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Math Lessons for Small Presses
Lesson #1
PUBLISHERS and how they sell books:
If a publisher wants to get their books into a bookstore or library, they will have to sell their book to a store or a wholesaler at a deep discount. That discount is usually between 40 and 55 percent off of the retail price. It can sometimes be 60 percent or more if the store is part of a chain or a wholesaler that has a central warehouse and has extra costs associated with getting the books to THEIR customers.
The book buyer for the wholesaler or store will contact the publisher, place a purchase order for books, and expect to receive them in five to seven days. They expect to be billed for these books, but will usually require at least ninety days to pay.
If you want to become a publisher, here are a few things you should think about. You have to plan and budget carefully. Small presses usually aren’t paid for three to four months or longer. Plan for not getting paid for 6-7 months.
You will have to pay to ship the books to them. They rarely will pay a small press for shipping. If you want to take a stand, I applaud you! But it will cost you some sales.
Now, are you ready for the big hit? Publishers may not even see the money they think they are owed because the books are bought on a returnable basis. Fully returnable. One hundred percent. (Or as we used to say when we were kids: backsies!) After a publisher has shipped a book to a store, the bookstore has the right to ship it right back for any reason.
So, a book priced at retail is $16.95
A publisher sells it to a wholesaler for $7.63 (55% discount)
The publisher then waits sometimes 6 months for the $7.63 or for the book to be returned.
If the book’s printing and design/editorial costs are in line with what they should be, each book should have cost the publisher approximately $ 3.25 per unit to produce.
The shipping and distribution costs of GETTING a $16.95 book to the wholesaler is usually around $3.50 a book. (this factors in calls to stores and wholesalers, sample copies or flyers sent to buyers, shipping of books, materials, returns… it assumes that you are doing everything yourself.
That leaves the publisher .88 cents a unit in profit.
Where does all the rest of the money go? Why does a wholesaler take so much? That leads us to next week’s Lesson #2
“I want to sell a million copies”
I hear this sentence at least three times a day. A million copies. The magic number. Just thought I’d throw a few more magic numbers out there….
Here is a brief run down of Stephen King’s latest marketing program for his last book from an October 2011 Wall Street Journal Article.
Mr. King and his publisher, Scribner, face an odd challenge as they unleash an elaborate marketing campaign to promote “11/22/63.” How do you rebrand one of the world’s most famous and successful living authors? Scribner is targeting history buffs with book-giveaway promotions on bio.com and history sites. To reach news junkies, the publisher bought ad time on 11 p.m. news programs in New York, Los Angeles and Chicago. The 30-second ad, which will also run on the CNN airport network and on the A&E and Syfy networks, shows archival footage of Kennedy’s Dallas motorcade, with a voice-over that says, “What if instead of justwatching history, you could change it?” Mr. King’s book tour will include appearances at the John F. Kennedy Presidential Library and Museum in Boston and at the Sixth Floor Museum in Dallas, the site Oswald fired from. The Dallas museum is preparing to host 1,000 people.
So what do we take away from this?
Mr. King has a huge following and decades of New York Times Best Sellers behind him.
He was on the road for weeks doing events in high-profile locations.
His publisher purchased ads on CNN, A&E the 11pm news in major markets.
Scribner also launched a multi-platform online campaign that gave away over 3000 books.
The magic number since the book released last November? According to Bookscan, Mr. King has sold 576,361 copies across all formats.
One of the best-selling authors of all time spent over a hundred thousand dollars on marketing with his publisher and even with eBook sales included, did not reach a million copies.
What is the real magic number?
It starts with the amount of time you spend getting the package of your book right
It is followed by the number of months you spend planning and orchestrating your launch
Right behind that is the number of ads and programs you participate in.
But that last number does not count much unless the ads and programs are in top venues (USA TODAY, PEOPLE, CNN…)
Next up is the number of PR and marketing professionals you are working with.
Then is there are the amount of reviews you get
A BIG number is how many retailers are getting your marketing and PR information to convince the buyers to buy your book.
Finally, there is the elusive “tipping point” number. How many people have to love and recommend your book before it takes on a life of its own?
So what is the answer to the question “what are the right numbers for my book?”.
It is different for everybody, but start with THOSE numbers and THEN tell the world how many you plan on selling. If you are going to spend 20 hours and $4000 on sales and marketing, your book will not “catch fire”. The stories of books that grow from nothing and become huge successes have enormous numbers behind them. Numbers of hours, numbers of dollars, numbers of supporters…. the ratio varies, but the totals are the same. At least a million….
Your Spine Is Your Cover
Here’s one of the dirty little secrets in book publishing. Publishers spend countless hours and dollars working on their covers, but they often miss the point. With the exception of online retailers, your book spine is your cover.
Brick and mortar stores are packed with books. New releases. Backlist books. Series. Gift books.
Walk to any category (perhaps your own) and take a look at how many books are crammed on to the shelves.
What do you see? The spine, if you’re lucky.
