The Taxman Cometh…

No, this is not a blog about the fact that I am going to spend this weekend finishing royalty statements and doing my 2013 income taxes. Rather, it is a blog about another annoying set of forms I apparently now need to fill out – applications for state reseller identifications.

I live in a state (New Hampshire) that does not have an income or sales tax, but many of you live in states that have both (and I do feel for you). I found out last week that for me to ship you books (even complimentary author or review copies), my printer is now going to charge me sales tax based on the state you live in. Their reason? Because the states are coming to them and demanding that they charge sales tax on any books they ship that are not for resale. Further, most states will only consider a shipment not for resale if the publisher has a reseller’s permit on file with them. Last time I checked there were 45 states that have a sales tax, so I am not looking forward to all the applications.

I contacted my printer and informed them that none of the books I ship are the result of retail sales – they are either copies authors have ordered to give away or for signings (in the second case they would in fact be for resale), or they are complimentary copies of the book. Thus, none of them are subject to sales tax. It would actually be as easy as the printer adding a checkbox on the order form saying “complimentary copies” and not collecting sales tax on those orders. I was informed that, in order to make things easier for the printer, they have adopted a “one-size-fits-all” approach to this problem. Thus, unless I file paperwork with all of the states requiring reseller IDs and then file those IDs with the printer, I will be charged sales tax even on the free books I ship.

I know the states are claiming that they are just doing this to “level the playing field” so that stores can compete with online retailers. However, when you consider shipping, online purchases are often just as expensive as in-store purchases, even with the sales tax. The truth is this is all about state revenues – when you are a government it’s always easier to find new sources of income than to control your spending.

While I could have books shipped to my home and then reship them (avoiding the sales tax that way), I would now be incurring twice the shipping costs for each order. Thus, I really only have three options. The first is to pay the tax. The second is to file paperwork with every state that has a sales tax affirming that nothing I ship to their state is subject to sales tax. The third is to find a new printer that is not implementing a one-size-fits-all approach to this problem.

I suspect most people who have known me for a while can guess which option I am looking into…

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Size Does Matter…

About 13 years ago, when we bought our current home, my wife and I decided it was time for a big screen TV. Off we went in search of the perfect home theater system. People who are old like me will recall that 13 years ago rear-projection TVs (there were no LCDs back then) cost several thousand dollars. In fact, the difference in price between the 55 and 60 inch units was over $500. While I was in the middle of making the argument for saving $500 and asking if we really needed the extra 5 inches of viewing space, my wife suddenly turned to me and yelled loud enough for everyone in the store to hear “Contrary to what you men believe, size does matter!”

For the record, back then they also did not make washing machines large enough for a human being to hide in.

So what does this have to do with publishing? The answer is that a few weeks ago we received a manuscript that was approximately 12,000 words long about coping with fibromyalgia. The author explained that the reason for the short length of the manuscript was that people with these types of diseases don’t want to read long books looking for help – they want quick answers. While I can appreciate why a book of this length would be perfect for the target audience, some of the realities of publishing make it difficult to bring this book to market:

  • For books shorter than 108 pages we pay a fixed price for each copy which is printed. That means we pay the same amount to print a 50 page book as we do for a 100 page book. The issue is that we can’t charge the same price for a 50 page book as for a larger book, so the profit margin on a 12,000 word book (which is about 50 pages) is too low to cover the cost of editing, cover design, typesetting, and press fees (which are what we are charged by our printer to review the digital images of a book for printing).
  • The obvious question is why not come out with the book as just an eBook? The answer is there are two ways one can publish an eBook. The first is to do a quick spelling and grammar check, find a single stock photo for the cover, and upload the Word document and cover for conversion to an eBook format by the vendor who will sell the book (for example, Amazon, Barnes and Noble, or Smashwords). While this is a quick and inexpensive way to publish a book, it often does not result in a quality product – there is only so much spelling and grammar checks catch, and the programs that automatically covert Word documents to eBooks can sometimes result in poor formatting. To ensure a quality product requires the same level of editing, consideration for the cover design, and “typesetting” (in this case creating the HTML files that will be converted into an eBook) as coming out with a paperback. In truth the only thing we would save by coming out with eBook-only versions of our titles would be the press fees the printer charges. Given that we also could not charge much for an eBook of this length, again we would probably not cover our publication costs.

