Elizabeth: The Break-Even Point

I’ve recently been reading my way through my TBR pile.  I seem to have landed somewhere in the 1950s (give or take a few years) and have been alternating between English mysteries and “strong independent woman” set-pieces.  Portable typewriters have featured prominently in many of the stories and fledgling writers have abounded.  There was at least one family saved from penury by an enterprising heroine who knocked out a novel in no time at all and received a nice advance check just in the nick of time.

Even my non-fiction reading has included authors and references to advances, though in one case it was an author who had missed a deadline and had to return an advance check- ouch!

Anyway, all of this has gotten me thinking about advances and book sales and led me eventually to the question:  Just how many books do you need to sell to earn out an advance? 

Turns out, the answer is “depends” and “hard to say.”  The publishing world–traditional and indie–is not particularly forthcoming when it comes to financial transparency, or so my delve into the internet has led me to believe.  The closest thing to a definite answer I found was the following:

If a publisher has controlled their costs in production, editorial, and the author contract, they should be profitable if they sell 20,000 copies. ~ Steve Laube Agency post.

Interesting, but hardly a one-size-fits-all answer.  There are many variables including the type of book, the specific author, the number of prior books, what else is going on in the world at the time of publication, the marketing, the book cover, the alignment of the planets . . . well, maybe not that last one, but suffice it to say, there are a lot of variables.

There are some things that can help reduce the variability of at least some of the variables involved.  Basically:

  • write the best book you can
  • hire a great editor (and listen to the feedback you receive)
  • create/commission an attention grabbing cover
  • publish with a plan
  • market, market, market
  • lather, rinse, repeat.

While “writing the best book you can” is squarely in the author’s court, responsibility for the other steps depends on whether the book is being traditionally published, self-published, or published in some other way I’m at a loss to think of right this minute.

Which leads me to my next question:  From the self-publishing perspective, “Just how many books do you need to sell to earn back your financial outlay?”

The cost of hiring an editor and a cover designer, not to mention paying for marketing and perhaps engaging a web designer can add up.  And there are probably numerous other costs that I’ve forgotten to include.  So many of the books I see being advertised or that pop-up when I’m browsing on Amazon seem to be in the 99-cents to $2.99 price range, so I’m guessing it takes a fair number of books to earn enough to cover the expense of getting the books published and marketed.

Several of the 8Ladys have gone through just his very publishing process recently, so I’m hoping they can shed some light on things.  Not that I’m about to dive headfirst into publishing, but as I mentioned in last week’s post, I’m establishing some new goals and doing a little fact-finding along the way.  Plus, I find this whole process quite fascinating, though the lack of transparency is a little disquieting.

As I was rummaging around in the internet earlier today, I came across the comment below, which offers an interesting suggestion for how to evaluate publishing “success.”

Instead of asking how many books they should expect to sell, Authors are better served by asking themselves how much opportunity, revenue, and personal fulfillment they can generate by putting the right book in front of the right people. ~ Scribe post

Some interesting food for though there.

So, anyone have any data-points to share?  I’ve got my spreadsheet and calculator ready and waiting.

13 thoughts on “Elizabeth: The Break-Even Point

  1. It really does depend, Elizabeth!

    I’ll gladly share what I know (I bet Jeanne will, too), just trying to decide where to start. Maybe to say it’s possible to earn a living–even a good living–from writing, but for most authors, whether you go trad or indie (or hybrid) it’s a long game. If you go trad, unless you’re very lucky, you’ll have to build a career, and that may mean more than one agent, more than one publishing house, and multiple books as you work your way up to the big agent who’ll make you the big deal. If you’re an indie, you’ll have to build visibility and an income stream, and that will most likely mean multiple books, maybe multiple genres.

