Tuesday, February 22, 2011

Forget the query go round - if you want to be published - start with indie

H.P. Mallory, D.B. Henson, and now (I can finally officially announce) Michael J. Sullivan prove that if you want to get traditionally published - start with self publishing.

The "old way" of traditional publisher meant hundreds of rejections from agents, months shopping it around to presses, and then a production schedule of 12 - 24 months. All in all, from day one of the query until the book is released, could reasonably take 3 - 4 years.

For years conventional wisdom said, "Don't self-publish because if you do, no traditional publisher will touch you." Well, that's NOT the way things are now. Not only are publishers interested in successful self-publishers - they are putting them on the fast track to release.

I just completed a full interview with D.B. Henson - and I'll make this my next post but her story dovetails so nicely into this one that I want to point out a few things.

D.B. Henson
Published a single book Deed to Death in April 2010 at $0.99 and it hit the top 100 in just a few short weeks after publishing. It's been in the top 10 for 257 days. On the day after Christmas she got a call from Noah Lukeman (if you don't know who he is -- tune in to the next post devoted to D.B. exclusively - but he is "the agent"). He had read her book, loved it and asked if she wanted to go traditional. She signed with him January 1 and after a quick bidding war Simon and Schuster has green lighted her release for July 2011. To have a book pushed through in 6-7 months is unheard of.

H.P. Mallory
Published 3-books on Kindle: Toil & Trouble, How to Kill a Warlock, and Fire Burn and Cauldron Bubble. She hit the #1 for Fantasy and was in the top 100 for a few weeks with Fire Burn. H.P. was approached by an agent in mid-December and after a bidding war Random House signed her to a multiple book six-figure deal for books that are not even written yet! They have already slated her for the Spring 2012 production time frame so another fast-track when you consider the books aren't even started.

Michael J. Sullivan (that wildly handsome and talented writer - kiss, kiss, honey)
Decided in Mid-October to "test the waters" about traditional publishing - his agent had 5 houses interested and Orbit (an imprint of Hachette Book Group) came out the winner. He also has a multiple book six-figure deal. While we "shook hands" in November we still don't have contracts to sign - but that hasn't stopped Orbit from fast-tracking the release of this series. story editing is done, covers should be ready next week, and copy editing is underway. Rather than releasing the books in a traditional 12 month or 18 month cycle they will be released in consecutive months - November 2011, December 2011, January 2012 - and we've not even put pen to paper.

There's a lot of people saying that if you are indie you should stay indie...and if all you care about is money, that is probably true. But each of these authors have weighed the pluses and minuses and decided that its worth seeing if the traditional publishers can make them household names. We'll be keeping our eyes on all of these people as their books are released and a year or so later we'll have a pretty good idea if they made wise decisions or not.

In any case, while they were self-published they each made tens of thousands of dollars, found tons of fans, and caught the eye of the traditional publishers without having to go through the humiliation of hundreds of rejections and years of waiting.

Food for thought.

2010 ebook sales are in.

The AAP (Association of American Publishers) has posted the December sales numbers and not surprising ebooks rose dramatically ($49.5M vs $11.25B). When looking at year over year numbers similar % growth can be seen ($441.3M vs $169.5M). What is surprising is that ebooks still only amount to less than 9% of total book sales. (I personally was expecting to see double digits this reporting period of 10% or 11%.

The frustrating thing is the AAP is really not a good indication of overall ebook sales. For instance it does not show all the books sold by indies and small presses - a number which I think is significant. Since most indies and small presses sell many more digital books then print books it would (IMO) have a dramatic shift on the actual %'s.
I really wish Amazon and B&N would stop being so secretive with their numbers as this would tell us so much more than reporting publisher data and would give us some much more accurate data. Oh well...I'm not holding my breath for that one.
The source of the data comes from here. If anyone knows of other sources of ebook penetration I'd love to get a link or two.

Saturday, February 19, 2011

More Stats...February Amazon 100

I recently analyzed the top 50 Amazon kindle list (mainly because I didn't have the time to do 100) I spent the last few days looking at the whole 100 and here is what I found...

NOTE: An easier to read version of the data can be found here.


As before, let's first back out shorts, magazines, newspapers, and a few non-fiction which reduces the 100 to 75.

