Book Marketing Basics
This past Thursday I had the opportunity to be the featured speaker at the Spokane Authors and Self-Publishers' meeting. I spoke about the basics of book marketing. For those who might be interested in what I had to say on the subject, here is my presentation. It's been edited slightly, both to improve its readability and also to direct it to a more general audience.
Yours Truly at a previous SASP speaking opportunity.
Book Marketing Basics
The last time I had the opportunity and honor to speak at a Spokane Authors and Self-Publishers meeting, I offered some observations on marketing. I focused on using e-mail, having a web-site, blogging and being on various social media sites as ways to enhance one’s on-line presence, generate some publicity, and create an awareness of one’s book(s).
Of course there is a lot more to marketing, selling books, than having a computer and being on-line. We seldom talk about the more basic aspects of marketing and selling books; things such as price structure, distribution, cash flow, trade discounts, and more. As self-publishers, we should realize that marketing books can be a different than for those whose books are published traditionally.
To begin, let’s take a look at two average authors and see how they are doing with marketing their books.
First we have the typical, perhaps stereotypical self-published author. This is the individual who especially in the days before Print On Demand would, upon publication of his book, order 500, 1000, 2500, or more copies of his book. (Today, with POD, he can order as few or as many as he needs, as he needs them.) The vast majority of these books now rest in his basement, a spare room, or even his garage. He will have anywhere from a handful to a few dozen in his car… just in case. If you visit local bookstores and other retail shops that sell on consignment, you might find copies of his book available for sale to the public.
He does signings, readings, and makes other author appearances, whenever and wherever he can, usually in the local area, and as time goes by, sells a few copies.
Our second author’s books come to us via traditional or legacy publishing. While he probably doesn’t have a large stockpile of books at home, chances are that his publisher or someone in the supply chain does. His books are not only available locally, but you will find them in stores across the country and maybe even around the world. His author appearances often turn out to be celebrity events. People will wait in line to get in, wait in line to buy copies of his books, and wait in line to have him sign them… providing the event location hasn’t already sold out of stock on hand.
If folks read books by these two authors, they might discover they are of equal readability, and that quite possibly the self-published book is the better of the two. So why does the self-published author track sales individually or by the dozens, while the traditionally published author counts sales by the hundreds, or even thousands of books?
It’s a matter of availability. If our self-published author gets his books into ten local stores and each store sells one copy, he has sold ten books. The traditionally published book could well end up in a thousand stores. If each store only sells one copy, our traditionally published author has still sold a thousand copies. He is able to get his books in all those stores because traditional publishing and the book marketing system work together.
It starts with the publisher. Generally, publishers only publish books they believe will sell well enough for them to recover the costs of publishing and as well turn a profit. In their own interest, publishers typically make some effort to ensure the sales success of books they publish. What’s more, they usually have on board, or can hire or otherwise contract with individuals who can make that happen.
Often, a publisher will put a great deal of effort into books by authors with proven sales records, or books that are predicted to sell well. This practice is often referred to as the “Ninety - Ten” rule. It simply says a publisher will put ninety percent of its marketing effort into books by ten percent of its authors… the top selling ten percent, of course. While it certainly isn’t fair to the typical mid-list or first time writer, it makes perfect sense from a money-making point of view. If it takes a set amount of effort to double the sales of a book, it makes sense to put that effort into a book destined to sell a million copies and cause it to sell two million copies, rather than putting it into a book that might sell a thousand copies, and doubling it to two thousand. Causing the first book to sell another million copies far outweighs the fact the second book did not sell an additional thousand copies. It also might cover up a third book didn’t sell well at all.
The mechanism by which books end up in stores is commonly referred to as distribution. It’s the supply chain, the link from the publisher and printer, via wholesalers and distributors, to the retailer or store. Distribution can seem like a good old boy network or a closed loop system. Those in distribution tend to work only with others in the system. It can be difficult for a completely independent self-published author to get his books into distribution and thus into stores on a nationwide or worldwide basis.
Along with distribution we have something called retail returns. It is simply a guarantee that allows a retailer to return books that don’t sell and not be charged or penalized for doing so. Again, this is something the typical self-published author cannot provide. In many cases, even if a book is in distribution, retailers won’t pick it up if they won’t be able to return it.
