Sunday, March 9, 2014

The Cost of Getting Self Published Books in Stores

This week I want to talk about how indie authors can get their books in stores. It's something that I have been interested in, but haven't taken the time to research. I'm going to list all the options, and attempt to figure out which one would be the most cost effective for self published authors. 

For the examples below I'm going to assume a cost of $4.50 per 300 page book through Createspace to print on demand. If you are buying in bulk through a wholesaler, you may be able to get a better deal. I am also going to assume the same royalty per book as the ebook version with a $2.99 price on Amazon. That would be a $2.09 per book royalty at 70% for the ebook version. I'm going to include my equations, so you can adjust them to your liking if you wish to use different values. Let's take a look at our options.

1.) Contact bookstores individually

There are thousands of bookstores across the country, so this could take forever and a day depending on how many bookstores you want to try.  I did find a magic link though.

http://www.barnesandnobleinc.com/for_authors/how_to_work_with_bn/how_to_work_with_bn.html - This is a step by step guide on how to get your book into Barnes & Noble.

When you contact a bookshore they may reject your book for various reasons. Nearly all bookstores require that the books are returnable. Createspace doesn't offer that, but if you buy your own author copies you can send them in yourself. You can also find another press that does accept returns if needed. If your books don't sell, you have to pay for return shipping or pick them up yourself.  Shipping costs could get expensive. I'm going to assume that the stores hold onto the books until they sell out, but many of them have a 60 or 90 day policy. Most of the stores only deal with local indie authors directly. Most of them take the books on consignment, but there are a few that will pay for them up front if you meet their requirements.

I wasn't able to find solid numbers on the split between the author and the bookstore, but one bookstore advertised a 60/40 split (60% for the bookstore, 40% for the author). I'm going to calculate my numbers based on those numbers, but also include numbers for 50/50 and 40/60. Please be aware those percentages may differ quite a bit from store to store. Most of the stores take either 5 or 10 books at a time. So let's figure out how much the cover price would have to be to reach the goal of getting that $2.09 per book royalty. Here's the equation for a 60/40 split with x being the cover price: $2.09 + $4.50 = x * 0.4

x = $16.48 Let's make it a $16.49 just to match pricing standards. That's almost twice what most paperback books would cost if you're doing a 60/40 split. Let's look at the numbers for the other two splits.

For 50/50, x = $13.18
For 40/60, x = $10.98

Now let's calculate profit for the 5 or 10 books they take on, assuming they sell them all. For 10 books it would be $20.90 in profit, and 5 books it would be $10.45. The gross take would include the $4.50 in cost per book (for 10 books $65.90).  That is based off the $2.09 profit point which is the same for each example outlined above. Doesn't seem like it's worth the effort if you price yourself out of the market. That also isn't including shipping costs if those stores are out of town.

2.) Indiereader In-store

Another author I follow on twitter sent out this link: http://indiereader.com/2014/01/iris-first-indie-author-indie-bookstore-distribution-service/

This is a distribution service that gets your book listed in a directory that many bookstores and major retailers use to catalogue books they may order. They also have their own wholesale printer that they offer to set you up with. This listing does not guarantee that a store will carry your book. The website claims that they will act as your publisher and distributor.  The catalogue requires that a review copy is available, a professional review of the book, and a rating on Goodreads. You can get this service for the low low price of $399.  Additional services like getting them to contact bookstores on your behalf can be purchased for extra although they do provide bookstores with what amounts to an order sheet. This certainly cuts down a bit on the work you need to do, but is it worth it or what would make it worth it?  Let's crunch the numbers.

According to their own website a book of 208 pages at $12.95 retail price would get the author a royalty of $2.23, for 280 pages $1.29 royalty, and 480 pages -$1.31 (yes that's a loss). So let's figure out how much it would be for a 300 page book, so we can compare it to the prior examples. The royalty is determined by calculating the wholesale cost minus the print cost. The wholesale cost in their examples is $5.83. The print cost is slightly lower the more pages you print. I am going to use a slightly lower per page cost than the 280 page example. The per page cost I am using is $0.0162. Multiplied by 300 gives us a print cost of $4.86 (this number may be off by a few cents). This gives us a royalty of $0.97.

For the sake of comparison, let's figure out what the cover price would be to reach the $2.09 royalty point in the previous example. This would be obtained by increasing the wholesale price by $1.12. The new wholesale price would then be $6.95. According to their FAQ the wholesale price is the retail price times 45%. If you divide the wholesale price by the same percentage you should get the retail price. So $6.95 divided by 45% gives us $15.44 as the retail price.

To get back to even with this program you would have to sell 191 books at $15.44 or 411 books at $12.95.  If you are a popular author who sells that many off of Createspace per month then this may be worth it if you refuse to deal with a traditional publisher. At first glance this seems like it's a ripoff where they are trying to play at being a traditional publisher while charging the indie authors for the privilege. However it doesn't appear as if they are taking a percentage of the profits, but instead are charging an up front fee for their service.

Conclusion

These examples still have the retail price higher than most paperbacks which sell mainly in the $8-$10 range in the bookstores I have shopped at for years. Many of those books have 500+ pages. Perhaps the $2.09 royalty is a bit unrealistic for indie authors who wish to sell in print at this time. Even if we reduce the amount of royalty self published authors receive, it doesn't appear as if they can quite get the price of their books down to $10 in stores. A standard deal with bookstores gives a 55/45%. To get down to the $10 price point authors would get $0 in royalties using a print on demand service. To get to the $8 price point, authors would lose $0.90 per book sold. Self published authors simply can't compete with similar novels in stores when it comes to price unless they are able to lower the cost of printing. It's not a viable enterprise if you have to use a print on demand service unless you are able to make sales at a higher retail price point.

Also keep in mind that these numbers are for a 300 page paperback novel. The longer the book is, the higher the cost gets. That makes it that much harder to make a profit. If you write a 1200 page epic fantasy novel, then it makes more sense as an indie author to break it up into 4 parts with each selling for around $11 in stores. That means you're charging $44 to have a copy of your story on paper when you might have the ebook on sale for $4.99. You would also have to sell 4 books to get the same royalty you would get from selling 1 ebook.  Again it makes sense if you are able to sell books at a higher retail price point

A few comments about the Indiereader In-Store are trashing it as being a ripoff while the people who are running this are trying to defend it. For those who don't have the fanbase to support large sales numbers, this does indeed look like a blatant ripoff. However, for those who do, this may become a serious option. There are still issues with the program that need to be figured out. There is also a question as to how successful this program will be in getting books into major retailers like Barnes & Noble. That is the biggest question about the program at this point. The only way it becomes viable is by succeeding in getting indie authors into major retailers. Unfortunately they don't have any kind of business deal in place with retailers, so there is no guarantee. Also they won't do any kind of follow up to help further this unless you pay them more. There is too much risk to assume at this point for a self published author. This program has to prove itself before it can be considered a viable option.

Thank you all for reading this post. If you know of another way to get your books into retail stores then please contact me by facebook, twitter, comment, etc.. 

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