Hacking my Keurig 2.0…

For Christmas last year we purchased a Keurig 2.0 coffee maker. People who know me will tell you I drink a lot of coffee (usually with cognac in it when I’m reading queries). I took it out of the box, put in my favorite ‘Donut Shop Coffee’ k-cup, and was floored when I saw the “Oops, this package wasn’t designed for this brewer” message. The cup worked fine in my previous Keurig brewer.

Because almost no one reads the instructions on a coffee machine, I called Keurig. They informed me that you now had to purchase your coffee from them because they had included a new ‘technology’ to better brew coffee. Read this to mean they included DCM (Digital Coffee Management) to prevent competitor’s k-cups from working in the machine unless the competitors paid them a large licensing fee for the ‘technology.’ I told the woman from Keurig I would stop drinking coffee before I was forced to buy overpriced k-cups from them and that I was returning the machine. I then hung up and did what I suspect most people who purchased the new machine did.

I Googled “Keurig 2.0 hack”…

The answer is simple. Cut the ring off an “approved” k-cup and tape it to the “unapproved” cup. This is what I’ve done with my reusable EZ-Cup and SoloFill cups – I prefer buying bags of coffee, both because of the price and because the reusable cups are more environmentally friendly. The Roger’s Family Company website has a nice collection of videos for all the hacks available. They also make a device called the “Freedom Clip” that will disable the new optical scanner technology in the Keurig 2.0. I’ve already ordered my Freedom Clip and will let everyone know how it works.

So what does the price of coffee have to do with the publishing business, other than the fact I rely on my cup of coffee to read queries? It has to do with setting the price for your products. In my blog on Profit and Loss statements, I talk about doing market research to determine the optimal list price for your book. Each k-cup from Keurig costs 3 times the amount of buying bagged coffee and the filters for my reusable EZ-Cup and almost twice the cost of k-cups from most of their competitors; this is the main reason I don’t buy coffee from Keurig. If you price your book too high for the market people will not purchase your book. Instead, people will go someplace else for their reading entertainment, or they will find a way to hack the DRM on your eBook. They may even hack their coffee machines just to make a point…

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Publishing Costs…

In my last blog I wrote about creating a profit and loss statement for a book. Let’s assume we are producing a children’s book in a 5 1/2 by 8 1/2 inch format with a black and white interior. The book is 150 pages after layout and has 15 illustrations in the interior. Finally, based on a survey of similar books, we conclude the price the book can be sold for is $8.95.

The above book can be printed for $3.15 using print-on-demand (POD). Dividing the printing cost by 0.60 gives $5.25 as the minimum price you need to charge to cover the printing costs and a 40% discount to retailers. This is less than the price we can charge for the book based on our research. So does this mean the book can be sold at a profit?

It depends.

The next step in the calculation is to estimate total net sales and costs. Because the average books sells about 500 copies I use this in my estimates. A forty percent retail discount off a list price of $8.95 leaves $5.37 per copy for the publisher, which will be your net sales for each book. Multiply this by 5oo books to get the total net sales of $2685.

Now compute your expected cost:

  • Your cost of printing is $3.15 times 500 books, or $1575.
  • If you are publishing someone else’s manuscript you need to pay royalties. We pay a 12.5% royalty on net sales, which in this case is $336.
  • Proof reading will cost $3 per page on average, while copy editing can cost $4 a page and content editing can cost $7.50 a page. For this estimate I’m going to assume $4 a page, or $600.
  • Illustrations can cost anywhere from $50 to $1000 an image, depending on the type of image (full color or black and white line art) and the amount of detail. For the children’s book I’m going to assume $750 for 15 interior black and white images and $200 for the cover.
  • Professional interior layout with a desktop publishing program can cost as much as editing, so let’s use $600 in this example.

This gives total costs for producing the book of $4061, which is $1376 more than the net sales for 500 copies. In this example you would need to sell 1387 copies of the book to cover your costs. Even if you are self-publishing (which means you are not paying royalties to another person) and leave out the interior art, your total costs are still $2975, which is more than the net sales of $2685.