All is not lost for our self-published author. Many self-publishing service and assistance companies, those firms we often turn to do the legwork of self-publishing, often have publishing packages and marketing services that offer a chance of distribution and may even provide retail return policies. However, these products and services cost money, and are generally charged to the self-publishing author. Before we cry foul, let’s remember that traditional publishers typically provide these services for books they publish and authors they contract with. They pay for, account for, or otherwise absorb these costs. As a publisher, why should a self-publishing author be any different?
The problem arises when we find that many of self-publishing service and assistance companies charge way more for these products and services than they are worth. Sometimes they tie these services into acquisition of rights that typically should remain with the author.
While some self-publishers avail themselves of these products and services to get their books into distribution, many do not. Some may not be aware these things are available or they decide the cost is too great. Some may find the actual expense to be reasonable but upon looking at the anticipated advantages, decide the outlay is not worth it. Thus, many end up selling books the historical way. They sell directly to the reader. Remember those boxes of books in the basement? How about the satchel of books in the back seat of the self-publisher’s car? Ultimately, these self-publishing authors get their books into local bookstores and other retail outlets on a consignment basis.
Consignment sales are fairly simple. To begin, no money is involved until the book sells at the retail level. Consignment sales involve an agreement between the author and the store in which the retailer takes a small number of books and places them on sale at an agreed upon price, normally the suggested retail or cover price. When a copy sells, the store forwards a predetermined portion of the sale price to the author. In my somewhat limited experience, I have found that the author will receive sixty, sixty-five, or seventy percent of the sale price. If one’s book sells for $20.00, one would receive $12.00, $13.00, or $14.00, depending upon the agreement with that particular retailer. Ideally this is more than the author spent to obtain that copy of the book, and he ends up making a profit.
The books on the store shelves from world famous authors and well known traditional publishers are also sold on consignment. What differs is the way the books got to the store. The author did not directly approach the store owner or manager. The books came into the store via distribution. Rather than a cash payout to the author when a copy is sold, money flows back along the lines of distribution.
If a traditionally published book sells for $20.00, the store might route $16.00 to the distributor they got the book from. In turn the distributor might send $13.00 to the wholesaler, who in turn sends $10.00 to the publisher. Out of that $10.00, the publisher pays the author, let’s say, $1.50 in royalties and keeps the remaining $8.50. For the sake of discussion, we’ll call that $8.50, the publisher’s production cost. It’s what it costs to produce that copy of the book, plus a little towards the overall costs of publishing the book; things such as editing, cover design, interior design, cover, art, and perhaps some publicity and marketing endeavors. The publisher’s production price is pretty much set and is what the publisher expects to receive for every copy that sells.
If we add the production price of $8.50 to the author’s royalty of $1.50, we get the wholesale cost of the book, in this case, $10.00. Those with advanced degrees in mathematics might notice that the wholesale cost is one-half of the suggested retail or cover price of $20.00. This book is being sold on a fifty percent trade discount. Other common trade discounts are twenty-five, forty, and fifty-five percent. Once established, the production cost of a book isn’t going to change, and the production costs of physically similar books from the same publisher will be much the same. If we do not drastically alter the amount of the author’s royalty, the wholesale cost of similar books will be fairly close. When we look at various trade discounts, what really changes is the suggested retail or cover price.
Imagine finding a book from the same publisher, and perhaps even by the same author. While physically similar to the first, it has a cover price of $14.00. A little research reveals this book is selling on a twenty-five percent trade discount. Twenty-five percent off of $14.00 leaves a wholesale cost of $10.50. Perhaps production cost is a bit higher, maybe the author is getting a better deal on royalties, or possibly both are getting a portion of the extra 50 cents.
What is most important to notice is that there is only $3.50 to be shared between the retailer, the distributor, and the wholesaler, while with the first book there was $10.00 for them to share. Brick and mortar bookstores don’t like to deal with books sold on the smaller trade discounts. They would much rather have those with the fifty or even fifty-five percent trade discounts. After all, they are in business to make money. Books with smaller trade discounts are typically sold where there are no middlemen involved, often where the publisher also acts as the retailer, or as often happens in the modern age, by an on-line retailer.
