The economics of eBook publishing

The economics of publishing books in electronic form are too good to ignore. Today, you will find very few reference books that are published in a traditional fashion. CD-ROMs are manufactured in amazing numbers allowing families of all income levels access to information.

What are the economics of traditional book publishing?

Here is what a typical self-publisher is up against. In order to get book printing costs down to a bearable level, in
other words in the $3 or $4 range, the self-published author will need a first run of books at around 3000 to 5000
copies. The cover art will cost at a minimum of $2500 for the first run. If you work the numbers, the self-published
author has to spend at least $12000 in printing costs alone.

This is before the author has sold a solitary book!

After the author has spent the money he owns 3000 copies of the masterpiece.

How do the authors sell and deliver their books to the reader?

Most self-publishing marketing books will tell you that in order to sell the book; the author needs favorable reviews.

The review process works like this:

The author sends out press releases to book reviewers representing the genre of the book. If the reviewer
becomes interested in the press release, the author will receive a request for a “review copy.”

The author digs into the stash of books, pulls out a copy, attaches a reviewer or a media kit, and pays for the
postage. On a $5 book that may add another $5 in shipping materials as well as postage. Many reviewers will ask
you to ship your books by overnight express. The author may find himself spending up to $18 - $25 per reviewer!
One reviewer in Berlin, Germany became very excited over my first book. He requested that I ship a review copy
by airfreight, from Phoenix, Arizona in the United States to Berlin, Germany. It cost me around $75 to ship the book and review kit.

Guess what? I never received a review nor heard from the reviewer again!

Experts in the self-publishing field, state that you must send between 300-500 review copies to target genre
reviewers before your book has a chance to become a hit. If you send out 500 book copies at a minimum of $10
per book, you have spent another $5000 of your money.

Now you have to market the book. It’s your job as the self-published author to get the books into the store, and it is your job to move the books from the store to your customers.

Many self-publishing marketing experts feel it takes around $30000 per title to effectively market a book.

So here is the rundown of what it costs.

What it costs to print and sell a self-published book

$12000 to print and place a cover on your book.

$ 5000 to send books to reviewers.

$30000 to market each book effectively.

$47000 is your total investment.

Out of your initial 3000 run of books you have already given away 500 leaving you with 2500 copies to sell. Assuming your retail price is $20 per book and you can maintain that retail price for one year, the most you will
bring in if you sell every remaining book is: $50000

If you subtract the $47000 you incurred as expenses you will have a net income of only $3000.

Believe me when I tell you that will be the hardest you have ever worked for only $3000.

Are these figures realistic? Yes, they are! Ask any self-published author what it cost to print and sell books.
Now let us use an example of creating or publishing an eBook and bringing it to market.

We will assume that you will want your own website. It is possible to sell eBooks without one, but lets look at all of the possibilities.

Let’s assume that you have a computer and word processing software. You will need that anyway to self-publish
your book the traditional way.

What it costs to publish and sell an eBook

What does it cost to publish and sell an eBook?

1. Cost of a Website with secure credit card ordering is $1200 per year. I am estimating on the high side here. You can spend less and have an effective website.

2. Cost of an Internet provider is $360 per year.

3. Adobe Acrobat Software is $269 (One time charge). Create as many eBooks as you want with this software. Check out the Resources on my website and get the best price if you wish.

www.eBook-marketing.com

4. Marketing costs. You can get by using “sweat equity” in other words you don’t need to spend anything. (You just saved $30000 Congratulations!) I will explain “Finger Tip Marketing” in the articles later on.

5. Cover Graphics. You don’t really need any unless you are posting to Amazon.com or barnesandnoble.com.
There are people who will charge $500 or less to create an attractive eBook cover for you. Let’s estimate on the
high side of $500. You can use software like Paint Shop Pro or other graphic design software or take a picture,
scan it into your computer and use that as your cover art.

6. Review Copies. There are eBook reviewers. You send the reviewers e-mail attachments that include copies of
your eBook. Your cost to send it is $0. Think of how many reviewers you can service on the Internet. You will be
happy to send out a review copies when you are not paying $10 or $20 per reviewer.

7. Once you own your eBook publishing software, the cost to “print” the eBook in digital form as an Adobe Acrobat, ASCII text, or as a Microsoft Word Document is $0.

Your total cost of the eBook production run of 3000 eBooks and your cost of sending these to 500 eBook reviewers including the total marketing costs for one year is $1129. Now that you own the software for your next eBook projects, the total cost for each successive eBook is $860.

If you sell that $20 book for only $10 as an eBook thus giving your reader 50% savings, you will bring in $30000
less $1129 or $28871.