I mentioned in my last post (well a comment actually, that no "small press" made the list - when expanding to 100 there was 1 that crept on - the people who are publishing My Sister's Keeper for the sake of this analysis I'm going to still treat this book as an indie so we only have 2 categories - those published by major NY houses and those that are "independent".

  • 29/75 - Indie (38.7%)
  • 46/75 - Traditional (61.3%)

This is almost identical breakdown as the Top 50 (39.5% to 60.5%). Something to note - It was in December that I saw the FIRST indies breaking into the Top 100 list. Now it is possible that some were doing it before then but it's only been recently that we've seen sustainable inroads by indies.

I'm sorry to say that extending the list did not add any indie in the above $2.99 price point. I'm starting to see a number of indies increases their prices though, so I anticipate by the time I do this again in April I'll see at least one.

  • 7/29 of the indies priced at $2.99 (24.1%)
  • 22/29 of the indies priced at $1.00 or less (75.9%)

Again this mirrors the bottom 50 (something I did not expect btw - I thought I would see a higher % of $0.99 in the 51 - 100 ranking sneaking in).

I was happy to see Killer (which was #20 a few days ago) jump to #13 which makes it the highest ranked non-$0.99 book.

A few surprises in this bunch of data...

  • Two traditionally published authors have moved to self-publishing their books: The Color of Heaven by Julianne MacLean ($0.99) and Second Son of a Duke by Gwen Hayes ($0.99) Since these two authors already have established audiences, my hope is that they will raise their prices and make some real money from their self-published efforts.
  • A total of 3 traditional publishers are offering books at the basement price of $0.99. #1 - Alone (Bantam), #74 - The Summer Son (AmazonEncore), #81 Spontaneous (Harlequin). I believe Bantam's move was to make Alone hit the NYT digital bestseller list. This is the first time I've seen AmazonEncore take an ebook down that low (but they may have) and the Harlequin doesn't surprise me that much as they offer low priced books fairly frequently as the Romance reading audience is pretty voracious so some "loss leaders" is a great strategy for that market segment.

Of the 75 fiction titles the breakdown by price is as follows:

  • 25/75 (33%) Less than $1
  • 7/75 (9%) $1 - $3
  • 9/75 (13%) $3 - $5
  • 18/75 (24%) $5 - $10
  • 16/75 (21%) Over $10

Breaking them into Low ($2.99 or less), Medium ($3.99 - $8.52), High ($9.99 and above)

  • Low - 32/75 = 43%
  • Med - 16/75 = 21%
  • High - 27 /75 = $36%

Negotiating ebook rights

With regards to signing with a traditional publisher...I can't tell you how many times I see the following post (or one similar).

"Sure, I'll sell you the print rights for that advance. But I'm keeping the digital rights."

This drives me CRAZY! There is no publisher in existence that is going to let ANYONE sign just for print rights and let them keep the ebook rights. It's insane to even think so. Now there may be some small publishers that are willing to do so - and on the surface of things I would say - great go for it - but to be honest any small pub who is that out of touch with publishing to allow such a thing is probably not a good horse to be jumping on in the first place.

Recently after one of these poses, I responded that ebook rights are not negotiable the original poster came back with "anything is negotiable". While I guess that is "technically true" - that you can "ask" for anything in a contract, the fact remains you'll get no traction on this. Period.

The industry standard is 25% of net for ebook royalties - this is substantially higher than most other royalties (6% - 15%) but it does leave an unequal distribution between author and publisher. Let's look at kindle as an example as it is the top selling platform for ebooks.

When priced between $2.99 and $9.99 Amazon will take 30% and the remaining 70% is "net". Since the author gets 25% of that they are actually receiving 17.5% of sales price. That's not bad, but considering the publisher is getting 52.5% for a product that has only incremental costs over the print book they've already produced this seems unfair. This is further complicated by the fact that, at present, a traditional publisher's ebook has no greater advantage (from a distribution standpoint) from the same book produced as an independent. In other words, the concept of coop space does not currently exist in online purchasing - a fact I suspect will change in the not so distant future.

