6 months to earn back cost or it's a failure?

CaoPaux knows her onions.

A related point however, most books get a month or two to sell (in the bricks & mortar stores at least) before they get returned.

I agree with dgaughran.

I think, traditionally (with print books), a book had to start selling immediately, otherwise it would get returned after a month or so. And if it's not in the bookstore, it can't sell.

Also, 'bestseller' lists would include the first book in your example but not your second, even though it ultimately sold more books.

Now, with ebooks, things like limited shelf space and returns are not such a factor. A book has time to build buzz through word-of-mouth, something that was not necessarily possible before.

I know in years past, people would tell me about a book that sounded interesting but I could no longer find it in the bookstore because it had already been returned (so the store would have room to stock newer books). That's how I became a devotee of used bookstores (and now the internet).

Just like their authors, traditional publishers hope their books start to sell immediately (that's why they promote and market and ask the authors to bring as much attention to the book as possible), that the book will earn out as quickly as possible, that they calculate enough of a demand that calls subsequebt print runs (as many as possible since in most every case they will only reprint when convinced doing so will realize a profit). They also want foreign and any other possible forms of sale. With some very rare exceptions, books stay in print for as long as they make money for the publisher. One of my books, the first one I wrote, a children's nonfiction book, is a pretty good example of all this. It went into print in 1969 and stayed in print until 2003. This publishers minimum print for my book was 10,000 copies, although they usually printed more. If and when they felt they couldn't sell at least 10,000 new copies in a given year they would cease printing. That was their decision in 2003. Between 1969 and 2003 they added a paperback version, sold hardcover and/or the paperback in over 30 foreign languages, and published a slide program, filmstrip, teacher's guide, and student review pamphlet that they asked me to create. So, as you can see, a traditional publisher will stay with a book for as long as the book makes money. After all, isn't that why traditional publishing companies exist, for the most part?

No, it isn't true, and , right now, I'd take anything she says about indie publishing with a very large block of salt. For 99.9% of new writers, self-publishing is guaranteed failure, and may even prevent ever being successful at any type of publishing. The numbers simply are not there.

For about one tenth of one percent of writers, however, self-publishing is the profitable choice.

Jamesaritchie said:

For 99.9% of new writers, self-publishing is guaranteed failure, and may even prevent ever being successful at any type of publishing. The numbers simply are not there.

For about one tenth of one percent of writers, however, self-publishing is the profitable choice.

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You could say the exact same thing about traditional publishing, considering less than 1% of writers ever get a publishing contract, and I'd bet less than 10% of those ever go on to make any kind of decent living at it (either because they don't try to build a backlist or because their books just aren't popular).

cameron_chapman said:

You could say the exact same thing about traditional publishing, considering less than 1% of writers ever get a publishing contract, and I'd bet less than 10% of those ever go on to make any kind of decent living at it (either because they don't try to build a backlist or because their books just aren't popular).

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Speaking about what I see, not what I've personally experienced, the concept of making meaningful money today as a writer is more remote than ever before. I believe there are many reasons for this, including that today more people think they can write and earn a living from same than ever before, the basic need for an agent if one is pursuing traditional publishing (not the 15% but being able to get an agent to rep you), and todays dramatic emphasis of self-publishing, which far too many writers believe is their way in and which some (not me) believe will eliminate the need for print books and thereby traditional publishing houses. I think it more than possible that self-publishing is here to stay (more so than it's ever been), but I don't think (my guess) that it will count for more than 10%-15% of all book sales (and that's quite a bit) in time. As I've said before, if self-publishing becomes truly meaningful you can bet that one way or another todays traditionl houses will jump all over it. They have the means and ability to do so whenever they wish. Whatever, in time I believe writers will realize that very, very few can get published(not talking about vanity) and make money from self-publishing and/or e-book publishing, except for the few (some of whom I believe are members here) who know that end of the business inside out and accordingly know what they are doing.

It's an interesting article, but it sounds to me like it's not the different publishing models that are the key "traditonal" versus self-published, but rather the different distribution models. Lots of small presses are using similar distribution methods as self-publishers, that is, ebooks and print on demand, exlusively online sales not bricks and mortar book stores.

