back to print.
Print isn’t dead, it has just got a competitor.
This article was excellent and very helpful. As someone who wants to publish my blog, your “So What Should Authors do” and “Recommend Reading” Section is invaluable. Hopefully our paths will cross again soon. Hope you and Amy are doing well!
YES! this post perfectly aligns with my current muse: Finishing my non-fiction ebook. It just got a million times easier when I decided to record Skype interviews and embed the audio into the PDF. Everything is transcribed and readable. Of course, the embedded audio content is flash, which means no ipad, but it looks like the Kindle may support it -.then you have Blackberry and Android tablets coming soon as well – we are already living in the future!
one book I can recommend is “The E-Code” by Joe Vitale/Jo Han Mok – brilliant ideas and inspiration for anyone trying to sell a book online
Awesome post Tim! – see you at BM
Excellent post yet again!
You’ve mentioned before that income is not the only currency that you (we) possess in life. I like how this was reflected when you talked about taking “cashless” adventures. I’m curious also, what types of opportunities/experiences have you had using this “other” types of currencies?
p.s. – Still spreading the message of your book and getting the word out to new people almost every week!
Hi Tim: If you’re going the traditional bookstore route, you’re correct. But if you’re making a book for a niche that you can reach outside of bookstores – self-publishing works. Here are the numbers: assume you make 7.5% on a paperback that sells for $12.00 Money to you 90 cents. 15% goes to your agent. Bottom line to you 76 cents.
Now assume you self-publish and even pay a higher cost for short-run books. A $12.00 book costs you $2.20 After distribution, you make say 45% of the $12 or $5.4. Subtract the $2.20 leaving you $3.20 or 4x as much as you would make from a traditional publisher. (If you’re able to finance and sell over 5000 books the costs drops to under a dollar per book leaving you with 4.50 or almost 6X as much)
Assume though that you sell the majority of your books back of the room or as part of your speaking fee. You make $9.80 per book nearly 13X your profit from a traditional publisher. You could sell fewer books and make the same money, or as many books and make 13x as much.
Self-publishing gets you 4x to 13x the profit. It’s the difference between making a living as an author or squeaking by. You’re going to be doing all the marketing and sales anyway. Might as well get paid for it.
I agree 100% on the media rich e-books. 10 years ago encyclopedia cd’s were coming out with media rich content. It seemed like such a great idea but they didn’t do well.
I think it’s because reading is a different experience from watching video or listening to audio. It’s almost like meditating. It involves quiet thinking, not external noise.
Great info, Tim. Do you have any figures for audio books?
I found your book because I had an extra credit at Audible.com. I listen to it all the time and have now purchased the hardcover edition so I could easily refer to the various websites and companies mentioned in your book.
I’m just getting started, but thank you for giving me the tools to change my life!
Awesome work. Loads of stuff, good thinking out into words.
This is a fantastic look at the economics of publishing, which most aspiring authors have no sense of at all. The only reasons to publish a book through the tradition route these days are a) You’re a big name and will get a fat advance b) You need retail browsers to buy your books, or c) You’re not requiring or expecting income from the book—-it’s a marketing tool for speaking/consulting/etc.
Those are all valid reasons though, plus there’s the issue that more than a few people still like to buy a physical book from a store, read it without recharging anything, and put it on a shelf/loan it out/sell it used. That percentage may decline, but right now e-books are still a tiny niche for the majority of authors and they don’t have nearly the same cachet for impressing clients or journalists who are looking for a quote. Handing out an e-book or e-mailing one just doesn’t have the same impact as handing someone the real thing with a nice cover.
Stop being so good at everything!! I actually sat down w/ a boutique publisher a few weeks ago regarding a photo-book I am considering for the open market. Any thoughts/comments on the non-text world? It seems photo-books would still sell best in hardcover before eBook format…as they’re much more likely to be gifts or coffeetable books; but perhaps I am not seeing the optimization of photobooks online??
Agreed. Hardcover (or beautiful paperback — look up “Rick Smolan”) is the way to go for photos, at least for now.
Good luck! 🙂
e-books are the way to go. In Australia book prices are getting ridiculous
I’ll look at the USD on the back cover and it’ll say ‘$15’ -$25 and then the australian book stores (at least where i live) mark books up to a minimum of $30 for a paperback and anywhere from $35-$50
When i can buy a kindle book for $11.99usd which converts to about 13AUD it’s a no brainer (unless the book is so awesome that i want a hard copy forever, which only happens with Dawkins and the 4HWW)
Tim and all-
Seth Godin said (prior to the recent blog post) that he thought that traditional books were souvenirs. People would continue to pay for them as memorabilia of the experience of the book. There will, therefore, always be a market for the “traditional” reading experience, but it will be more a niche. This speaks volumes to the paradigm shift in the industry.