Some of the big box stores such as Wal-Mart or CostCo act as their own distribution network. Often they obtain books being sold on higher trade discounts and then mark them down when they go onto the store’s shelves. They might sell that $20.00 book for $14.00, $15.00, or $16.00. They only have to pay the wholesale cost of $10.00, so they make as much as they would if they sold the book at full cover price and had to split the margin with a wholesaler and a distributor. Their hope is that they will sell more books because of the reduced sale price.
With the self-publishing service and assistance company I’ve worked with, I get a small number of books free as a part of the publishing package. The rest I buy at what they call the author price. It’s what we have been calling the publisher’s production cost. Disregarding the fact that I may have to pay shipping costs, if I sell the book for anything above the wholesale cost of the book, I am earning my royalty for that copy. If I sell if for anything more than wholesale, up to and including the full cover price, I am in fact the retailer, the distributer and the wholesaler. If it’s sold on consignment, the store would be the retailer, while I would in effect be the distributor and the wholesaler. So I earn not only my royalty, but also the portions of the margin normally belonging to the middlemen, and perhaps the retailer.
Also, my books are in distribution through the self-publishing service and assistance company. If one should sell in a store somewhere, money would be routed back to that company just as it would with a traditionally published book. Once they have received the wholesale cost of the book, I am in line to receive my royalty. And in my case, this also applies to books that are sold on Amazon or on Barnes and Noble on-line. They are available there via distribution.
In this modern day and age, we can see sales reports almost instantly. Still it takes some time for the reports and the cash flow to work its way back to the author. We quite often have to wait until a minimum amount of royalties has accumulated before we receive a check or a deposit into our account.
Regardless of how you publish your book, everyone should know what the trade discount is, what the wholesale cost is, and what the production cost is. Knowing these things makes it easier to understand how much you should be receiving in royalties, and how much you might be getting as de facto retailer, or as one or both middlemen.
I hope this has been informative and helpful. I make no claims of expertise on this matter, but simply say that this is how I have come to understand these things.
Dave
P. S. The Weekly Book Review will return later in the week, or perhaps get pushed back until next weekend.
Yours Truly at a previous SASP speaking opportunity.
Book Marketing Basics
The last time I had the opportunity and honor to speak at a Spokane Authors and Self-Publishers meeting, I offered some observations on marketing. I focused on using e-mail, having a web-site, blogging and being on various social media sites as ways to enhance one’s on-line presence, generate some publicity, and create an awareness of one’s book(s).
Of course there is a lot more to marketing, selling books, than having a computer and being on-line. We seldom talk about the more basic aspects of marketing and selling books; things such as price structure, distribution, cash flow, trade discounts, and more. As self-publishers, we should realize that marketing books can be a different than for those whose books are published traditionally.
To begin, let’s take a look at two average authors and see how they are doing with marketing their books.
First we have the typical, perhaps stereotypical self-published author. This is the individual who especially in the days before Print On Demand would, upon publication of his book, order 500, 1000, 2500, or more copies of his book. (Today, with POD, he can order as few or as many as he needs, as he needs them.) The vast majority of these books now rest in his basement, a spare room, or even his garage. He will have anywhere from a handful to a few dozen in his car… just in case. If you visit local bookstores and other retail shops that sell on consignment, you might find copies of his book available for sale to the public.
He does signings, readings, and makes other author appearances, whenever and wherever he can, usually in the local area, and as time goes by, sells a few copies.
Our second author’s books come to us via traditional or legacy publishing. While he probably doesn’t have a large stockpile of books at home, chances are that his publisher or someone in the supply chain does. His books are not only available locally, but you will find them in stores across the country and maybe even around the world. His author appearances often turn out to be celebrity events. People will wait in line to get in, wait in line to buy copies of his books, and wait in line to have him sign them… providing the event location hasn’t already sold out of stock on hand.
If folks read books by these two authors, they might discover they are of equal readability, and that quite possibly the self-published book is the better of the two. So why does the self-published author track sales individually or by the dozens, while the traditionally published author counts sales by the hundreds, or even thousands of books?