Many on-line eBook sellers are selling eBooks at only a 20% discount compared to the printed and bound versions.
If you follow that model you will receive $48000 with out of pocket expense of only $1129.

I am assuming a print run of 3000 eBooks in this example. An eBook is a digital file. If you have orders for
10000000 copies for the year, the cost will still remain at $1129 for the first year!

Do you see why this may be the best time in your life to consider finishing that novel or to begin selling eBooks and booklets on-line?

Now is the best time your eBooks will stand out in a small crowd. In just a few years the situation may change. It
may actually become harder to break into the publishing business. Everyone will be in it and your eBooks may
become harder to differentiate from your competition. Acting now and acting fast will get you way ahead of the
learning curve. It will also guarantee that you will participate in those amazing profits.

On Tuesday, March 14, 2000 Stephen King released his book Riding the Bullet. This short story was only released as an eBook. He released it as a RocketEdition from NuvoMedia, and as Adobe Acrobat digital files from Softlock and as a download to a Palm Pilot formatted and distributed by the Peanut Press. There were over 400000 orders for Stephen’s eBook, worldwide in just one day! 400000 orders for a book for an entire year would be fantastic. It cost just as much to produce one copy as it does to print 400000. You have that capability through selling your eBooks off of your own site and off of sites hosted by others.

Once eBooks get into the mainstream of Bookselling, the numbers should really go off the charts!

Are you ready? Lets go ahead an publish our first eBook and market it over the Internet!

Creating your first eBook

Authors tend to be perfectionists. Once you have completed your work and look at it, you realize that changes
could have been made to make a much better product.

That is the best part of creating eBooks. You can publish and sell your first draft, capture the names and addresses of your customers, publish a second draft, contact your customers by e-mail or give them the updated eBook at no cost. (You can always have them subscribe to updates of your eBook files for a fee) You can perfect your eBook and give your e-customers, a wonderful product that grows and expands.

You can market your books or complementary books and products to your customer base. You will develop relationships with your readers. Isn’t it ironic that with the mass appeal of the Internet the author can actually hand sell titles to readers anywhere in the world?

The economics of publishing eBooks is too good to ignore. Now is your chance to become a published author. This
is the most exciting time in human history.

Right now there is an engineer from Bangalore, India, an architect from Malta, a nurse from Hong Kong, a construction worker from Sweden, an automobile worker from Germany, a homemaker from Salt Lake City, and a
school teacher from Italy, who want to read your eBook!

Act now and feed the world with your creativity and mark the world with your brilliance!

OK lets get the snowball rolling!

Right, so we’ve got the site all nice and sticky, its been optimized for search engines and its been submitted to the major engines and automatically sent to FFA pages, now to give the little guy another push to get him going - But this time its going to cost a little!

We need to get the snowball on its way and kick start the journey down the hill.

So lets get going.

Regular search engines take months to get positions in and start bringing the traffic. The way to get traffic immediately from the search engines is to start dealing with the pay-per-click search engines such as Overture.com. (Other sites that are currently famous is Google Adwords, Google Adsense and www.miva.com)

Overture.com allows you to set up an account and then you only pay a set fee (almost in an auction model) for each visitor to your site. If you bid one penny per visitor, then you only have to pay a single penny for every visitor to your site. If you bid ten cents, you pay ten cents. If you have tested and can bid a dollar per visitor, then that is what you will pay - How much you pay for traffic is up to you.

There are now several hundred search engines following this model. Most of them don’t produce nearly as much traffic as Overture.com, but some of them can be used once you have proven the effectiveness of your keywords at Overture.com first.

The first step is deciding on which keywords to bid on and then how much to bid. Its a good idea to set aside a monthly amount for Overture.com and decide to budget for that amount. Its possible to set-up an account by making a deposit and then having automatic deductions up to a pre-determined monthly limit. When the account is exhausted of funds then the listing is removed from the engine until the next month.

Pay per click search engines are perfect vehicles for providing highly targeted traffic. You are paying only for a visitor who has an interest in your website which will be determined by the link headline and link description.

There is an optimum price which you should pay for every click through or visitor. This price will be determined by the average value of the visitor. This is why you need access to detailed website statistics as you will need to know the average number of daily visitors. Once you have this figure divide the average daily net profit received by the website and this will give the average value of each visitor.

As a rule of thumb a bid of 50% of the average value is a guideline for how much to bid for each keyword. Then it doesn’t matter how much you are spending - you are making profit. So just keep topping the account up as and when required.