All to often publishers make the mistake of not focusing at all on the spine of their book, not realizing that this is their number one marketing tool in brick and mortar stores.
What does this mean for you?
Spend some time on your spine.
Spine Size
Think about bulking your page count to make sure that your spine has presence. We’re not recommending that you fluff your book with overblown margins or blank pages. But we are recommending that you don’t cram in your text so tight to save a few cents on your printing prices.
Push it out a signature or two. It might make all the difference between getting lost on the shelf and standing out because you’re 1/8 of an inch bigger. Choose paper that bulks. You might be surprised at how easy it is to snag an extra 1/16 of an inch through paper weight alone.
Spine Color
Spend some time analyzing what the spine colors are in your category. This is extremely important. If every spine in your category is white, choose a vibrant color. Choose something that stands out. Choose something that practically leaps of the shelf and screams “pick me!” This is the time to buck the trends and be a little different. If you’re not sure what will work, grab some books that have different spine colors and stick them on the shelf where your book will go. Which colors pop to you? What do you see first?
Spine Text
Make it readable! Make it bold! Make it big! Make sure that the reader sees your spine and your text right away. If you’re standing 3 feet away from your spine, you need to be able to read what it says (see above about spine width – the bigger the spine the more room for bold text).
Take it to the Bookstore
Let’s keep this next bit between us…
The best way to really know if your spine works is to print out several versions, colors and copies true to size. Cut the spine out, getting rid of excess paper so you’re literally holding your book spine in your hands. Put a tiny piece of tape on the end of each option. Take your spine options to the bookstore and visit your category. Stick the various spines on the books that will sit next to you (usually alphabetical by author’s last name within category or subcategory). Which one works? Do any? What do you see? Can you read your title? Do you get lost on the shelf because you’re too tiny or you blend in too much?
Lack of attention to your spine can kill your book in the marketplace. Once you get in to stores, your spine really is your cover. When you consider the time, money and energy that you spend getting your cover right, promise us, do the same with your book spine.
P.S. Remember, be polite during any bookstore research. Bring your spines with you when you go and don’t interfere with bookstore customers!
“But how many books will I SELL?” – Author Events Part Two
One of the first things a publisher or author will ask of any marketing plan is “what is the return on my investment going to be?” The person with the checkbook wants to know that if they write out the zeros, they can plan on a significant return on their investment.
I hate to tell give them the only answer that anyone can give… “It depends.”
Carol Zelaya, author of the Emily the Chickadee series, published by Richlee Publishing, launched her first children’s book in April 2008. She hired a fantastic PR firm to set up the launch, complete with a book signing tour covering four states that she expected would stimulate sales. Her expectations were quickly dashed.
“I mistakenly thought that once you were invited to do a book signing, you had really made it.” says Zelaya “I was so wrong. Even when the stores did tons of publicity and put up big posters, no one came.”
But are sales the only purpose of an author tour? What results and returns can authors expect when the people don’t show up at the event? Why do an author event if no one can guarantee sales?
“The thing you have to remember is the benefits outside of the event.” Says David Brody, author of several novels, including Cabal of the Westford Knight, published last February by Martin & Lawrence.
If you go into a tour looking at it strictly in terms of sales during events, it will not work, Brody says. “I may sell only 5 or 10 books at an event, but that is not the point. I have to take into consideration that the store orders the books a few weeks ahead of time, makes a display, puts up a poster; plus, the manager and employees get to know my book. At the event, who knows who will hear me and what they might tell other people? And after the signing, I will leave a few signed copies and those might get displayed for a few weeks. I can often attribute 50 or 60 sales to an event that drew only 10 sales that day. If you look at it that way, the economics make sense.”
So the question I put out there is this… “What is the REAL return on your author tour investment?” I’d love to hear from authors who have recently toured to see if they think touring is worth their time and money.
Distribution… The Good, The Bad, The Ugly
Not all distributors are created equal. There are good and not-so-good distributors.
The good ones will keep the books in their warehouses, send their reps out to bookstores to present the books to the buyers, take orders, ship the books, negotiate the cost, bill the stores, and after taking their cut, hand over all the profits paid back to the publisher. When possible, the reps who sold the books to the book buyers will give the publisher feedback as to the reaction the books received. Direct, front-line, market-driven feedback is the key to a good distributor. They can help you keep your determination and focus when books are taking a long time to sell. More often, the feedback can teach a publisher about the changes necessary to the next print run of the book to increase the salability.
The not-so-good distributors will warehouse a publisher’s books and wait for a bookstore to order them. Once the order comes in, they will ship, bill, and handle the accounting, but there will be no follow-up, no creativity, or marketplace-driven marketing or feedback.
Be careful when choosing a distributor. Make sure you do your research. Contact a few of the publishers listed on the distributor’s Web site and ask how they like working with their distributor. Call your local independent bookstore and ask if they carry that particular line of books.
I recently asked Greg Snider of Blu Sky Media Group, a well respected distribution company, to offer some advice about what to consider when researching distributors:
Some questions to ask a prospective distributor:
1.) How long have you been in the distribution business?