    Joanna Penn says a writer should define (specifically and measurably) what success means to them. That will drive the choices and compromises you make. It might not be enough to write the best book you can. If you want to make money, fast, you might have to write what sells. Let’s say your best bet might be to write reverse harem merman erotica (okay, I made that up, but it’s probably out there somewhere). You might write short, fast and graphic, and publish a book every two weeks. You’d give them titles stuffed with the keywords that readers of RHME search for, and self-designed covers with lots of mer-chest. You wouldn’t bother with a newsletter or a website because your readers aren’t looking for that. Much of your income might come as free reads from the Kindle Unlimited subscription service. You’ll have to keep an eye on the market, and if the reader appetite for RHME starts to wane, you’ll move on to writing the next hot trope.

    Unless you’re planning to go this route or you’re incredibly lucky, it would be good to have another way to pay the bills.

    I know more about indie than trad, but my understanding is that the business models are very different. This is a gross generalization, but here goes: trad publishers make most of their income on new releases. So a book has to make most of its money in the first few months. They still sell a lot of print copies. Indie publishers make money from read-through–so they make more money as they build up a backlist and a readership. They tend to sell mostly ebooks. Trad publishers have overhead, so the author gets a lower % of each book sold, but big publishers should bring marketing muscle to deliver more sales. Indie publishers get a much higher % of each book sold, so they can afford to price cheaper and need to sell fewer books to cover their costs, but they have to do all the heavy lifting themselves (and cover the upfront costs).

    Regarding trad–this is mostly (but not entirely) guesswork on my part. Let’s take your number of 20,000 copies above. Say they’re at $20 each, that’s $400k. Except bookshops expect a 50% discount, so that’s a top line of $200k. Say print costs are $5/book, that’s $100k. That leaves you $100k for editorial, cover design, marketing, paying the author, overheads and profit. The author will likely get her advance in three tranches (on signing, on submitting a finished manuscript, and on publication). The process will likely take at least a year, could be much longer. Author has to pay her agent (probably 15% of her share).

    One other thought about advances: I believe it’s not always required or expected for the author to earn out their advance. It’s possible for the publisher to make a profit on a book even though the author doesn’t earn out. The trade-off between cash now and cash later depends how successful the author is, how many copies the publisher expects to sell, and how much of a risk the publisher wants to take. And the success or failure of each book obviously affects the investment the publisher chooses to make in the next one.

    On the indie side of the fence: say the author self-publishes the same book for $3.99. She’d earn roughly $2.80 per copy. If she could sell 20k copies, she’d make $56k, though out of that she’d have to cover her upfront costs. Problem is that it will likely take her a very long time to sell 20k copies. And she’ll probably have to advertise, which takes more money.

    That said, Mark Dawson, who runs self-pub courses for indie authors but also writes thrillers, published his royalty statements last year. From memory, I think he made more than a million (I think it was pounds but could have been dollars) from his fiction. So over time, successful indies writing in popular genres can do very well indeed.

    I could go on and on, but you get the idea. I love what I do, and I couldn’t be happier with the choices I made, but I’m glad I don’t need my royalty check to buy groceries–and I’m lucky that I can afford the upfront investment needed to self-publish without making too many compromises. I guess it will be another five years or so before I can get a feel for how much of a financial success (or disaster) I’ve made of my self-pub adventure.

  2. Jill’s done a great job of presenting a broad view above. I’m going to present a more detailed look.

    A year or so ago, when my husband got freaked out by the constant out-go of cash toward my publishing journey, with very little inflow to make up for it, I put together a spreadsheet of what I’d spent on each of the first two books, and was spending ongoing (website maintenance costs, RWA dues, advertising).

    Here are the categories:
    Upfront costs:
    Website design
    ISBN’s

    Annual costs:
    Website hosting
    Backup service
    Website maintenance
    RWA dues (optional)
    Training courses (both craft and business)

    Per book costs
    Developmental Editor
    Cover
    Blurb
    Copy editor
    Proofreader
    Formatter
    Stock Photos
    Publicity
    Advertising
    ISBN’s
    Copyright

    And here is the other side of the ledger:
    Revenue
    Sales of books on Amazon
    Page reads from Kindle Unlimited:
    Sales of books in bookstore (one local seller stocks my books)
    Sales of books on B&N (I did not set it up on Apple/Google/Kobo/et. al. because it’s in KU)

    You’ll notice (I’m sure) that there are no numbers associated with these categories. That’s because the imbalance is so humiliating. I’ve spent thousands of dollars and made less than a thousand back.