There are lots of pay per click engines around at the moment

You can find them at: www.payperclicksearchengines.com

Unlike building a new brick and mortar business in Downtown Anywhere, the things you’ll need to start a business on the Internet are CHEAP.

Here’s a list of the basic tools you’ll need to become an affiliate marketer.

• Desk
• Chair
• Computer
• Internet Connection
• Email
• Text Editor

You probably already have all those things, right?

Even if you don’t have the desk and chair, you can always throw the laptop on your bed and work from there.

Here are some basic expenses…

Register Domain
Hosting
Web Site Template

$ 8.95/year
$ 8.95/month
$10.00 - $50.00 (once)

With start-up costs this low, I don’t know why anyone would consider starting a business anywhere other than on the Internet!!

There are HUGE benefits to promoting affiliate programs with your own home-based Internet business…

1. No Production Costs - The cost to develop and produce a new product is prohibitive for almost anyone who wants to start a home-based business. With affiliate programs, production costs aren’t an issue. The product has been developed and proven - all on the merchant’s nickel.

2. Low Cost Set-Up - Compared with building a brick and mortar store, starting a home-based Internet business is relatively cheap. You probably already have a desk, Internet-connected computer and word-processing software, which is all the equipment you may need.

3. No Fees for Joining or Licenses to Buy - I often compare doing business as an affiliate, with distributing a line of products in the real world. The biggest difference is that the distributor must often pay for a license to distribute products within a limited geographic region. Affiliate programs, on the other hand, are usually free to join, and geographic market reach is limited only by the affiliate’s ability to promote his web site.

4. Choose From Thousands of Products and Services - What isn’t sold online? That list must be shorter than the one describing all that IS sold online. There are thousands and thousands of affiliate programs selling every product under the sun. That makes it easy to find products related to your current or planned web site.

5. No Sales Experience Needed - When I started my affiliate business, I had absolutely no sales experience. That wasn’t a problem, however. The companies I affiliated with provided excellent marketing material. Using their sales copy, I was able to get my first affiliate site up in less than a day.

6. No Employees - The largest expense of most businesses is employee salaries. Although there might be times when you need or want someone to work for you as an affiliate, it’s doubtful you’ll ever have to worry about hiring full or part-time employees. When you have a project you want to hire out, it is easy to find specialists in every computer-related field who can work for you from the comfort of THEIR own homes. You pay only for the project, and never have to worry about ongoing employee-related benefits and deductions.

7. No Expensive Merchant Accounts Needed - Setting up a merchant account for any business is a time-consuming and costly business. It’s even more tedious for Internet businesses. However, merchant accounts aren’t a concern when you’re an affiliate. The merchant bears that cost and handles all processing of payments. You never have to lose sleep over potential chargebacks, fraud or losing your merchant account when you’re an affiliate.

8. No Inventory to Carry - Even if you live in a small one-bedroom apartment, as an affiliate you can sell large items without storage concerns.

9. No Order-Processing - Forget the problems associated with collecting and storing names, addresses, credit card numbers, etc. The merchant does all that!

10. No Product Shipping - The cost and hassle to prepare and ship products to customers worldwide could be staggering. Affiliates never have to worry about packaging supplies or postal rates.

11. No Customer Service Concerns - Do you hate the prospect of dealing with nasty people or customer complaints? Don’t worry about it! The merchant handles the snivelers.

12. Make Money While You Sleep - What other business allows you as a sole proprietor to keep your doors open and keep making money even when you take breaks or after you go home for the night?

13. The World at Your Doorstep - The Internet is the world’s largest marketplace. You can drive more visitors to your online store in a day, than many small-town merchants see in in a year.

14. Minimal Risk - The product you chose isn’t making money? Dump it. Take down your links and promote another! It’s that easy. There are no long-term contracts binding you to products that don’t sell.

15. High Income Potential - If you have a job, your salary or hourly wage is probably pre-determined. Maybe there’s not much, other than working overtime, that you can do to increase your income. With your own affiliate business on the Internet your income potential is limited only by your desire, effort and imagination.

Audience: employees, civic associates
Message: We need to do more at a lower cost with fewer people.
Tone: motivational, informal
Timing: 18-20 minutes

Asking me to talk about productivity is like asking third-world countries to apply for a loan; persuasion just isn’t part of the picture. I preach the subject with the fervor of a tent revivalist. It’s practicing the message, however, that’s the hard part. But practice it, we must.

I want to begin by raising a few questions, and then outlining a few answers we’ve stumbled onto. Perhaps—and we’re really hoping on this one—you can add to our answer list.