2.) How many publishers/companies do you distribute?
3.) How many titles/products do you distribute?
4.) What genres/categories do you distribute?
5.) How many sales reps does your company have? (In-house or outside commission?)
6.) What are your set-up/cataloging fees if you were to accept me as a client?
7.) What percentage of net sales do you take as your distribution fee?
8.) Are there any additional monthly charges that I might incur? (Warehousing, order fulfillment, returns processing, administration, etc.)
9.) How far in advance of my release date do you need to properly sell my title?
10.) What is the length of your agreement?
What you should expect from a distributor:
1.) To correctly list your title data for ordering with all the major brick and mortar, online retailers, and wholesalers.
2.) A thorough presentation of your title to the major retailers and wholesalers in their territory.
3.) Inclusion into the distributors catalogs.
4.) Inclusion of your title in the tradeshows the distributor exhibits/attends.
5.) Timely processing of your title’s orders and returns.
6.) Monthly printed or online sales and inventory reports.
7.) Monthly communication via phone or e-mail to discuss progress.
8.) Access to marketing and advertising opportunities with wholesalers, retailers, and/or consumers.
9.) Continual sales of your title even after the first season.
What you should not expect from a distributor:
1.) Miracles! Your books will not magically appear on every bookstore shelf.
2.) To do all the work. Without a solid, well-planned advertising/marketing campaign geared toward your audience, the distributor will not be able to sell your title to the retailers and wholesalers. This is the publisher/author’s responsibility and not the distributor.
3.) Guaranteed sell through. Once a distributor gets your books onto a bookshelf, it is the publisher’s job to make sure that they fly off the bookstore shelf.
Getting into a distributor’s catalog is a difficult task. It is a very competitive segment, and good distributors are careful to only take on clients whom they feel will be successful. Every successful publisher increases a distributor’s reputation; an unsuccessful publisher can drive a distributor’s reputation down.
What you can do when approaching distributors to improve your chances:
1.) Have your book/advanced reader copy professionally designed. Packaging is key to all products including books, so a professional design is a must.
2.) Have your book professionally edited. Do not use your cousin Susie who’s an English teacher at your local high school as your editor. You need a professional to help you make your book the best it can be from a content standpoint.
3.) Have a detailed plan for your marketing, advertising, and PR. Also, include your budget of what you intend to spend. We see so many submissions from publishers/authors who do not have a plan to let consumers or their target audience know the books exists.
4.) Be willing to listen to the professional. Distributors, retailers, publicists, book shepherds make their living selling books. If they give you advice regarding your book, take it. It may mean the difference in selling a ton or none.
Distribution contracts usually start at two-year terms. They are taking a big risk by taking you on, and they want to safeguard that decision by protecting their investment with a minimum two-year term. It takes at least two years to launch a program properly and to start to see results. They are well within their rights to ask this of a publisher. However, you are well within your rights to get certain agreements from them as well. You should be able to get out of your contract if you can show that your books did not receive the activities contracted.
A distributor’s cut could vary from 25 to 40 percent of the net billing of each book. Some distributors will claim 15 – 20 % distribution fees, but after the charges, fees and add-ons, the total is back up over 25%. Just about every distributor has additional monthly fees, and most require an initial deposit for new clients, but it is up to you to add up what you are really paying. Don’t be fooled by a lower initial number. So the math.
Before you balk at the cost, keep in mind that it is very difficult, expensive, and time consuming to handle your own warehousing, purchase shipping materials, and learn how to ship exactly how each store wishes their shipments to arrive … and everyone is different. (It’s a little joke they like to play on publishers. I am convinced that bookstore owners get together every two years to devise slightly altered yet completely incomprehensible trafficking instructions.) Then comes the billing, monthly statements, handling claims for books damaged in transit, taking in returns, and reconciling the amount due with what the bookstore believes is due.
After that, consider the money and time it takes to tell the country’s thousands of buyers about your books. The sales reps working for distributors have long-standing relationships with the book buyers in your hometown, across the country, and in the major chains. You would not be able to start a fledgling relationship on your own with these buyers. What an experienced sales rep can often do with a phone call, you could rarely accomplish with six months and a great deal of research, e-mails, flyers, catalogs, paperwork, and free samples.
But nothing replaces a publisher’s drive and efforts. The main thing to remember is that a distributor is often as good or as bad as the relationship between the publisher and the distributor. If yours is one of thousands of books on the oppression of clover farmers in New Guinea in your distributor’s catalog, you will not get the time and attention you desire. If you are not out there pushing your book into the press and media, creating a demand for your distributor to work with, they will not keep you for long.
Take your time choosing a distributor. Make sure you are a good fit and that you both share the same goals for your books. If you cannot find a good fit with the distributors that are willing to carry your book, consider doing your own marketing and sales for the first year. Better to wait and do for yourself than be trapped in a loveless “marriage” with the wrong distributor.
D5 Creation