So it's not "traditonal publishers" where you have to get the sales in six months or it's a failure, it's publishers using traditional distribution.

cameron_chapman said:

You could say the exact same thing about traditional publishing, considering less than 1% of writers ever get a publishing contract, and I'd bet less than 10% of those ever go on to make any kind of decent living at it (either because they don't try to build a backlist or because their books just aren't popular).

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Yep, but the failure state of self-publishing is "author loses money", whereas the failure state of trad publishing is "publisher loses money, author retains their advance."

Advances against royalties are often pretty close to what the book would be assumed to earn for the author in royalties were the book to sell just well enough to be deemed a success.

I've never heard that six month thing quoted. While you will sell the majority of your print titles in the first six months (really the first three months), the digital wave is making the 'long tail' of the backlist even longer.

Irysangel said:

I've never heard that six month thing quoted. While you will sell the majority of your print titles in the first six months (really the first three months), the digital wave is making the 'long tail' of the backlist even longer.

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Further to this, my agent actually mentioned that publishers were seeing authors in my genre build up readership OVER six months, which suggests to me that a lot of the publishers know this and expect it so aren't planning to cut off authors who take a slightly "slower build" to start with. Now, that's not to say that there won't be exceptions to this, of course.

How long does one generally have to "earn out" their royalties? I'd think that if you take 50 years with a $15,000 advance, even a book that sold poorly would make it in that time frame. Obviously, though, we consider it not reaching its goal long before then.

Kasey Mackenzie said:

Further to this, my agent actually mentioned that publishers were seeing authors in my genre build up readership OVER six months, which suggests to me that a lot of the publishers know this and expect it so aren't planning to cut off authors who take a slightly "slower build" to start with. Now, that's not to say that there won't be exceptions to this, of course.

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If you are referring to traditional publishing houses and the books they print, I find this hard to believe. Maybe if the author is a household name or a celebrity--the primary reason they print the later being for exposure of their corporate name--but certainly not for the average or debut author. Traditional publishing companies are in business to make money.

If you are referring to e-books and/or self-publishing I have no idea.

Nick Blaze said:

How long does one generally have to "earn out" their royalties? I'd think that if you take 50 years with a $15,000 advance, even a book that sold poorly would make it in that time frame. Obviously, though, we consider it not reaching its goal long before then.

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Traditional publishing houses very carefully gauge how much of an advance to offer verus royalties they expect will be earned and profit they will make from the first (sometimes the first and second) print runs. They are not likely to "carry" a book in the warehouse or on film for more than two years.

Of course when it comes to household named authors and/or celebrities the rules change.

Guys, I think the rules are in the process of changing. And much as I love reading Kris's essays on the subject, I think she's missing the speed of the change.

Digital books mean no end to the shelf. Therefore, when digital books are the dominant book format (February, 2011), the six month thing makes no sense, because every book - whether self or corporate published - is available forever as soon as it goes up.

So the idea that a corporate published book has only six months - or even only a year - to make sales is a specious argument. A corporate published book has as long a tail as a self published book, now.

The article referred to by the OP is yet another in the "shock horror publishing is changing lets all run around squealing and come to ridiculous conclusions" series. There are lots of these articles on the internet, and while they often attract plenty of attention, they do no favours at all for the writers who read and believe them.

The advance is usually what the publisher thinks the book will earn in the first two to three years.

juniper said:

I've read some links posted around AW, read other places, and still my brain cannot comprehend how publishing *does* make money on an average book. Because after the book sells enough to make back the advance, what about the money spent on editing, copyediting, printing, marketing etc? How much of a $7.99 price on a paperback is publisher overhead?

In another thread Old Hack said something about 70% of commercially published books not making a profit. I guess some of the 30% makes enough to cover the losses from the others? And a small % makes enough to keep $$$ in the publishers' coffers so they can push onward?

I guess I need a "See Dick Run. Run, Dick, run" adaptation of publishing.

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I have a book - it's a children's picture book, which is what I do, and we're in the UK, so it's a smaller market than you have in the USA - but I have this book that I would like to acquire for my publishing company.

