Category Archives: Publishing

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People who visit our website know that we do not publish children’s books, yet every now and then we get one submitted.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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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 publish 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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Technology…

I thought I would start this blog by sharing some information about the technology that was available when Pebbles, Bam-Bam and I went to school:

  • My first computer in high school was a Commodore Pet 2000 with the spaceman screen and Mickey Mouse keyboard (at least that’s what we called them). It had 8 Kbytes of memory, expandable to 16 Kbytes (yes, those are “Kbytes” – it’s not a typo). It used a cassette tape to load programs and came with a word processor – which was pretty useless because it had no printer.
  • My first “word processor” was a Sears electric typewriter that could do bold and italics and stored up to 5 pages of text in memory. Given that most of the papers I had to write in college were 5 pages and under, I was in heaven – so long as I didn’t need to work on two papers at the same time. I still have that typewriter, but if my life ever depended on getting a ribbon for it I would probably be toast.
  • The computations for my PhD thesis were run on a Cray supercomputer, and the software and results are currently stored on reel-to-reel tapes. It would take less time to rewrite all of the software from scratch and rerun all of the computations than it would to find a reel-to-reel tape reader, and my current laptop computer probably has more computing power than the supercomputer did.
  • My first mobile phone was the size of a small purse and could do nothing but make phone calls.

Of all the information I will share today, probably the most interesting fact is that I am under the age of 50. That’s right – in just over 30 years, or about one generation, we went from talking about personal computers with Kbytes of memory that could perform simple tasks to machines with gigabytes of memory that can run very complex computations. We went from mobile devices that could make phone calls to smart phones and tablets with touch screens that can surf the internet, providing instant access to information.

So what does this have to do with publishing?

A recent study suggested that over 70 percent of people under the age of 25 receive a majority of their information on mobile devices. As technology improves this trend is not likely to be reversed. Barnes and Noble recently announced they would be closing two hundred stores over the next ten years, and I suspect this reduction in stores will be accompanied by a significant increase in their web presence and the development of new mobile applications. Publishers who accept the trend by making their books available in electronic formats readable on mobile devices and by providing information about their books in an easy to find manner on the web will likely reap the rewards of these technological advances. Publishers who cling to old paradigms about how publishing works may find themselves looking for ribbons for their typewriters…

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