Hope I'm starting the new year right by telling all of you about this article. http://kriswrites.com/2012/01/04/the-business-rusch-writers-will-work-for-cheap/
You must read it as it is a good kick in the pants in regards of our writing careers. It does talk about one thing here that I do want to address and that is the cost of being an indie published author. The big thing Kris talks about is how we price our work. Now, just so you know here's how I'm going to price most of my work and I'll explain at the end.
1. $0.99 ~ 0-10,000 words
2. $1.49 ~ 10,001 to 20,000 words
3. $1.99 ~ 20,001 to 30,000 words
4. $2.49 ~ 30,001 to 40,000 words
5. $2.99 ~ 40,001 to 80,000 words
6. $3.99 ~ 80,001 to 95,000 words
7. $4.99 ~ 95,001+ words
At Amazon you'll get 35% for anything under $2.99, anything $2.99 and over 70%. B&N you get 40% under $2.99 and 65% over, at Kobo you get 60% on US and 38% on foreign sales, at Apple you get 70%, at Sony you get 60%, at Diesel you get 60% and I'm not sure yet what it is at ARe as I haven't signed up with yet. It's on the to-do list this week. At Smashwords you get 85% of whatever the rate is at the market you're selling to i.e. if you choose them to do Amazon, you'd get 85% of either the 35% or the 70% rate plus they will give you 85% if you sell it directly with them. Sony and Apple must go through aggregators as they have special software and requirements that most people don’t have. I knew long ago that I wasn’t going to attempt to do them myself.
So let's look at what you'll actually make at each of those rates. I'll start lowest to highest. These numbers are public knowledge and anyone with a calculator can figure them out. Also, it doesn’t hurt to let readers know we aren’t making that much per book even when we self-publish. For verification, as we all know, it’s even less when we do the traditional publishing route, advance or not. All my numbers have been rounded up to the next cent.
Amazon (35%) Kobo Foreign (38%) B&N (40%) Kobo, Sony, Diesel (60%)
1. 0.35 0.36 0.40 0.59
2. 0.52 0.57 0.60 0.89
3. 0.69 0.76 0.80 1.19
4. 0.87 0.95 1.00 1.49
5. N/A 1.14 N/A 1.79
6. N/A 1.52 N/A 2.39
7. N/A 1.90 N/A 2.99
B&N(65%) Amazon (70%) Apple(70%) Smashwords(85%)
1. N/A N/A 0.69 0.84
2. N/A N/A 1.04 1.27
3. N/A N/A 1.39 1.69
4. N/A N/A 1.74 2.12
5. 1.94 2.09 2.09 2.54
6. 2.59 2.79 2.79 3.39
7. 3.24 3.49 3.49 4.24
The N/A indicates a price point that doesn’t get royalties in that category. This means that if you’re book is $0.99, you’ll never get an Amazon royalty rate of 70% because the book is priced too low.
Now let’s look at the book budget itself. This is the money that you put out to get the book into the different markets. We’ll use my short story A Lover for Rachel as the guinea pig here since it’s the first I’ve done and I’m sure others have or will have a similar experience. It sells for $0.99 and I won’t know for months if it will even make what I spent on it to get it into the market.
I have set a book budget of $500 per book. This is high for most people but I wanted to include advertising bucks in there. Here’s my outlay so far on this short story:
1) Formatting ~ I pay someone to put it into the proper format (epub, Smashwords, PDF, and more) for everywhere. This is priceless to me as it would take me days to figure it out and I’d rather be writing. Total cost $55.
2) Editing ~ I found an editor that does things per word and very inexpensively at $0.006 per word. That is a little lower than the going rate but she’s a wonderful editor. This included at least 5 rounds of revision and passing the story back and forth until we got it as perfect as possible. Total cost $65.
3) Final Round Copyedits ~ This is done once the book is in proper formats. My person calls it ‘Oops Detection’ and it was invaluable. Total cost $32.
4)Book Aggregator ~ I chose Book Baby to get me into Amazon, Apple, B&N as well as Sony. They give you 100% of what you earn and you pay an upfront fee of $99 and a small yearly fee for them to maintain the book after the initial year. There are definitely good and bad aspects about this. Matter of fact, even though I love the service they provide, I may not use them for Amazon and B&N after this first book. The reason why is simple: once you hit the publish key, you can change nothing. Most of the time, this is good BUT there are things such as sales and giveaways that need price adjusting. I’ve asked because I don’t think a price adjustment justifies a $50 change fee since I’m NOT changing the book. We’ll see how this one pans out and I’ll keep you updated. Still, I will need them for both Sony and Apple as I don’t have the means to get those formats into place. One final negative is that I can’t see my sales numbers in real time for at least the first 45-60 days. They say they need to wait until they get the data from the distributors. I question this as the distributors do it in real time, so I just don’t get it. Total cost $99.