Personally, I think this standard will start to crumble. Mainly because more and more authors will walk away even when the advance is large, because they can make more money getting the whole 70% instead of 17.5%. Publishers will realize that they HAVE to change the %'s in order to have any authors willing to sign. So in the future I think the roles will reverse with 30% going to the publisher and 70% staying with the author.

If I were negotiating a contract, which I am, I would work to get the language to say that the % needs to be evaluated every year and adjusted to the industry standard. That seems at least "possible." This solution is not ideal by any stretch of the imagination. It will result in the author still receiving (IMHO) a smaller percentage then they should, but for now I think its the best that can be hoped for.

I'm interested in what others have seen in their contracts or what they think might be a reasonable alternative.

Friday, February 18, 2011

The Changing Face of the Amazon Top 50

I watch sales trends a lot. It’s important to keep your pulse on the marketplace so you can best judge trends and reach the largest marketshare possible. One of the things I’ve noticed is a HUGE change in the Top Amazon sellers.

Sometime ago there was only one list, and not surprisingly it was dominated by free books. Amazon corrected this to make two lists, one for free one for paid. Once this happened, the list was dominated by traditional publishers most selling their books in the $7.99 - $9.99 range with a few at the $11.99 and $12.99 price points.

I’m going to regularly analyze and post the results of the top 50, which by their very nature have to be snapshots (but they don’t change all that much day to day). To see who was on the list as of this analysis see the screenshot below. This is a bit hard to read (even when blown up) so a better representation can be found here.

First I’m going to remove any “non book” entries. This includes games, magazines, shorts, and newspapers. This leaves us with 43 titles – heavily dominated by fiction

  • 2 of 43 Non-fiction (4.7%)
  • 41 of 43 Fiction (95.3%)

This is not surprising considering this is for an ebook but is definitely not indicative of book sales overall where non-fiction generally outperforms on a 3:2 basis.

Next let’s look at traditional verses independents. This list was virtually devoid of any offering except those that had the backing of bookstore sales for their print editions. This is certainly no longer the case.

  • 17 of 43 Independents (39.5%)
  • 26 of 43 Traditional (60.5%)

That’s quite an accomplishment that shows that you don’t need a traditional publishers to sell a ton of books. How much is a ton? Well anyone on this list is selling tens of thousands of books. At current sales levels a ranking of 30 – 35 is selling about 1,000 books a day. This is based off of Victorine Lieskie’s sales numbers. I suspect the scale is somewhat logarithmic which means that people ranked in the top 10 are doing substantially more than 3 times those at 30.

Unfortunately, indies are getting these sales at a cost – mainly price. Of the indies listed:

  • 13 of the 17 (76.4%) price their books at $1.00 or less
  • 4 priced at $2.99 (3 of which are sequels to a $0.99 book

I'd like to use Stephen Carpenter at #20 as an example. I’m going to guess he sells about 1500 books a day and his per book profit is $3,139.50 which is about $94,185 a month. Even if I’m wrong and say worse case he sells 1,000 books a day (he has to be doing more than that because he is ranked higher than Vicki who was selling 26,000 books a month) that comes out to $2,093 a day which is $62,790 a month.

For those selling for $0.99 they only make $0.35 so for those selling 10,000 a month (probably about right at the 50 ranking) they make $3,500 and at 30,000 a month they make $10,500. Good money to be sure but it doesn’t take a genius to see how much more successful Stephen Carpenter is and again I give him a tip of the hat for bucking the bargain basement mentality.
One problem with the $0.99 bestsellers is it’s difficult to know who is reading the books and who is merely buying them like pebbles on the beach. Without Question Amazda and John Locke are gaining true readers as evidenced by multiple books on this list. Having multiple books available is good for sales for both Independents and Traditional Published Authors and there are many with multiple books on the list:

  • Amanda Hocking: 5 books
  • John Locke: 5 books
  • Suzanne Collins: 3 books
  • James Patterson: 3 books
  • Stieg Larson : 3 books
  • Susan Wiggs: 2 books

Using price to gain readers is a long tradition with independent authors but starting at the end of 2010 we saw traditional publishers dropping prices as well. The #1 best seller is a traditionally published book at $0.99 (I suspect in order to make the new NYT ebook bestseller list) prior to December 2010 I did not see much in the way of prices below $6.99 for traditionally published books I now see the following:

  • Only 1 out of 26 at $0.99 (3.8%)
  • 7 out of 26 in the “bargain category” of $3 - $5 (26.9%)
  • 13 out of 26 in the “traditional price” of $5.50 - $9.99 (50%)
  • 5 out of 26 at the “high end” above $10 (19.2%)

CONCLUSIONS
What does all this mean? Well first off it proves that you don’t have to be traditionally published to move a lot of books. Secondly, New York publishers are making in roads into lower priced books (though most seem to think that $5 is the floor).