In the past I’ve spoken about why we rarely publish books over 100,000 words, both because of the associated costs and what readers expect. In the case of manuscripts below 45,000 words, the reason we don’t publish them really come down to cost – the cost required to produce a quality book of this length would probably not be recovered due to the low retail price a book of this length would require. In instances like this, my recommendation is often that authors find a reputable editor (more on this in a future blog) and self-publish the manuscript.

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From the Dead…

I promise this is not another blog about why I’ve been gone so long, because in fact it’s been about two weeks. I also promise I am not preparing our company to publish the material required to survive the Zombie Apocalypse, nor are we starting to publishing books targeting a zombie audience in preparation for the upcoming event. Finally, this is not a blog to announce that, in fact, the Zombie Apocalypse has already occurred and resulted in the creation of “Tools of the Publishing Elite.”

This is a blog about a letter from an attorney.

I pick up the mail about three times a week from Divertir Publishing’s P.O. box, and I must admit I don’t often open the mail until I am sitting comfortably at my desk with a glass of cognac. That is also how I sometimes read your query letters, and given that it puts me in a much less stressful mood after a busy day you should be glad that I do. But a letter from an attorney’s office is something I thought should be opened right away. Are we being sued? No, the letter was something much more mundane, but I though it warranted comment.

The letter was from the Executor for the estate of a man who had recently passed away. In the assortment of items that the estate needed to “find a home for” was a manuscript. The letter was asking me if I would be interested in publishing the manuscript. I can’t fault the attorney for his inquiry – by law the manuscript is an asset of the estate, and as Executor he has a fiduciary responsibility to try and get as much for the assets of the estate as possible, even if the asset was created on an old typewriter. But after thinking about it I realized that a small publisher bringing this book to market would not make sense, either for the Executor or the publisher.

In the case of the Executor, he wants an advance that will most likely cover, if not exceed, the expected royalties for the book. Again I can’t fault the Executor  for this – he probably does not want to spend the next five to seven years cashing royalty checks, and again has an obligation to obtain as much for the asset as possible. But there are two problems with approaching a small publisher. First, most small publishers won’t give the Executor the type of advance he is looking for. Second, it’s not a good business decision for the small publisher. As I’ve said before, people do not buy book because they say Divertir Publishing on the title page. They buy books because of who the author is or because the book was recommended to them. Thus, at a time when over a million books – either from traditional presses, small presses, or self-published books – come out each year, an author who is not actively engaged with their readers and potential readers will probably not be discovered by new readers. An author who is not present at all, for whatever reason, will probably not be successful.

So for now Divertir Publishing will not be looking for manuscripts to publish at estate auctions – at least not until the Zombie Apocalypse, at which point we may need to rethink this business decision…

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Comets and a New Year…

I’m guessing by now some of you are wondering if I am in fact a comet – I briefly appear, only to disappear again leaving people to wonder if there is any pattern to my orbit (and thus my appearances). This month the thing that took me away from writing my blog was our government – in particular the IRS. In short, I needed to send out 1099-MISC forms to our authors by January 31st, which means I don’t really get until April 15th to worry about my taxes like most people.

At the beginning of a new year, most people write resolutions (like “I will blog regularly”), which they promptly ignore as soon as their orbits take them someplace else. Instead I wanted to write a list of the things I didn’t do last year and why they are important. If nothing else, this list will give Jen Corkill, our new Senior Editor (congratulation Jen), something to point to as she kicks me in the butt to remind me why I need to do something.

  • I’ve said this before: while our website is functional, it is not flashy. It’s also probably not someplace where the “hip and cool” kids want to hang out. We need to make our website much more interactive so that people will not only want to visit the site, but will want to stay a while and browse. This is the best way we can get the readers of one of our authors who visit our site to “discover” the other authors we’ve published, and we owe this to our authors as a way of helping them market their books.
  • As part of our new website, we had planned an online magazine (which would also be available in eBook format) that would contain a mixture of short stories, author interviews, and useful articles for authors on what we are looking for in the way of new titles. This is one of many ways we can keep the content on our website from becoming static, and we need to move forward with the magazine this year.
  • I must admit that I’ve never been much into social networking. Perhaps it’s because I’m usually up at 2 am typesetting manuscripts, working on cover art, or sending emails and find I just don’t have time for it. But in the age of digital publishing, it’s recommendations from others that make people buy books, and the best way to have a large group of people discover a new book is through social media. This means it’s time for me to once in a while turn off the desktop publishing software and my email in order to take a stroll into what some people now consider the “real world” – or as real as the world can get on the internet.
  • People don’t walk into a bookstore and say “I would like to buy the latest book by Divertir Publishing” – they walk in and say “I would like the latest book by a certain author.” But while it is true that authors need to actively promote their books by doing things like blog tours and setting up an author site, we need to get better at helping authors get started with what to some is considered a daunting task – marketing. This goes hand-in-hand with updating the website – we need to be actively searching for places (like other web sites and blogs) for our authors to promote their books, because at the end of the day their success is our success.
  • I have always believed that short story collections are important for publishers in that they are a great way to expose the work of a large number of writers to an audience at one time. I must also admit they are one of my favorite things to read. Divertir Publishing started by publishing short story collections, and I think it’s time we get back to publishing more of them (and maybe even trying to do a poetry collection again – the last one was cancelled because we did not get enough submissions). Other than the fact some of my favorite authors write short stories, it makes good business sense to begin working on more anthologies again.