5) Cover Art ~ I won’t skimp on cover art and I’ve found someone who is very good. She has a reasonable price and I will use her for most of my work. There are a few fantasy things that I’ll be commissioning special art pieces but those will come later. Total cost $65.
6) Advertising ~ My ad budget is whatever I have left over from the original $500. This time, it’s $184 and I plan to use every penny of it. In later posts, I’ll let you know what works and what doesn’t. Total cost $184.
So you can see that I plan to spend the whole $500 for this first book, which is a short story in reality. I plan to do this for any book I publish. The costs that aren’t static in those numbers would be the editing and the final round copyedits. Non-static numbers might also include the formatting for larger books. Frankly, I won’t know those costs until I do a book at each level. Next time, I might overextend myself in some areas, thus making the advertising budget sparse and that is one thing you shouldn’t skimp on either. I’ll leave that for another day’s discussion.
The final item I want to look at is just how many sales I need to recoup my investment. Looking at each of the six royalty points for a book priced in this manner: Amazon(35%), Kobo Foreign (38%), B&N(40%), Kobo-Sony-Diesel (60%), Apple (70%) and Smashwords (85%). At each of the percentage points, here are the number of books I’d need to sell:
Amazon(35%) at $0.35 per book, I would need to sell 1429 copies.
Kobo Foreign(38%) at $0.36 per book, I would need to sell 1389 copies.
B&N(40%) at $0.40 per book, I would need to sell 1250 copies.
Kobo-Sony-Diesel(60%) at $0.59 per book, I would need to sell 848 copies.
Apple(70%) at $0.69 per book, I would need to sell to sell 725 copies.
Smashwords(85%) at $0.84 per book, I would need to sell 596 copies.
We all know that in reality our royalties will be spread across all those markets but this does give an author or a reader some perspective as to the real numbers and why long time authors like Kristine Rusch thinks that the indie price points are underselling us as writers. In some ways, she is very correct while in others not so much.
My price points are based upon word count of the book for one and only one reason: that is what I feel I would pay as a reader for those word counts. I have always felt that books overall were overpriced in some areas like series romance. We are basically supporting the astronomical overhead of a big company. I don't have that overhead and can use a different pricing scheme when assigning cost to my books. When selecting my price points, I looked at the market over and over again. True, there is a glut of $0.99 reads out there. Many are better than my little story. Some aren’t. Many have lots more words than mine and surprisingly, some don’t.
The fact is that I worked these numbers over and over again in the past six months. In November, I started writing them down on paper so I would remember them. At the end of that month, I made a spreadsheet so I could look at every price point and different scenarios. Why? Because I’m in this for the long haul and I needed to know just where I was both in my traditional epublishing as well as my indie venture.
I also know just how long it takes me to write a story based upon those word counts. On a very good day, if I sat at my computer writing up to a full 8 hours, I could write a 10K story. I've done it. The max I've ever written in a day is 18K and that was over a twelve hour period. I was definitely on a roll that particular day. Still, I know what I can do and how long it will take me if I put my mind to it. With those type of scenarios, I could in theory produce a 40-50K book a week. To me, those time frames are short. They are also usually unrealistic but again a topic for another day. I considered these facts as well when coming up with my pricing scheme.
I also needed to know when and where I would make money. I needed to evaluate the amount of risk I would be taking as throwing around $500 is nothing to sneeze at but I’ve gambled before and lost. This time, I was lucky in the fact that a personal happening in my life allowed me to set aside a certain amount of money for my indie publishing venture. I’ve been watching that overall budget like a hawk. I won’t let my guard down until I’m actually making money and I don’t see that really happening for six to twelve months.
In the interim, I’ll be writing more books and getting them ready for self-publishing. I will also be submitting my contracted books to my traditional epublishers. In about a year, say January 2013, I will evaluate the whole system again to see where I’ll be going with it.
I believe in showing the money when there’s something to show. So here are the stats to this point. Remember, because I’m using a book aggregator, these numbers will not be accurate until probably March 2012. I will continue to update them on a monthly basis sometime during the first week of the month.
A Lover for Rachel ~ release date 12/22/2012
Amazon ~ Unknown on 1/06/2012
Apple ~ Unknown on 1/06/2012
B&N ~ Unknown on 1/06/2012
Kobo Foreign ~ Unknown on 1/06/2012
Kobo-Sony-Diesel ~ Unknown on 1/06/2012
Smashwords ~ 1 sale, 38 views, Money Made ~ $0.81 (Gotta figure out where that 3 cents has gone!)
See you all soon!