My prediction is that the top 100 will become more and more inundated with low cost books which may mean some danger signals for those that are going indie and trying to sell at a decent price. I wouldn’t be surprised if Amazon doesn’t split the list again into three categories: free, bargain ($3 or less), and standard. Personally, I think this would be a good thing for both buyers and sellers as I think there is a core group of readers who focus on the low price reads and having a list exclusively for this segment would mean they can find a larger number of them more readily. It will also help NY as their books won’t have to compete with the people who are pricing their books in a race for the bottom.

I’ll keep you posted as more results are available.

NOTE: I mistakenly thought Stephen Carpenter's book sold at $3.99 it is a $2.99 book so I adjusted this post.

Tuesday, February 15, 2011

Luck and Success

I was reading the comments over at J.A. Konrath's Newbie Guide to Publishing blog. If you don't read this blog on a regular basis, I highly suggest you take a look. Joe is doing the indie book community a great service. His views are pretty opinionated, but so are mine so I can't really call that kettle black.

Joe got me thinking today when he mentioned how luck is responsible for publishing success. I'd have to say that in some cases this could be true but since we can't control something as random as luck I think we should examine those things that we can control.

When I think about what it takes to be successful, in publishing or anything my formula includes:

  • Skill
  • Talent
  • Persistence
  • Marketing
  • Timing

Skill and Talent are closely related but not precisely the same. Skill is something that can be taught. Think of it is as the mechanics of writing. You have the ability to increase your skill. Take classes, read books, write more...all of these will make you a more skillful writer.
Talent is, IMO not something you can learn or teach. It is the ability to create something from nothingness. It is the artistic component to writing. In short it is the ability to conceive of a good story and memorable characters. To me it is the art of storytelling. Unfortunately, this is not one of the things you have control over.

Persistence is definitely something that you have full control over. You guarantee 100% failure if you give up. But persistence isn't hitting your head against the wall with he same results. Sometimes you need to adjust. If your first book isn't making it then persistence may mean writing a second or a third. Michael actually gave up writing for 10 years and if he hadn't picked it back up he would not be as successful as he is now.

Marketing does not mean spending thousands of dollars to introduce your book to the world. It is the acorns from which might oaks grow. You (or someone on your behalf) must do marketing because even the best book in the world won't be read if no one knows it exists. The good news about marketing is you just need to get the ball rolling. Once enough people discover your book and you have skill and talent, then they will spread the word for you.

You would think that timing is not something you have control over, and in many respects that is true, but when related to persistence you actually do have some control. The timing for a book may not be right at a certain moment in time, but times change and if you are persistent your chances of hitting the right book at the right time goes up substantially.

If you hit on all 5 of these cylinders you'll be successful. I believe that firmly. It's not a matter of luck. But what if you don't have all of the above? Are you doomed?
Not really...your job is just a lot harder. The more of each of these components you have in your arsenal the better off you are. I myself weight them as follows (especially when I'm looking for a new author for Ridan).

1 - Talent - since this is the biggest factor that will contribute to words of mouth sales which is the ONLY way to be successful in the book business.

2 - Marketing - you have to prime the pump and once you reach a following you can coast a bit on this.

3 - Persistence because there will be so many times along the way when you feel "it’s not worth it" and want to give up. The only thing that guarantees failure is running out of persistence.

4 - Skill - doesn't concern me too much because it is easily dealt with by others (copy editors etc.) Someone less skillful just makes my job editing tougher but it’s not a total deterrent. Besides, if the story is good, people are willing to overlook a misplaced comma here or there.

5 - Timing - I don't try to follow trends in the industry as they are too hard to predict. Instead, I believe that a good story is timeless. After all Casablanca is as good to watch today as it was when it first came out.