If a book cannot be produced at a profit (where total net sales are greater than costs), a publisher will not move ahead with a project. If you are considering self-publishing and the above analysis shows you cannot produce the book at a profit then you should also consider whether to move ahead with the project.

The following is a simple formula to determine how many copies of a book you would need to sell to cover the costs of a self-publishing package:

Copies to sell = Cost of the package/(0.6 * list price – cost of printing)

If the cost of a self-publishing package is $3000 (including all of the above costs like editing), your book sells for $14.95, and the printing cost is $4.15 (which would be the cost of a 250-page book with a black and white interior), you would need to sell 623 copies to break even on the investment.

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Profit and Loss Statements…

People who visit our website know that we do not publish children’s books, yet every now and then we get one submitted. Recently, we received one my middle grade reviewer (and 11-year-old daughter) really liked. But calculating the production costs made it clear that we were not the right publisher because we could not produce the book at a profit. In publishing, this type of analysis is called creating a profit and loss statement. I want to walk everyone through this analysis, in that whether you are a publisher or about to self-publish your first book this is a useful tool. I will use a children’s book as my example.

Step 1 – What format should be used? Cookbooks are usually hardcover books for a reason; they stay open easier when on a countertop. Similarly, children’s books are usually hardcover books because they will withstand more “gentle reading” than a paperback. Figuring out what format your book should be in is the first step, because your printing costs will be determined by the format. Also consider how large the book should be: 6 by 9 inches is a standard format, but books in your genre may require a special size.

Step 2 – What will the book cost to print? A children’s book with color illustrations will need to be printed in full color, and an 80-page full color book will cost $11.88 per book if produced using POD technology on 70# paper (which is what most self-publishers have access to).

Step 3 – What can you sell the book for? The research I did suggested that on average an 80-page hardcover full-color children’s book will retail for about $14-$15, unless it’s a large (8 1/2 by 11 or larger) format.

Step 4 – Taking the discount into account, can you cover the printing costs? The discount to a retailer is usually 40%, meaning you get 60% of the list price. Thus, to figure out what the list price needs to be to cover your printing costs, divide the printing costs by 60% (0.60). For a book that costs $11.88 to print, the list price would need to be $19.80 to break even on the printing.

If the list price needed to cover the printing costs from step 4 is greater than what you can sell the book for STOP. You cannot produce the book at a profit. I know most people are thinking “Just charge $22.00 for the book.” Over-pricing a book for a given market (charging more than similar books) is a common mistake, and will result in very few sales.

If the above analysis shows you can cover the printing costs, the next step is to determine if you can cover your fixed costs (editing, illustrations, and cover art). I’ll cover computing these costs in my next blog.

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How Long Will it Take…

When we were designing our new website, I visited several publishers’ sites for ideas on what to include. One site stood out not because of the design but because of the number of books the company had published. In its first two years in business they had published fifty books – a book every two weeks.

I often get asked by authors how long it will take their books to come to market, and my answer is always the same; there is a reason it takes larger publishers as long as eighteen months to bring a book to market. The steps to turning out a quality product include:

Editing. This is probably the longest step in the publishing process. On average, one of our manuscripts goes through four rounds of edits before the author and editor agree on the final version used for interior design. We had one book go through ten rounds of edits. This process can take anywhere from six to nine months depending on how extensive the required edits are.

Interior design. I often refer to this as typesetting when talking with authors (showing my age). In reality this is done with a desktop publishing program. The process includes adjusting lines of text in the final manuscript to eliminate widows and orphans and to minimize the excessive whitespace in lines of text which can occur when text is justified. This means examining every line of text in the manuscript, and to do this correctly is very labor intensive.

Cover design. Author A.J. Capper wrote a blog discussing the process of designing the cover for A Bother of Bodies. It often takes several designs before finding a final cover that both we and the author agree on, and each design takes time to produce. I believe our record is that we designed nine covers for one book before we found one everyone agreed on.