It’s a matter of availability. If our self-published author gets his books into ten local stores and each store sells one copy, he has sold ten books. The traditionally published book could well end up in a thousand stores. If each store only sells one copy, our traditionally published author has still sold a thousand copies. He is able to get his books in all those stores because traditional publishing and the book marketing system work together.
It starts with the publisher. Generally, publishers only publish books they believe will sell well enough for them to recover the costs of publishing and as well turn a profit. In their own interest, publishers typically make some effort to ensure the sales success of books they publish. What’s more, they usually have on board, or can hire or otherwise contract with individuals who can make that happen.
Often, a publisher will put a great deal of effort into books by authors with proven sales records, or books that are predicted to sell well. This practice is often referred to as the “Ninety - Ten” rule. It simply says a publisher will put ninety percent of its marketing effort into books by ten percent of its authors… the top selling ten percent, of course. While it certainly isn’t fair to the typical mid-list or first time writer, it makes perfect sense from a money-making point of view. If it takes a set amount of effort to double the sales of a book, it makes sense to put that effort into a book destined to sell a million copies and cause it to sell two million copies, rather than putting it into a book that might sell a thousand copies, and doubling it to two thousand. Causing the first book to sell another million copies far outweighs the fact the second book did not sell an additional thousand copies. It also might cover up a third book didn’t sell well at all.
The mechanism by which books end up in stores is commonly referred to as distribution. It’s the supply chain, the link from the publisher and printer, via wholesalers and distributors, to the retailer or store. Distribution can seem like a good old boy network or a closed loop system. Those in distribution tend to work only with others in the system. It can be difficult for a completely independent self-published author to get his books into distribution and thus into stores on a nationwide or worldwide basis.
Along with distribution we have something called retail returns. It is simply a guarantee that allows a retailer to return books that don’t sell and not be charged or penalized for doing so. Again, this is something the typical self-published author cannot provide. In many cases, even if a book is in distribution, retailers won’t pick it up if they won’t be able to return it.
All is not lost for our self-published author. Many self-publishing service and assistance companies, those firms we often turn to do the legwork of self-publishing, often have publishing packages and marketing services that offer a chance of distribution and may even provide retail return policies. However, these products and services cost money, and are generally charged to the self-publishing author. Before we cry foul, let’s remember that traditional publishers typically provide these services for books they publish and authors they contract with. They pay for, account for, or otherwise absorb these costs. As a publisher, why should a self-publishing author be any different?
The problem arises when we find that many of self-publishing service and assistance companies charge way more for these products and services than they are worth. Sometimes they tie these services into acquisition of rights that typically should remain with the author.
While some self-publishers avail themselves of these products and services to get their books into distribution, many do not. Some may not be aware these things are available or they decide the cost is too great. Some may find the actual expense to be reasonable but upon looking at the anticipated advantages, decide the outlay is not worth it. Thus, many end up selling books the historical way. They sell directly to the reader. Remember those boxes of books in the basement? How about the satchel of books in the back seat of the self-publisher’s car? Ultimately, these self-publishing authors get their books into local bookstores and other retail outlets on a consignment basis.
Consignment sales are fairly simple. To begin, no money is involved until the book sells at the retail level. Consignment sales involve an agreement between the author and the store in which the retailer takes a small number of books and places them on sale at an agreed upon price, normally the suggested retail or cover price. When a copy sells, the store forwards a predetermined portion of the sale price to the author. In my somewhat limited experience, I have found that the author will receive sixty, sixty-five, or seventy percent of the sale price. If one’s book sells for $20.00, one would receive $12.00, $13.00, or $14.00, depending upon the agreement with that particular retailer. Ideally this is more than the author spent to obtain that copy of the book, and he ends up making a profit.
The books on the store shelves from world famous authors and well known traditional publishers are also sold on consignment. What differs is the way the books got to the store. The author did not directly approach the store owner or manager. The books came into the store via distribution. Rather than a cash payout to the author when a copy is sold, money flows back along the lines of distribution.