Anyway, that's my thought for the day. I'm interested in your take on the subject.

Sunday, February 13, 2011

Slipping into the Surreal…

Now that I got my post out about Create Space Vs. Lightning Source I can now get to posting some of the other topics on my mind. Two at the top are recent incidents that are just too strange. Both come to me via Writer’s CafĂ© on the Kindle Boards – a great place to hang out if you’re not already.

First, it was pointed out that MacMillian’s most recent contract has a provision whereby they are allowed to create future works from characters or worlds that you create and they will own the copyright to this. I can’t even begin to express what a huge mistake this would be for any author to sign up for. I’m sure that this is in the contract as a sacrificial lamb for agents to insist deletion of. Needless to say, if you are signing with MacMillian you must insist on the removal of this clause no matter how much money they are offering. Your creation, the worlds and characters of your imagination, is intellectual property with EXTREME value and under no circumstances should you relinquish it to another. You are setting yourself up to be screwed in the end and you’ll have no one to blame but yourself because you signed on the dotted line.

In a related note...it was also reported that the author of the Vampire Diaries was booted from their own series by Harper Collins. My knee jerk reaction was outrage until I read the facts. Vampire Diaries was conceived by Harper and the contracted the writing under a work-for-hire contract. Under these circumstances I stand firmly behind Harper Collins. They have every right to substitute an author under such an arrangement. If the author is upset, well again you knew (or should have known) what you got into when you started this. Don’t blame Harper Collins…blame yourself.

Second is an issue related to the Amanda Hocking, who I now refer to as Amazda. As you may recall I posted about her a few posts ago (and glad to see she is finally getting her props – Now on the USA Today Best Seller’s list and had a major USA Today article). But to make her new found success even more surreal…A book has been posted on Smashwords entitled: Amanda Hocking and her Success Secrets. This would be a great book…except that it wasn’t written by Amanda and from everything I can tell, the author, Laura Donoghue, didn’t even interview her for.

What’s even more amazing is this book highlights a few other authors including: H.P. Mallory, J.A. Konrath, and yes my very own Michael J. Sullivan! When I told Michael about this he Skyped back…”You know we have to buy it as I really need to know how we did it.” I did and read it 1/2 an hour - there's not much there.

Again Ms. Donoghue, did not interview myself or Michael. The book as a whole is cut/pastes from blogs (about 50% of the book contains Amazon reviews of the works of the profiled authors) there is really no insights from this book – Just a few numbered secrets that are so obvious they are laughable. In general the book is poorly researched some mistakes I pointed out in my review of it:

1 – Michael J. Sullivan who wrote The Riyria Revelations is NOT the same Michael J. Sullivan who wrote necessary heartbreak. A quick review of the Amazon author pages would have made this clear.2 – She states that Michael got to $30,000 a month in sales in 8 months when it actually took several years.3 – The stats she stated about multiple books (attributed to a selection of ebook publishers)
  • 1 book published = 10 books sold per month
  • 2 books published = 50 to 60 books sold per month
  • 3 books published = 200 to 400 books sold per month
  • 4 books published = 1,000 books sold per month
  • 5 books published – over 10,000 books sold per month

Are in fact only Michael’s numbers – not the indie community at large – that was taken directly from a post I made.

4 – Rule #4 Set a Low Price indicates:“The highest price a newly self-published author should put on there ebook, is $2.99, and the only reason you should go that high, is to receive the 70% royalty that Amazon pays on books between $2.99 and $9.99.”

But Michael’s books are priced $4.95 to $6.95. And since he is one of the spotlighted authors shouldn’t this strategy have been explored a bit? I’ve posted numerous times (including test results) arguing for a higher price point and the success that can be achieved from such. If this book is telling the secrets of these authors then Michael’s pricing doesn’t support the premise.

I’m of two minds on this book:

  • 1 – It is clearly an attempt to make money off of Amazda’s success – and doing so under false pretenses as far as I can say.
  • 2 – The author was very complimentary to Michael and his works and as it is free publicity I’m not complaining too much.

Anyway, these are two things going on today that are on the top of my mind and so I thought I would share.

