Monthly Archives: May 2011

On Royalties…

The biggest argument for self-publishing made on the many blogs dedicated to the topic is that an author gets to keep all of the money. I have to admit this one point is hard to argue – other than to say that, as I point out in my last blog, you also get to do all of the work. The other point is that publisher’s royalties are somehow out of touch with the reality of a modern age.

This one point I would like to argue, with an example.

Divertir Publishing currently pays the following royalty rates to authors:

  • 12.5% of net for the first 2,500 paperback copies.
  • 15% for the next 2,500 paperback copies.
  • 17.5% for every copy after the first 5,000 paperback copies.
  • For e-books we pay 50% of net.

So how does an author fare with these rates? Let’s take our upcoming book “Hurricane” as an example. We are planning on pricing the book at $9.99 to keep it in line with other books in the genre. Assume the following:

  • We are giving a 40% discount to retailers, so our net sales per book are $5.99 for print copies.
  • Our fixed costs (press fees and ISBN) are $142 per book, and we pay 15% of net (or about $0.90 per book sold) for editing and cover art (we pay editors a percent of net sales just like authors). Our printing costs are $3.50 per book.

Let’s look at what % of the gross margin (net sales minus cost of goods sold) an author receives if we sell the average number of books (500) or if the book is a success (meaning we sell 5,000 copies)

Books Sold 500 5,000
Net Sales (60% of list) $2,997 $29,970
Cost of Goods Sold (not including authors royalty) $2,342 $22,142
Margin (Net – Costs) $655 $7,828
Author Royalty $374 $4,104
Royalty – % of Margin 57% 52%


Our royalty rates are set of so that an author will receive about 50% of the margin for each book. For e-books, we give 50% of net. We feel this is fair. What are we doing for our 50%? We provide the editing, typesetting, cover art, fulfillment, and marketing (more on this in a future blog).

The usual argument against self-publishing (or going with a new small press like Divertir) is that you’ll end up with low sales. But as discussed previously, going with a major publisher is no guarantee your book will be successful or that it will sell more than 500 copies. The usual argument for self publishing is that you keep all them money. While this is true, you also get to do all the work. The choice is yours. Caveat Emptor.


Filed under For Authors, Publishing

Do you really need a publisher?

My last blog talked about book sales with respect to Joe Konrath’s assertion that authors no longer need publishers and that most authors would be better off self-publishing. So the question of the day is “Do you really need a publisher?” The short answer is “no”. The more complete answer is “it depends”.

I’m glad I was able to clear that up for you.

I won’t make the usual arguments against self-publishing. I won’t comment on the relative quality of books published by “legacy publishers” versus books that are self-published. One needs look no further than Snooki’s recent book or the fact that Tinkerbell Hilton has a book (yes, Tinkerbell is the dog) to realize that the quality of books from “legacy publishers” can be pretty bad. I won’t comment on how poorly self-published books sell, because in my last blog I pointed out that the average book published by a “traditional publisher” only sells 500 copies. In fact, Joe Konrath and others have shown that a well-written self-published book can do extremely well. Instead, I want to quote Joe Konrath from another one of his blogs:

In order to reach the point where I understood the opportunities that ebooks presented, and was able to capitalize on that opportunity, I’d put in another 10,000 hours learning how the publishing industry worked.

That’s right. As much as I’m sure he would prefer to think of himself as an independent author, Mr. Konrath has become an independent publisher. He has taken the time to learn how publishing currently works, and to his credit has taken that information to come up with a strategy for how he feels publishing should work.

Publishing is a business, and if you self-publish then you should be prepared to treat it like a business – including learning all that you can about the business. So the answer to “Should I self-publish my manuscript” really is “it depends”. If you believe (as I do) that the way things are currently done in the publishing world are a throw back to the days of the typewriter and you have fresh ideas on how things should be done, then by all means you’re better off self-publishing. If you already know a lot about the publishing industry and wish to learn more, then you should take the plunge and self-publish. If you find the thought of one day being an independent publisher exciting, then go for it. There is no better time to get into publishing (unless you’re one of the large publishers), and there are plenty of people out there (including myself) who would be more than happy to assist you in getting started.

And for those of you who don’t one day wish to have the title “independent publisher”, the good news is that there are plenty of independent publishers already out there that would be happy to work with you.

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Filed under For Authors, Publishing

How well does “legacy publishing” really do…

I’m a big fan and regular reader of Joe Konrath’s blog. Recently he wrote a blog about why authors should forgo finding a publisher and should instead self-publish their work. Given the fact that I own a small publishing company, it may surprise you that I agree with Mr. Konrath that some authors are better off self-publishing. That will be the topic of my next blog. In this blog, I want to focus on his assertion that with a “legacy publisher” (as Joe Konrath calls them) you’ll have only a 1 out of 10 chance at “earning out your advance” – meaning that you have about a 10% chance your book will be successful.

We’ve all seen the statistic that on average a self-published book will only sell 100 copies. This number was arrived at by taking the total number of books sold that were published by iUniverse, Authorhouse, and Xlibris and dividing by the total number of titles for each publisher. This is one of the arguments many in the publishing industry use against self-publishing. Unfortunately, the above data gives only half the picture. An interesting comparison would be how does this measure up to sales by “legacy publishers” who sell their titles through “brick-and-mortar” bookstores? Those statistics are also available:

  • A successful fiction book sells 5,000 copies. A successful nonfiction book sells 7,500 copies. (Authors Guild.
  • Bowker reported that in 2004 there were 275,793 new titles published by “traditional” means (this would exclude self-published books).
  • In 2004, of the 1.2 million titles tracked by Nielsen Bookscan, 950,000 titles sold fewer than 99 copies. Another 200,000 sold fewer than 1,000 copies. Only 25,000 sold more than 5,000 copies. The average book in America sells about 500 copies. (Publisher’s Weekly, July 17, 2006)

That’s right. Even if we assume that all of the books which sold over 1,000 copies in 2004 were new titles that were published by “traditional” publishers (as defined by Bowker), this would mean that less than 10% of the books published that year, or less than 1 in 10, were “successful” (meaning they sold over 5,000 copies), and only about 1 in 5 sold above 1,000 copies. The fact that the average book sells only 500 copies means that, quite frankly, the average book published by a “legacy publisher” doesn’t do much better than the average self-published book.

So should you self-publish? More on that in my next blog.


Filed under For Authors, Publishing