If a traditionally published book sells for $20.00, the store might route $16.00 to the distributor they got the book from. In turn the distributor might send $13.00 to the wholesaler, who in turn sends $10.00 to the publisher. Out of that $10.00, the publisher pays the author, let’s say, $1.50 in royalties and keeps the remaining $8.50. For the sake of discussion, we’ll call that $8.50, the publisher’s production cost. It’s what it costs to produce that copy of the book, plus a little towards the overall costs of publishing the book; things such as editing, cover design, interior design, cover, art, and perhaps some publicity and marketing endeavors. The publisher’s production price is pretty much set and is what the publisher expects to receive for every copy that sells.
If we add the production price of $8.50 to the author’s royalty of $1.50, we get the wholesale cost of the book, in this case, $10.00. Those with advanced degrees in mathematics might notice that the wholesale cost is one-half of the suggested retail or cover price of $20.00. This book is being sold on a fifty percent trade discount. Other common trade discounts are twenty-five, forty, and fifty-five percent. Once established, the production cost of a book isn’t going to change, and the production costs of physically similar books from the same publisher will be much the same. If we do not drastically alter the amount of the author’s royalty, the wholesale cost of similar books will be fairly close. When we look at various trade discounts, what really changes is the suggested retail or cover price.
Imagine finding a book from the same publisher, and perhaps even by the same author. While physically similar to the first, it has a cover price of $14.00. A little research reveals this book is selling on a twenty-five percent trade discount. Twenty-five percent off of $14.00 leaves a wholesale cost of $10.50. Perhaps production cost is a bit higher, maybe the author is getting a better deal on royalties, or possibly both are getting a portion of the extra 50 cents.
What is most important to notice is that there is only $3.50 to be shared between the retailer, the distributor, and the wholesaler, while with the first book there was $10.00 for them to share. Brick and mortar bookstores don’t like to deal with books sold on the smaller trade discounts. They would much rather have those with the fifty or even fifty-five percent trade discounts. After all, they are in business to make money. Books with smaller trade discounts are typically sold where there are no middlemen involved, often where the publisher also acts as the retailer, or as often happens in the modern age, by an on-line retailer.
Some of the big box stores such as Wal-Mart or CostCo act as their own distribution network. Often they obtain books being sold on higher trade discounts and then mark them down when they go onto the store’s shelves. They might sell that $20.00 book for $14.00, $15.00, or $16.00. They only have to pay the wholesale cost of $10.00, so they make as much as they would if they sold the book at full cover price and had to split the margin with a wholesaler and a distributor. Their hope is that they will sell more books because of the reduced sale price.
With the self-publishing service and assistance company I’ve worked with, I get a small number of books free as a part of the publishing package. The rest I buy at what they call the author price. It’s what we have been calling the publisher’s production cost. Disregarding the fact that I may have to pay shipping costs, if I sell the book for anything above the wholesale cost of the book, I am earning my royalty for that copy. If I sell if for anything more than wholesale, up to and including the full cover price, I am in fact the retailer, the distributer and the wholesaler. If it’s sold on consignment, the store would be the retailer, while I would in effect be the distributor and the wholesaler. So I earn not only my royalty, but also the portions of the margin normally belonging to the middlemen, and perhaps the retailer.
Also, my books are in distribution through the self-publishing service and assistance company. If one should sell in a store somewhere, money would be routed back to that company just as it would with a traditionally published book. Once they have received the wholesale cost of the book, I am in line to receive my royalty. And in my case, this also applies to books that are sold on Amazon or on Barnes and Noble on-line. They are available there via distribution.
In this modern day and age, we can see sales reports almost instantly. Still it takes some time for the reports and the cash flow to work its way back to the author. We quite often have to wait until a minimum amount of royalties has accumulated before we receive a check or a deposit into our account.
Regardless of how you publish your book, everyone should know what the trade discount is, what the wholesale cost is, and what the production cost is. Knowing these things makes it easier to understand how much you should be receiving in royalties, and how much you might be getting as de facto retailer, or as one or both middlemen.
I hope this has been informative and helpful. I make no claims of expertise on this matter, but simply say that this is how I have come to understand these things.
Dave
P. S. The Weekly Book Review will return later in the week, or perhaps get pushed back until next weekend.