Create Space Vs Lightning Source

07/14/2011 - I've completely revised this post based on new information that has come to light since my original post back in February. If you've read this post in the past it might be worth a re-read. What's the new information?
  • Some rebuttals to my original post that pointed out you can get 20% discount with Amazon rather than 40%

  • A recent email that alerted me to Amazon not keeping Lightning Source titles well stocked
We'll get to both of those in due time but lets start off at the beginning...

When it comes to producing paper books there is no better choice, in my opinion, then to use POD (print on demand) technology. This reduces the risks involved in the upfront cash investment of doing a large offset print run. Besides, I've put out for bid various copies of Ridan's books in quantities from 50 - 500 and I've never found a printer to match the per book pricing you can receive through POD.

When it comes to POD the two big players are CreateSpace and LightningSource. From here on out in this post I'll refer to them as CS and LS respectively. I've used both of them quite a bit in the past, and which one you use will depend on what exactly you will be doing with the printed books. If you are printing them for your own use (to sell direct on your website or to use as review copies) the answer will be different then if you want to distribute through channels such as Amazon and bookstores.

A quick note: Neither CS nor LS are publishers. They are vendors (printer/distributors) that require you to provide them with print ready files. Both offer add-on services such as editing, layout, and cover design but you should NEVER purchase these services from either organization (You can get it better and cheaper elsewhere – sigh…another topic for another day). So for the sake of this post we’re going to talk about what you SHOULD use them for.
  • Producing high quality printed books
  • Distributing printing books.
  • Providing books to yourself for selling direct (via your website) or giving away to reviewers

QUALITY
Let’s first talk about the quality. They are nearly indistinguishable. (I suspect they are using the same equipment). The covers and interiors come out as good as any book you’ll find in a bookstore. Yes offset is done with ink, and POD is basically a laser printing (using toner) but unless you put a printer's loop on the page you'll not see the difference. If none of my previous sentence made any sense to you, don’t worry – it just says that the quality is very good for both and you should not be concerned.

NOTE: If you have a lot of black and white photographs - I suggest you proof carefully (and possibly adjust the images) as this is one area where there are differences between toner and ink. But, if your book is largely just black text on a white page - you'll see no differences.

I've printed the same book, from exactly the same files (well adjusting for spine width a bit -- LS uses slightly lighter weight of white paper (I've not used their creme so I can't comment) and so their books are a tad thinner than a CS book) and there are very slight 4-color color differences, but both come out looking very good.

Someone else pointed out to me that one uses white glue (LS on the spine and the other a yellow glue (CS) but that's picking at nits and the important point is that both glues do what they are suppose to which is keep the pages between the covers (something I personally had a bad experience with when using a short-run printer that was neither of the above).

Another point that should be made…especially by people who publish through the likes of iUniverse and Xlibris etc. These companies use CS and LS for their printing. In the past I believe most of the big publishers used LS but I’m sure they “shop this around” frequently and I can’t say for sure who they use now but I’d lay dollars to donuts that it is one or the other of these two companies.

COSTS – A comparison
Okay, so let’s compare the costs. For per book printing, both are priced in a similar way – in that they charge based on # of pages.

Per book print fees:

  • CS is # of pages x .012 + $0.85 for cover (for any book)
  • LS is # of pages x .013 + $0.90 for cover (for books sold through channel)
  • LS is # of pages x .015 + $0.90 for cover (for books sold direct to publisher)

This doesn’t seem like much difference but lets do the comparison for a 300 page book

  • CS = $4.45 (all books)
  • LS = $4.80 (those sold through the channel)
  • LS = $5.40 (those sold to you)
We'll talk more about channel selling - but for now just know this is any book bought through a retailer (either online like Amazon, or in a retail store such as Barnes and Noble).

If you need books yourself (for reviewers or direct selling on your website) there is no question that CS is the better choice and even if you decide LS is going to be your distribution partner I suggest you use both (yes you can use both) for books you buy for yourself.

Now let’s look at “setup fees” they are:

  • CS $39.00 per title (using the PRO plan – which you should ALWAYS use)
  • LS $75.00 per title ($37.50 for interior, $37.50 for cover)

Proof fees?

