By the Numbers
Being risk averse, I’m always trying to figure out the probability of various actions. Probabilities become important when real money’s on the table, as when you’re shelling out cash for cover art or editing — the only actual production costs authors should incur.
Not to say we don’t pay for other things.
Self-pubbed authors have fixed overhead costs in addition to the cost of actually producing the book. Infrastructure like websites and email list services. Software. Heck, even printers, ink, and paper, if you swing that way. Those are all fixed cost. They're the price of doing business you'll incur every month and not the variable costs associated with producing a particular book.
So when I advise people to write five novels in a single niche before trying to prime the pump on sales, I’m aware that I’m asking people to put real money at risk.
Writers who pursue the traditional path incur those costs as soon as the book gets picked up. They just don't see it. The publisher figures out how much a book needs to earn before they even set eyes on a manuscript. If they don’t think the book will sell enough units to offset the cost of covers, editing, layout, and all the other variable expenses along with a generous slice of their fixed overhead, they won’t take it. If the book doesn’t earn that much, the writer won’t get another contract from that publisher. They may not get the rights back either.
Writers who self-publish need to do their own accounting to figure out how much they can afford to spend to produce their books.
I’ve seen some pretty horrific numbers coming from new authors. Authors spending way too much for their first novel, beggaring themselves and sacrificing later work on the altar of “let’s see if anybody likes this one.”
Tip: They don’t.
Taking costs in order:
Unless you’ve got a few thousand dollars stashed away to start this new business, go with a premade cover. They can be had for under a $100. I haven’t checked lately but they used to be available for under $50. Google has a nice list of pre-made cover providers. It’s a fun way to spend a couple of hours between writing sessions. I know people who’ve bought a whole series worth of covers before they even wrote the books, but they weren’t new writers trying to finance a startup.
Editing is the biggest expense. Figure out how much you can afford to spend in a year and divide that by the number of books you intend to publish. That’s how much you should spend on editing for any given book. You’re unlikely to earn that money back for a very long time on your earliest works. Budget accordingly.
Speaking of numbers, if that number of books isn't greater than one, it’s going to be a long time before you’ve got enough work out there to get a foothold in the marketplace. That’s why it’s important that new authors don’t fritter away their time trying to interest readers in their first novel at the expense of growing their catalog.
A good first novel release might net $50–$100 in the first month and a few dollars for the next few months before petering out to zero. It’s pump failure as the pool of readers dries up. If yours does better than that, rock on. Few new authors manage $1000 on the first book in the first year. Some first novels sell pretty well, particularly if the author has done a good job networking with other authors.
I bring this up to temper your expectations about first novel launches. A lot will depend on what you write and what you price the book at.
In the US, romance, action/thriller, and speculative fiction account for upwards of 70% of all fiction sold. If you’re writing outside those genres, you’re going to have a harder time. Not impossible, but remember romance earns the right to be the queen. Do not speak against the throne, but recognize the rest of us only share left overs from the royal table. Luckily it’s a big table.
Form matters, too. Novels sell better than shorter works.
Novellas had a renaissance early on in ebook history. They’re still out there. People still write them. They still sell. The shorter form isn’t necessarily better. They can cost less to get edited, but you can't charge as much for them either.
Some readers like short stories, but shorts are a notorious hard sell. There are too few markets for them. Anthologies come along occasionally. It’s possible to put a few together in a collection of your own, but shorts are a tough market to break even in. My hat’s off for anybody who writes short fiction.
The basic rule: If you write in a niche that nobody reads, there’s a good chance nobody will read your book, too.
I’ve talked about costs. What about revenue?
Economics has some words to help us. Price flexibility of demand is the degree to which a buyer will pay a higher cost for the same or similar product. Generally speaking, the more something costs, the fewer people can/will buy it. Economists plot this on a graph as a curve with cost on one axis and units sold on the other. That curve always has an inflection point where sales for a given product decline as the price of that product rise.
For ebooks, that inflection point was $4.99 for a very long time. There wasn’t much difference between $2.99 (the lowest price Amazon allowed authors to earn a 70% margin) and $5.00. Anything above $5 and the number of units sold tapered off. Above $6 and those numbers dropped sharply.
That told me that readers’ price flexibility of demand stalled around $5. That became the optimal price for me. Enough revenue to support me and the optimal number of units sold to support audience growth.
It’s also why traditional publishers window ebook prices at prices above $10 in order to make the physical copies more attractive to readers. Once they’ve sold as many hard copies as they can, they’ll lower the price of ebooks to just under the $10 price mark. It helps them with their narrative when dealing with bookstores and their stance that ebooks don’t sell very many units so authors don’t need to think about them.
But I digress.
Economics has another useful concept — fungibility. Nothing to do with mushrooms. It’s the degree to which some product might be substituted for another.
Brand loyalty keeps you buying whatever commodity you buy, like toothpaste. In a pinch, say the store is out of your brand, you might buy another. Commodities like toothpaste have high fungibility. You can substitute one for another.
Other goods have fungibility. Potatoes as a starchy veg can substitute for rice and vice versa. Depending on your geography, you may eat more of one than the other but from a dietary standpoint, they serve the same basic function as — say — bread. They’re not quite equal. It’s not as similar as brands of toothpaste, but still fungible.
Books are a different matter. Books have very low fungibility. Sure we read the stories we like but even within genre niches you know the authors you like and the ones you don’t. The lack of fungibility becomes significantly pronounced when you switch genres. Almost nobody would accept a Clive Cussler novel because Nora Roberts was sold out.
Niche matters here because fungibility matters to the reader. Once they’ve read the top twenty books in their niche, fungibility suggests they’ll take a chance on an unknown rather than switch niches. Not a hundred percent, but enough that it’s worth staying close to your reader by giving them something that’s available in a genre they like when their preferred brand has run out.
That’s where your book picks up readers organically while other books dominate the charts. You don’t need to be a best seller. You just need to be available.
It might seem hard to believe but heavy readers will go through the top 10 or 20 books in a matter of a couple of weeks and are left looking for something else to read. Since a lot of those titles camp out in the top slots, those readers have to look further down the list before they find something they haven't read. Having your books there waiting for them is one way you move up in rank.
Stepping back, it should be obvious that a writer can’t make a living from people reading only one book a year. Even one a month. We make bank on the heavy readers plowing through four or more books a week. They don’t all read genre fiction but enough do that it matters what you write.
But back to risk. What risk is most important to you?
From the beginning, I wanted to get my books in the hands — and ears — of readers. Traditional publishing puts too many obstacles in that path. The chance that my stories might not get to readers is too great. I have to convince an agent, or at least an acquisitions editor to take a chance on the story. The publisher has to try to convince bookstores to stock it. Bookstores have to convince readers to read it.
All for a book by an author nobody ever heard of.
Along the way, publishers want me to do things that, honestly, I’m not willing to do. Mostly because they’re stupid, mass media attempts to use mass market tools in social media channels. Blogging. Tweeting. Instagram and Tik-Tok. All to promote your book by cover reveals and insider tips on how the book got written and why the character they loved so much had to be killed off. This stuff also takes time away from the single most important thing I can do. Writing the next book. Nothing sells your last book better than the current one.
For me, the risk of traditional publishing is too great. The payoffs are too small to offset the risk.
By doing it myself, I can guarantee that readers at least have a chance to get my books. I always have a 100% chance the books appear on the shelves of the largest digital bookstores in the world.
I’m blessed that my audience built slowly over a couple of years before my income from writing matched, then exceeded, the income from my day job. My catalog has grown enough that my income exceeds my wildest expectations.
I just needed to be careful how I primed the pump.