In September Divertir Publishing will be celebrating our fifth anniversary. This is no small event, in that 95% of new publishers do not survive past their second year. I want this year to be special, and think we have the staff in place to make that happen. If you are interested in joining us in making this a special year, either by reviewing submissions we are considering for publication, editing a short story collection, or providing content for the online magazine (either short stories or articles), feel free to contact me at info@divertirpublishing.com.

Now I just need to settle into a more predictable orbit…

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“Where’s Ken”…

The short answer is that, for the past two and a half months (minus two weeks I got to come home), I’ve been in Rochester, NY.

The longer answer is that, as most of you who have read my blog for a while know, I work as a software performance engineer. In fact, readers of my very first blog (which might be limited to my cats) know that it was consulting work I was doing related to software performance on handheld devices, a bad experience with an author mill by a friend who is an author, and the receipt of my first Kindle that made me begin to explore digital publishing and to ultimately start Divertir Publishing.

For the past two and a half months, a major software release by the company I work for has required me to live in a hotel and work some pretty long hours, which in turn has given me less time to focus on the publishing company. This has caused me to miss some deadlines, including getting out the September royalty statements. For this I do owe our authors an apology, because I should have been better about communicated why there was a delay. I’ve already decided one of my New Year’s resolutions will be to stay more in touch with our authors even when I’m busy and to blog regularly, and have tasked our senior editor to nag me about it if I don’t. I am also currently finishing up the royalty statements and will get them out this week.

It might surprise some of you to hear I have a “day job,” and that in fact Divertir Publishing is my second job. It shouldn’t – just as most authors do not make enough off book sales alone not to have a “day job,” the same is true for many small publishers. In fact, when you take royalty payments, printing costs, press fees, production costs, and the fact Divertir Publishing donates half the proceeds for two of our best selling books to charity, I actually make very little money as a publisher.

So why do I do it? There are two answers to that question. The first is that I do believe the digital revolution is changing the way we read and buy books, and that as the playing field becomes more level independent publishers will become more important. The second reason can best be summarized by a book we currently have under contract. It’s a collection of short stories on homelessness. Short story collection never sell well, which is why many publishers won’t consider them unless they are by well-known authors. But, quite frankly, these are stories that need to be told. This is one way small publishers can serve the greater good – by publishing stories that need to be told by authors whose work might not be considered “commercially viable” by larger publishers. In fact, we are currently contacting a women’s shelter to discuss donating half the proceeds from this short story collection to the shelter, so in the end publishing this book may also help those in need.

So why write this blog? The reason is that I know at least two of our authors are very angry that the September statements did not go out on schedule. While I will apologize for not communicating why I have been “missing in action” for the past two and a half months, I will not apologize for the reason. The money I make as a software engineer is the reason I can invest in Divertir Publishing. While there will be times that the “day job” leaves me very little time for other things, it is also what allows me to publish those stories that need to be told.

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Every Little Bit Helps…

I’ll start by apologizing for how long it’s been since my last blog post. You might find this hard to believe coming from a publisher, but for the past two months I’ve been at a loss for what to say.

My birthday, April 15th, has long been known for tragedy: in 1865 came the death of Abraham Lincoln, while in 1912 the sinking of the Titanic became news. This year the date became known for another tragedy – the bombing at the Boston Marathon. To use the word tragedy in the last instance might seem like an attempt at being politically correct, in that it was an act of terrorism, but for the families affected by the events of that day no other word seems appropriate.