  • CS = price of book + shipping so about $7.00 - $9.00 depending on shipping method selected
  • LS = $30.00

Yearly fees?

  • LS = $12.00 per title per year
  • CS has one – but it’s been waived every year I’ve been with them so I can’t remember what it is – I think it is $10 - $20 or so but since I’ve never had to pay it I don’t keep track.
So for setup you can expect:
  • LS = $117 per book
  • CS = $46 - $48 per book
Distribution
Okay, now we come to the single biggest part of the CS vs LS equation and that is how these printed books are distributed. For those that don’t know books are not sold from publishers to bookstores they use a distribution channel. (Bookstores don’t want to write 10,000 checks to 10,000 publishers – the publishers will use a few (or just one) distribution partner and write only one check to them. The distribution partner then manages getting the books to the thousands and thousands of various sales outlets (both online and physical).

Lighting Source
LS is a subsidiary of Ingram. For those that don’t know Ingram is the 800-lb gorilla when it comes to brick and mortar bookstores. I would venture to say that almost any bookstore "can" order through Ingram though some probably order from other places as well to get best pricing. Being distributed through Ingram doesn’t mean store shelf space it means the “ability” to buy the book. (More on this in a minute). With LS you can set your discount to anything (as low as 20% though they recommend 55% to get maximum exposure)

Create Space
CS does not get you into Ingram. It puts you into something called the Expanded Distribution Channel which is stated as: “the potential to distribute your book to a larger audience through more outlets including: retailers, bookstores, libraries, academic institutions, wholesalers, and distributors.” Remember what I mentioned about bookstores wanting to write 10,000 checks? Well Amazon is a big enough player that many will add Amazon to their list (like Ingram) but unlike LS, CS does not detail who they are or give you any guarantees. The discount on the EDC is pretty high (60%) but that is pretty standard because the people they distribute to need to have their cut of the pie.

Channels
So what can we say about both companies and distribution….they give “some” opportunity to get the books to “other” outlets.I'm going to break distribution down into several important channels:

  • Amazon (because they are the biggest online retailer)
  • Brick and Mortar Bookstores (because most authors want their books to show up here)
  • Other Online Retailers
As I mentioned in the beginning, most of the books sold by Ridan are actually ebooks. For the print books our sales are:
  • Large majority from Amazon
  • Next highest sold direct through our website
  • A few books sold through other distribution channels
This is because of how we align our business goals. If you've got a model that attempts to maximize bookstore sales (especially those in brick and mortar) you may make different choices than I did.

Amazon Selling
Since this is our biggest dead tree market we want to maximize the income from this channel. In this case, LS is the clear winner as you can set your discount in LS to 20% rather than the 40% that CS will take. So let's revisit our 300 page book ans assume that it is being sold on Amazon for $12.95.
  • LS: $12.95 - $4.80 (print) - $2.59 (distribution) = $5.56 profit per book sold
  • CS: $12.95 - $4.45 (print) - $5.18 (distribution) = $3.32 profit per book sold
That's a HUGE difference. If you compare the difference in setup fees (you are break even after selling 32 books and from that point on will be making $2.24 more if sold through LS.

But there are some catches.
  • With LS you can't choose different discount %'s for different channels. And bookstores generally want a 50% - 60% discount so by offering 20% your chances of selling any in brick and mortar stores is slim at best.
  • When using CS Amazon has 40% margin so they will discount your books - I've seen as much as 32% off offered on books by Ridan sold through CS. Buyers like discounted books so this "sales price" may entice more purchases. At 20% discount I've never seen Amazon put those books on sale (they are already too slim on their margin). Now all this being said - there is no guarantee what books Amazon will discount and which they will not so just because you use CS will not guarantee discounting.