I show the book to Sales. They think in the year of release they can sell out a print run of about 10,000 copies in the UK trade, which means Waterstones, WH Smiths, Amazon, and various other outlets such as supermarkets.

All these retailers will be purchasing copies of the book from me to sell on to the public. They'll get them at a discount from the recommended retail price. I'll recommend a retail price of £5.99; for simplicity's sake, let's say the retailers buy copies at £2.50 a copy.

That means I expect to earn £25,000 selling the books.

Now let's see how much I need to spend to make the books. Let's say each book costs me about 75p to make and ship to my warehouse. Two important levers here: the longer and fancier the book, the more it will cost; and the more I print, the cheaper it gets. In this instance, I'm going to spend £7,500 on printing books.

Then I probably need to pay the author/illustrator some money. I'm paying, as standard, 10% of price paid as a royalty on my paperbacks. Customers paid £5.99 for each book we sold on, so the author gets ~60p per copy. On 10,000 copies, that's £6,000.

I'm going to pay the author/illustrator an advance against her royalties: this is us taking on some risk. I'll pay £7,500, and she doesn't get a penny more until the book has 'earned out' - that is, until she's sold 12,500 books, which at 60p per copy makes up for the advance. (This is a bit more than the initial print run: we'll need a reprint to get the book to wash its face.)

So I've paid out £15,000 on printing the books and paying the author/illustrator. I expect to earn £25,000 selling them, so this looks like a decent profit: 40%

However, then I have to factor in returns. A bunch of the books I print will never be sold: they'll languish on the shelves, get sent back to the warehouse and pulped. Let's say 15% of them will meet this sorry fate.

Then I need to put a few bob in the budget for marketing. Let's say £1000. Then possibly some freelance costs or permission fees. Let's round the whole lot up to £1,250. My revenues are down to £20,000 and my profit margin to 25%.

Lastly, let's take off our overheads. At this point I am happy if I can keep my profit margin on the healthy side of 15%.

A lot of these numbers are made up, but you can imagine the spreadsheet: that's how you run the profit and loss. A lot of books don't measure up to the projection; a few do exceptionally well, and a few do exceptionally badly (you try to weed those out before you commit yourself to printing them - cancel the book if it's not looking good, and swallow the loss of the advance only.) Across your whole list, you would like your profit margin to be in double figures.

juniper said:

In another thread Old Hack said something about 70% of commercially published books not making a profit. I guess some of the 30% makes enough to cover the losses from the others? And a small % makes enough to keep $$$ in the publishers' coffers so they can push onward?

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The 70% was not "making a profit" it was "earning out the advance". Sometimes people think these are the same thing but often they are not. It's true the advance is based on how much they think the book will earn in a given amount of time but the point at which the publisher starts to make money may be before the advance is earned out.

juniper said:

I've read some links posted around AW, read other places, and still my brain cannot comprehend how publishing *does* make money on an average book. Because after the book sells enough to make back the advance, what about the money spent on editing, copyediting, printing, marketing etc? How much of a $7.99 price on a paperback is publisher overhead?

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Those costs are part of the book's production cost and they're almos always earned back by the publisher before the book earns out for the author.

In another thread Old Hack said something about 70% of commercially published books not making a profit.

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No I didn't! I said that about 70% of books from trade publishers fail to earn out for their authors (that means, they fail to earn enough royalties to cover the advance paid); but that's a lot different to making a profit for the publishers. The publishers are usually in profit way before a book earns out for its author.

I guess I need a "See Dick Run. Run, Dick, run" adaptation of publishing.

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That's what I try to do at my blog--see my signature.

rsullivan9597 said:

The 70% was not "making a profit" it was "earning out the advance". Sometimes people think these are the same thing but often they are not. It's true the advance is based on how much they think the book will earn in a given amount of time but the point at which the publisher starts to make money may be before the advance is earned out.

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Thanks for that, Robin. To reiterate, the advance is calculated on how many copies a book will sell over a few years; but most books turn a profit for their publishers before that point.

The advance is hardly the largest part of the expense of producing a book. (And it is true that sometimes, given the number of books printed, it's mathematically impossible for the book to earn out even if every copy sells.)

All that it means if a book doesn't earn out is that the author was paid a slightly higher than contracted for royalty rate.