My buddy Laura Laing is kindly allowing me to run this excerpt from her book for writers: Math for Writers: Tell a Better Story, Get Published, Make More Money.
I’ve known Laura for years as a colleague, and I had the opportunity to work with her on her first math book (Math for Grownups), which is how I learned to stop hating math. Laura is a fabulous teacher and she’s the reason why I didn’t quail when I had to factor some quadratic equations for a project I’m working on (I kid you not. You have no idea the weird and random projects that land on my desk.) I knew I could do it because she taught me to have more confidence, and to recognize that there are usually many ways to solve a problem.
Anyway, I’m pleased to offer this excerpt, which will help you figure out how to calculate the numbers involved in self-publishing.
The Math of Self-Publishing
Michelle is thinking about self-publishing her next book. Her first baby—Stand Up! My Comedic Journey—was well received, but working with a traditional publisher was a bit disappointing. Besides, her current publisher didn’t go for her next idea, Writing Jokes that Sell. It’s a departure from the memoir she wrote last time, and the market is pretty targeted. A well-placed self-published book might be just the right thing.
But how much is this venture going to cost? And how much can Michelle expect to earn from her book? She gets to work on some research.
For this bit of analysis, a spreadsheet works great. Michelle can plug in the numbers she comes up with, along with a nifty formula or two, and boom she’s got her answer. If she needs to adjust some of the costs, the final will adjust automatically.
First, she considers her upfront—or development—costs. She has to pay an editor, a cover designer, and a proofreader to make sure her book is in perfect shape. The editor charges $1,200, the cover designer $1,100, and the proofreader $700.
Whether she chooses print or e-book or both, she’s already in $3,000 on this venture. Now to find out the costs of publication itself.
Michelle has decided to use an aggregator—a company that will format her text for a variety of different e-readers, as well as print on demand. The aggregator will also distribute her book to online stores and make it available to brick-and-mortar shops.
The cool thing about publishing a book this way is that she won’t pay a dime upfront. Instead, the aggregator and the online bookseller will take a cut of each book sold.
At this point Michelle needs to project her revenue, based on one aggregator’s royalties. That information will help her finalize the prices for her book—both e-book and print options. To start with, she needs to choose a price for each and see what happens. Michelle does some research and decides on $12 for the paperback version and $4.99 for the e-book.
The online calculator on her aggregator’s website spits out the following information, which represents cost per book, not royalty:
$2.65 per book
$132.50 for 50 books
$23.00 for standard shipping
In terms of print copies, Michelle is really pulling together a great plan. She can purchase multiple copies to sell in person, and she can have print copies available to buyers who would rather purchase books online—or for booksellers who want to have her book in their brick-and-mortar stores. (This isn’t likely without a lot of marketing on her part, but it is available.)
Now for the e-book version. If Michelle prices her e-book at $4.99, she’ll earn $3.24 per book sold on Amazon.com. The aggregator offers an 83% royalty, which nets Michelle $4.14 per book. Michelle knows that Amazon has about 50% of the e-book market, which leaves 50% for the aggregator’s and other websites. So it makes sense to average these 2 values to get the net revenue per e-book.
(3.24 + 4.14) ÷ 2
7.38 ÷ 2
In other words, Michelle can expect to earn an average $3.69 per e-book sold. This isn’t exact, but it’s good enough for estimating how much revenue Michelle can expect.
Michelle’s not done, though. She wants to know the actual cost of publishing her book, if she sells 1,000 copies. First, she figures out her “net per book,” which comes from the calculations she made above—the royalty she earns on each book sold, according to where and how it was sold. To find “gross sales per 1,000” or the amount she’d gross if she sells 1,000 books, she multiplies the net per book by 1,000. Finally, the “net per 1,000” is the “gross per 1,000” minus Michelle’s development costs. If she sells 1,000 copies at $3.69 per copy, she will net $3,690. Her book development costs were $3,000, so her “net per 1,000” is $690. However, any additional book sales are pure gravy, since she has already recouped her development costs.
This calculation helps Michelle see how many books she will need to sell, and at what price, in order to make a reasonable profit on her work.
These numbers don’t tell her the whole story, but at the very least, Michelle now has a great starting point. She can fiddle with the numbers a bit and see what the formulas spit out. She’s on her way to a great plan for getting her book out to readers.
Laura Laing is a freelance writer and the author of Math for Writers: Tell a Better Story, Get Published, Make More Money. Visit her website to check out her full virtual book tour roster and sign up for a free, live teleseminar just for writers who need math.