Economics of Self Publishing

The Economics of Self Publishing: A Real World Perspective

Where does self-publishing fit into the shrinking and fragmented book market? This question is especially relevant now that self-publishing has become more accessible and competition for readers heats up. The answer is that self-publishers are best suited to create their own markets and readerships. There is no way to get into the large chains unless distribution is established and even then they take anywhere from a 45 – 55 percent cut. Then there is the issue of returns which has plagued major publishers for years and new small publishers just aren’t equipped to handle.

In one survey conducted by a major industry source, Publisher’s Weekly; of the over 11,000 retail outlets for books, almost 4,000 of these are Wal-Mart stores. The sad truth for self publishers about Wal-Mart’s great market share is that it is a lot of the same, focused on selling a narrow range of titles in a very high volume. The chances of getting a book in their stores is limited to say the least. There is dwindling space on bookshelves as big chains focus on bestsellers and independents grow localized, niche and used book markets. The other problem with Internet sales, which Amazon.com has the strong hold on, is that consumers are drawn by finding used titles. This basically means a lot of authors won’t be retiring off their royalty payments.

The only way a self-publisher will thrive is to avoid this no-mans land of middlemen and sell direct. This entails a whole lot of marketing wizardry and focused promotions that utilize local markets, as well as the Internet. Consider the basic math of the situation for a new self-publisher who has decided to utilize distribution channels to access the major chains; for 100 printed copies of a 100 page (b/w) book, production cost is about $5.00 a piece, so unless a publisher sets the price at $15 or more, there is minimal profit in sight. In the end a self-publisher is going to have to heavily promote and market a book on their own, but lose half their cost just to distribution. If you are going to build promotions for a self-published title anyway, it makes less and less financial sense to give away profits to middlemen.

Print on demand publishing is an accessible and tempting tactic in this new style of bookselling, but is still an expensive option. Although solutions such as CafePress and Lulu dangle large distribution channels to prospects, the unit cost per single book production is simply too high to make any tangible profit. The self-publisher’s alternative is to print a realistic amount of copies and reach out directly to all viable markets. These arenas include the World Wide Web as much as, if not more than local or niche markets.

Aspiration	Process	Big Picture
To Be The Next J.K Rowlings (Huge Author)	Search for an agent. Agent shops manuscript to large publishers. Large publisher buys manuscript and provides all editing and printing functions. Author receives big check and future royalties.	Author takes no financial risk Probability of Success (.01% - you have a better chance of getting hit by lightning 3 times)
Sell To Major Chains Through Existing Publisher	Search for publisher which specializes in particular type of subject. Publisher utilizes existing distribution channels. Publisher should handle book production and provide marketing support. Author receives royalty checks as books are sold.	Author takes no financial risk Beware of publishers which try to have authors bear cost Reality is that royalty payments are lower due to production and marketing costs plus returns. Average first print run in low to mid thousands
Establish Publishing Company and Plan on Selling to Major Chains	Print realistic quantity of books based on budget and goal. Establish relationships directly with major booksellers and/or book distributors. Marketing plan needs to be created to cultivate demand. Through publicity, word-of-mouth, and Social Networking, cultivate demand to drive prospects to bookstores or website. Personalized Publisher Program is ideal solution	As a publisher you assume all the financial costs and need to dedicate substantial amount of time. Additional responsibilities include editing, production and marketing. With the hope of selling large quantities, 45-55% is paid to booksellers or distributors. Average first print run at least 1,000 copies
Establish Yourself as Publisher and Sell Direct	Print realistic quantity of books based on budget and goal. Sell direct in-person and/or create web presence. Through publicity, word-of-mouth, and Social Networking, cultivate demand to drive prospects to website. Sales to independent booksellers and retailers handled personally and sold at wholesale price. Independent Publisher Program is ideal solution	As a publisher you assume all the financial costs Additional responsibilities include editing, production and marketing. Despite lower volume, publisher makes more profit since there are no middlemen. Average first print run ranging from 50-500

As the above table illustrates, new self-publishers need to establish realistic expectations on business aspect of their publishing endeavor. We recommend our customers consider the distribution method they intend to use when deciding which program to use to obtain an ISBN and barcode. ISBN's obtained through the Independent Publisher Program have a non-descript registrant identifier listed as Independent Publisher, but all copyright and distribution rights are retained by each publisher. This is a perfect solution for author/publishers opting for the self distribution method. Regardless of which program is selected, our agreement with Bowker enables us to upload our publishers' book data directly to Bowker's Books In Print database. Please feel free to contact one of our customer service representatives (a live human who answers the phone) to discuss your options