To bring a quality book to market is a long process with many steps requiring feedback from authors. While it is certainly possible for a small press to produce fifty books in two years while also turning out a quality product, it would require a large number of books in the queue and working on several books at once. More likely, editing was minimal, desktop publishing was limited to converting a Word document to a PDF file, and cover design was finding a single image on a stock photo site with no additional design considerations. Authors should always ask publishers who turn out large numbers of books in a short time about their process, because the quality of your published book could depend on the answer.

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Do What’s Best…

It’s all right if you see other publishers. In fact, I encourage it.

That comment is in response to a question recently asked by an author we have under contract. The question was whether it was considered proper etiquette to submit his new book to us for consideration before submitting it to other publishers and agents. My advice is very simple:

Do what’s best for your book.

There are many reasons authors consider different publishers for their manuscripts. One common reason is that an author may publish with a small press, like Divertir Publishing, and then find an agent for a subsequent work. The agent will also want to do what’s best for the new book, which might be to shop it to larger publishers. Another reason is that the publisher for one of your books may not handle the genre for you new manuscript. We don’t publish erotica or books with what we consider to be excessive sex or violence, and we don’t publish memoirs unless they contain a social message. Does that mean books that contain sex and violence or memoirs without a social message won’t be fantastic books? Certainly not. What it does mean is we aren’t the right publisher for these works because of our tastes.

Many famous authors published with multiple publishers, including Dr. Seuss (his first book, And to Think That I Saw It on Mulberry Street, was published by Vanguard Press, while The Cat in the Hat was a joint venture between Houghton Mifflin and Random House). Suzanne Van Rooyen (whose first novel Divertir published) had her next two books published by two different publishers. To be honest this does not hurt us in any way and might help – the fact there are more publishers displaying her works makes it more likely that readers will discover her writing (which could only help sales of her first book). If Suzanne were to land a deal with Random House tomorrow I would be a very happy person, because we were the ones to discover her (we were looking for short stories for one of our collections and came across one of her stories, which it turns out she had turned into a novel). Call it bragging rights.

I would say there is one exception to the above. If you send a publisher or agent a manuscript, the agent or publisher may take the time to send a detailed critique with suggested improvements. If you use some of the suggested changes from the critique to revise your manuscript, then I do think as a courtesy you should send the revised manuscript to the agent or publisher again for review. After all, they have taken the time to provide feedback, which demonstrates a level of interest. Including in your query letter that you took their comments to heart in your revisions is probably the best way to get the book reviewed a second time. If the agent or publisher does not review the manuscript or offer a contract, then I would ask the person who provided the critique if you can use the ideas from the critique in your work as you query other agents and publishers (asking as part of your query letter is probably the simplest way and shows you are a professional who takes the intellectual property of others seriously).

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Looking Ahead…

In my last blog, I mentioned that I would be using this blog to talk about some of the things we’ve accomplished in the past five years. As I thought about it, I realized these are all things I’ve mentioned in the past (like being selected for the article “Keys to Cracking 10 Top Markets” by Adria Haley which appeared in the September 2011 issue of Writer’s Digest and Tears for the Mountain briefly reaching #1 in the Social Policy category on Amazon). Thus, I want to use this blog to discuss where we are going over the next year.