As if Mother Nature decided to remind us of her potential for devastation, a little over a month later on May 20th Moore, Oklahoma, was struck by an EF5 tornado.

The thing these tragedies, and all tragedies I can remember, have in common is the response by the American people. After the Boston Marathon bombing donations poured into funds set up to help victims, while after the tornado in Oklahoma volunteers descended on affected communities to help with the search for survivors and cleanup. Everyday Americans became heroes, not just by their actions on those days and the days that followed the tragedies, but through their generosity to those in need. Chris Rakunas wrote of this generosity in his book Tears for the Mountain, where he recounted his trip to Haiti to deliver donated medical relief supplies after the January 2010 earthquake in Haiti.

Divertir Publishing currently donates half the proceeds for two of our books to charity. Half the proceeds for Hurricane, by Jenna-Lynn Duncan, go to the New Orleans Area Habitat for Humanity (the book is set in pre- and post-Katrina New Orleans), while half the proceeds for Tears for the Mountain go to the New Life Children’s Home, the orphanage in Haiti featured in the book. To date we have donated a little over $1,000 to these two charities. While this is not a huge amount of money, as my mother used to say, “Every little bit helps.”

I’m going to credit a recent submission, a collection of short stories on homelessness, for helping me with my writer’s block. The book is now under contract, and we are currently in discussions to donate half of the proceeds for this book to a shelter for woman and children. In addition, I have reached out to a few of the charities set up for victims of the Boston Marathon bombing in the hope of setting up similar arrangements. I will keep everyone posted on these discussions.

My reason for writing this blog is to remind everyone that, when others are in need, it is important for those of us that are able to come to their assistance, even if it’s only donating a few dollars to a charity. Because when people are in need, every little bit helps…

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Being Less Serious…

It seems lately that a lot of my blogs have been very serious – discussions of our policies, blogs about how technology is changing publishing, advice for authors, rants about some of the less-than-charitable emails we get in reply to rejections, and tips for creating a brand if you’re an author. So this week I decided a little levity was in order.

The word “Divertir” is French for “to amuse and entertain,” and I’ve long believed that not only should our books accomplish this, but so should our work environment. The fact that we have fun doing what it is we do (even when it’s being a “Tool of the Publishing Elite”) should be evident both to our authors and readers. And if some of the things we do aren’t fun, maybe it’s time to change that (this is a subtle hint to the staff to speak up). Life is too short…

In the past I’ve discussed the fact that our website is long overdue for an overhaul, and that will occur this summer. The goal in part is to make it a fun place to visit. One idea I had was to randomly display a funny “tag line” under our name to replace the current slogan, “Books that amuse, inform, and inspire.” So without further ado, here is the list I’ve come up with so far for new “slogans” for the Divertir Publishing website:

  • Because the zombies will need books after the Apocalypse.
  • Because minotaurs really are the next big thing.
  • Because politicians should not be our only form of entertainment.
  • Because cursed-immortal-servants-of-the-Underworld need to have their stories told too.
  • Because Silly Putty is hard to read (you might need to be my age to get this one).
  • Because we need to show the UFOs there really is intelligent life here.
  • Because we’ve always wanted a legitimate excuse to Google “sexy cowboy photos” and book covers seemed as good a reason as any.
  • Because we’ve always wanted a slush pile.
  • Because we thought a “slush pile” involved Italian ices and tequila.
  • Because using Tarot cards and Ouija boards to select manuscripts for publication is as good as what the large publishers do.
  • Because being on a reality TV show or being the dog of a celebrity does not make you qualified to write a book.
  • Because we know a book is just waiting to come out of you, just like the monster in Alien.
  • Because there are wing nuts on both sides of the political screw.
  • Because even conspiracy theories are sometimes true.
  • Because laundering money isn’t what it used to be.
  • Because the way I was squandering the family fortune was taking too long.
  • Because a glass of wine goes better with a good book than with Unreal Tournament (I’m probably showing my age by my selection of computer game).
  • Because the end of the world is coming so what the hell (I came up with this one before the Mayan end-of-the-world passed).
  • Because a book commits suicide every time you watch reality TV (yes, I “borrowed” this one off an amusing poster that was on Facebook for a while).
  • Because my doctor keeps changing my meds.
  • Because we’ve always wanted to be called “Tools of the Publishing Elite.”

Please feel free to make suggestions.

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