  • In Stock - if you use CS your books will always show as "in stock". In the deep dark past there was a time when Amazon removed any non CS POD books - which brought outcries from many for obvious reasons. They got into huge trouble for this and restored the titles but it appears that now they may be cutting inventory kind of close when ordering books from other distributors. A recent article (7/7/2011) in Self-Publishing Review alerted me to this. In fact I've been checking my non CS titles daily and sure enough Nathan Lowell's Full Share is constantly teetering on being "unavailable". He currently has 2 copies available but it has been fluctuating between 7 and 9 most days and I've not seen it "fully in stock" since I started watching it when this article came to my attention.
Bookstore Channels
Okay now let's consider bookstores. As previously mentioned Ingram is HUGE in this space so LS has a competitive advantage over CS
  • LS: Is owned by Ingram and uses them to distribute their titles.
  • CS: Will not get you into the Ingram but they have their own Expanded Distribution Network (EDC) but they will take 60% margin instead of 40%
Ingram distribution is HUGE and if you plan on focusing on brick and mortar stores than this is the much preferred distribution partner. Now before you get too excited, it does not mean that your books will be sitting on a bookstore shelf. Bookstores actually work more like consignment shops in that they don't pay for product they put on their shelves. They order books and 60-90 days later when the bill comes due they have the option to ship back books that did not sell and they do this often. Because POD books must be paid for when the order is taken, many bookstores won't buy them even if you've setup in LS for them to be returnable since they have to pay money up front, then get it back later which is much more difficult then just shipping back books that they didn't have to put out any up front cash for.

So the books may not be on the bookstore shelf but it usually means that someone can walk into a store with an ISBN, and special order a book in the Ingram chain. The bookstore may require the person requesting to "pay up front" and some may not have the systems that allow them to order POD so even though you are in Ingram but your chances of special ordering are better if you are with Ingram then if you are not.

And once again there is a catch...remember that I said that you couldn't have different discount rates when using LS? So if you set 20% to maximize your Amazon sales you've probably shot yourself in the foot for any bookstore sales. Generally they want 50%-60% discount rates so when they see you are only offering 20% they may not think that it is worth it. Again, this may be a situation where you do a little hybrid - use CS for Amazon selling (and take 40%) and set your LS discount rate at 55% (and probably specify returns allowed) to be most attractive to bookstore selling.

Other Channels
As far as non Amazon and non bookstore I think that CS and LS are about equal. If I compare my sales from both LS titles and CS titles that I've done through Ridan I sell a bit more in the EDC than LS but the differences in numbers and the differences in discount rates are not enough to make one better than the other.

Using Both
There's no reason why you can't use both CS and LS. And in fact I do this. In the beginning I used LS with a 55% discount and returnables to get Ingram distribution but sold directly through Amazon for 40% discounts (and saved 15%). The problem...LS even with their Ingram channel was not moving many of my books through their channel. In fact the $117 setup fee took me a LONG LONG time to make back and so for awhile I abandoned LS altogether. But...when I found out I could get 20% discount on Amazon I started using LS again (primarily for books sold to Amazon) and purchased any books I sold directly with CS.

If you do both here's what you need to know.
  • You don't need two ISBN's - In both cases they are the same format of book (trade paperback) so only one ISBN is needed
  • The Interior PDFs can be exactly the same file - no formatting changes required
  • The Cover PDFS will have to be adjusted slightly for different spine widths once you know the page count you need to go to each site and look for their "spine calculators" to determine the size of the cover.
Back in the day when I used LS for Ingram distribution I actually priced the Ingram book a bit higher than the Amazon one (because I was doing a 55% discount instead of 40%) I actually had the same ISBN but the barcode on the cover of the LS was slightly different because for instance a book I sold for $12.95 at Amazon I might sell at $13.95 through the Ingram channel.

CONCLUSIONS

So, let’s wrap up this very long post….

  • DTB (dead tree books) are worth while to sell directly (via your website) as there are no distribution fees (just a small credit card processing fee) buy books to be sold this way from CS.

  • Amazon – the “cheapest” way to do this (lowest discount) is to go direct to LS where the discount is 20%.

  • Distribution channel of LS should be better than CS (Ingram is a powerhouse) but you negate this if using 20% discount for Amazon. If you really want to maximize the Ingram channel you should have a discount of 55% and mark your books as returnable.

  • If your sales volume is VERY low on print books it may take you awhile to earn back $117 setup fee for LS.

  • Quality is the same between both

If you read my original post on this subject I said that CS was the clear winner but that was before I knew you could do the 20% discount through LS and that has shifted my thinking. So now it really comes down to which distribution channel you want to maximize and you need to choose your partner and the discount rate carefully.

As always I’d love to hear what you think about this post.