  • Our web presence: Last night some of you might have noticed that our website was down for about half an hour. The reason is that we’ve rolled out a completely new website (http://www.divertirpublishing.com). In the coming months we will be adding several sections to the website after I get some input from our current authors as to what they would like to see (for example, should there be a separate “Our Authors” page or should the author info be included on the product pages, and should we offer to provide each of our authors with their own page which we would host). Another goal over the next six months is to make the website more interactive so that readers will be more likely to stay and browse.
  • Social Media: I have a confession – I don’t log into Facebook every day, and I’m not much into social media. The good news is that our Acquisitions Editor, Jen, is really into it and was the driving force behind the Facebook giveaways we’ve been doing this year. Jen and I are currently talking about other things we can do using social media to help our authors to promote their books and will be putting together a plan before the holidays so we can take advantage of that sales period.
  • Book Promotion: While social media is one way to promote books and help readers discover new authors, it’s not the only way. Over the past few months Jen and I have been trying different things (like the giveaways and adjusting the prices for some of our eBooks) to see what works and what doesn’t. While this is still a work in progress, I think the data we’ve been collecting will better enable us to help our authors with one of the most difficult aspects of publishing – book promotion.
  • Divertir Magazine: We’ve been talking about doing this for a while and feel the time is right. The magazine will be free and will feature short stories, poetry, and articles by our staff (including author interviews). We feel this will help bring Divertir Publishing and the books we offer to the attention of more readers and are pretty excited to get started. This also means we will be opening up queries for short stories in most genres in the coming months (no more waiting for an anthology with a specific genre to submit). We will continue to also do our short story collections, and will be choosing stories from the magazine to provide that content.

I expect the next year to be a pretty exciting time at Divertir Publishing, and look forward to working with all of you.

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A Time to Celebrate…

No, I did not hit the Powerball – but the thing I am celebrating is just as good. On September 17th of this year, Divertir Publishing will have been in business for five years.

When I started the company in 2009, I knew there was a chance I would not be writing this blog. That year, based on the number of requests for ISBN blocks from new companies, Bowker estimated that approximately 80,000 new publishers went into business. That same year a statistic came out that 95% of new publishers fail in the first two years, while 98% were no longer publishing books after five years. So I’m personally quite proud to be able to say that, at our five year anniversary, we have seventeen books in print and another fourteen under contract.

In my next few blog I will cover some of the things I feel we have accomplished, some things that still need to be done, and what we have planned for the coming year (such as the fact that our new website will debut within the next two weeks). In this blog I think it’s important to take time to thank some people who made this anniversary possible.

Beth Harvey was out first Acquisitions Editor, in addition to being the editor for two of our short story collections and several of our full-length manuscripts. Beth and I met at the karaoke show of a mutual friend – yes, I meet writers at the strangest places. Beth has moved on to start Insomnia Publishing, and I wish her all the best with this new endeavor.

I met Lisa Keele on Deviant Art – she ran the Daily Lit Deviation group. Lisa started as an editor with us, editing one of our first short story collections and several of our novels. She then served for a brief period as our Senior Editor. Lisa has moved on to other pursuits not directly involved with writing, and again I wish her the best.

Elisa Nuckle and Mel Ngai both worked as editors for us in our early years. Elisa has returned to school to finish her degree, while Mel is now working with Beth at Insomnia Publishing.

Jen Corkill-Hunt has been our Acquisitions Editor since the beginning of the year. Jen started as a reviewer for us, moved into editing after taking the Kobayashi Maru of all editing tests (which I have since stopped using because of the ban on cruel and unusual punishment), and now runs the editing side of Divertir Publishing. I consider Jen to be both my “partner-in-crime” and a close friend, and she is responsible for several of the new ideas we’ve implemented this year.

Jayde Gilmore started with us as a reviewer, while Laura Jamison started as an intern. Both now review and edit manuscripts for us. In addition, Laura is responsible for designing the incredible cover for Repeat Offenders by Bill Bonvie and is the girl on the cover of Guardian’s Nightmare. Without the dedication both have shown to Divertir Publishing our backlog would be a lot larger than it is.

The people responsible for wading through the queries to identify books that might be of interest to us are our reviewers, and without them we would have much less time to actually publish manuscripts. Our current reviewers are Michael Gilmore, Sam Tower, Ben Lyles, Lylah Caldwell, and Marie Wagner. In addition Sarah Welsh, one of our authors, reviews romance novels for us.

Finally, and most importantly, I would like to thank our authors. Each of them put there trust in a small startup publishing company, and without their trust, hard work, and continued input on how to improve things at Divertir Publishing we would not be where we are today – celebrating our fifth anniversary.

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