    From where I stand now, I can see a lot of mistakes I’ve made (like putting snakes on my covers and having to do my website twice) that ran up the costs. Another significant cash outlay I’m not sure I’d make again was for ISBN’s. If you only put your book on Amazon, it doesn’t need ISBN’s and if you’re in KU, you can’t put your ebook anywhere else, so the value of having your own ISBN’s is very limited.

    I can also see things I underspent on (like covers). Good covers are make-or-break for selling books online, so if you’re going to skimp, that’s not the place to do it.

    When I started on my journey toward publication, I knew I had to make a choice between writing for my own satisfaction and writing to market. I chose to prioritize personal satisfaction. If I’m going to continue to publish with any hope of better sales figures, I’m going to have to think more about what sells (i.e. what other people like to read).

    While I’m still convinced that if readers would give my books a chance they’d really enjoy them, the reality is that in a world where you only have a couple of seconds to make a sale, starting off with a product that isn’t intuitively appealing (Snakes! God! Satan!), I’m making it harder for myself.

    Right now my plan is to complete the third book in my trilogy and then stop and think long and hard about what to write next. Because the first step in selling a product is creating a product for which there is demand.

    • I love your breakout, Jeanne, that’s really helpful. Writing for your own satisfaction instead of writing to market sounds like a great choice–chasing the market seems like such an exhausting activity–though that is not an easy choice to make.

      Sorry the snake didn’t work out the way you initially thought. I thought it was great and worked for stories, but I’m just a single data point. Glad you were able to pivot successfully.

    • Really good stuff, Jeanne!

      Your books should find a greater audience! I think one of the marketing problems is that what YOU find juicy (Snakes! Book of Job!) isn’t necessarily juicy to the mass market — or in many cases, people have bit into that apple and found it bitter fruit indeed, and don’t want to try a new version. But you manage to make all that very palatable, and there’s so much in the relationships between a woman and a supernatural being that’s very sexy and fun!

      Still early days.

        • I think it’s a connection problem — lots of people would enjoy your books, but don’t see them, which leads to the perceived lack of success. Some connected person will read them one day, and suddenly you’ll go viral . . . lol overnight? After working hard for years, anyway. You have paid your dues; could be tomorrow, could be in five years.

  3. Just to give you an idea of the cost of producing a single book (including audio) — I paid $4800 for developmental editing, copy editing, cover design (including stock art), PFH recording, and 10 ISBNs (necessary for me, as I went wide and will again). That does not include website design/maintenance, postage, marketing, dues, conferences, the software required to self-publish my book, or anything else.

    It also doesn’t put a price on the time I’ve spent over the last eight years writing. The goal is that someday, 10-20 books from now, I’ll start making money on back list and will compensate for this outlay. It’s definitely a marathon and not a sprint. I’m not the kind of person writing to market, either. I’m writing because I like to write historicals. Like Jeanne said, there’s definitely a way to make money at this by writing to market. That’s not something I’m interested in. It feels more like work to me (and fortunately, I can indulge in this “habit” I have).

    On the flip side of all of this, I don’t have to pay taxes on my meager income. LOL.

    • Justine, thanks for weighing in. It’s great to get at least a ball-park figure of the outlays associated with getting a book to market.

      • Of course. And some expenses (like the cost of the software to produce my own ebook/paperback) are one-time expenses. Marketing is a constant expense, though, and I’ve temporarily decided to rein that in, because I’m only getting meager sales, and what I really need to be spending time on is writing books.

        • This is a great point about one of the costs of going indie — even if you outsource the covers and editing and all that (and I think it’s a good idea to do it), you still pay a cost in writing time researching your options to get the best one for you. (But on the other hand, you can make sure you get a product you really like.)

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