First the questions: What’s happened to our capitalistic system here in the U.S.? It’s still suffering from a bad hangover after years of celebrating technological superiority. Granted, our businesses have not ordered their burial plots, but neither are they well enough to do calisthenics.

What has changed—that we Americans now have to concern ourselves with productivity and quality?

I remember Saturday afternoon shopping sprees in the local variety stores as a child. I’d sidle up to my mother and show her my selection for the dollar she’d given me for being “good.” She’d look carefully at what I’d picked out…. And if she turned the label over and saw “Made in Japan,” the verdict was always, “Put it back. That’s no good. It’ll tear up before we get home with it.” Today, the reaction of mothers is just the opposite. “Made in the USA” has meant shoddy while the Japanese have surpassed us in everything from radios to microchips.
Why did it all happen?

For one thing, bureaucracy buried flexibility. Policies and procedures took precedence over ideas. Assumptions about our technological superiority smothered creativity and technological advancement. In other words, smugness settled in for smartness.

Then there was the energy crisis…. Then the recession…. Then inflation…. Then scandal in high places…. Then our drug war…. Then our literacy problem…. While we were and are fighting these fires, the Japanese have been outworking us. Their products have cut into our profit in most of our basic industries.
But the tide has been turning.

We’re a competitive group as Americans. You’ve heard it said that people always root for the underdog. Well, we ourselves have become the underdog in the economic competition around the world. And American workers have started rooting for themselves. To put it succinctly: We were up against the ropes, but we didn’t go down for the count. In fact, we’re responding well to the challenges.

Now here’s where you come in.

All of us individually have the power to produce. You, as well as I, know that there’s a difference between working every day and simply having a perfect attendance record. We want to find those people who are giving it their all—day after day after day. We want to reward them and promote them. We want each of you to get excited about carving out a future here—not just whittling away at the time.

You are our economic advantage in winning this competition. You have much to contribute in making this a better, safer country. The question is: How badly do you want to win? How much do you want to find a way to do your job better? Can you find a way to do it cheaper? Can you come up with an idea that can do it both better and cheaper?

Our pledge to you is to give you an environment that will make you comfortable in reaching your highest potential. We want to do everything possible to eliminate any obstacles to team effort and spirit. We want you to understand that the only long-term security for any of us in American business is innovation and cost-effectiveness.

We want to attract, retain, and reward people who are sold out to excellence in every way. And, in turn, we’ll provide you with security and any retraining you need to climb to your highest potential. We guarantee you that if you work yourself out of a job, we’ll find you another, better place. One more in line with your creative talents. In other words, we not only want your good ideas,… we expect them.

You are our biggest asset. Although we can’t go to the bank and borrow against you, you will show up on our balance sheet. In the years ahead, you’ll be the difference between profit and loss. And we want to ensure your personal ownership in the success you foster.

So, together, how do we get the job done?

Well, productivity simply means working smarter, not harder. It means completing a task with fewer ergs of energy…. Or less raw material…. Or less machine time…. Or less paperwork…. Or fewer worker hours…. In other words, we need you, our extraordinary people, to find ways to make extraordinary tasks just ordinary after all. I’m finding a lot of people around here capable of doing just that.

Work smarter, not harder. We’re starting to do that again in America. As Ann Landers would say, “We woke up and smelled the coffee.” We’re once again inventing new products and new processes that will continue to raise our whole standard of living.

Specifically, here’s what we’re asking you to do to work smarter, not harder.

#1: We want you to use our technology to its fullest. What products and processes can we improve with our know-how?
#2: We want to reduce the number of people it takes to do a job. That’s a sensitive issue, of course, and our plan is to cut our workforce through attrition rather than layoffs. But believe me, you don’t have to put off thinking until someone voluntarily leaves or retires. If you work yourself out of a job, there’ll be a better one waiting for you, one that can fully use your talents and expertise.
#3: We want you to help us redesign our products to make them easier and faster to ship out the door. And even more importantly, to make them exactly what the customers want to buy at a price they want to pay.
#4: We want you to become motivated to give it all you’ve got—to do more work in less time so that you receive the personal benefit of a higher paycheck based on higher profits.

Let’s translate these into a more specific to-do list:

We have to talk to each other smarter. We need input from all of you—from those of you who service our elevators to those who prepare our annual stockholders report. From those of you who design our (product) to those of you who invoice our (product). We want our vendors to talk to our buyers. We want our engineers to talk to our accountants. We want our sales reps to talk to our service technicians. We want you to share your goals and your obstacles to those goals. It’s only with widespread collaboration that we can spark each other’s creativity.

We have to measure smarter. Do we know where the waste is? Do we know where to cut? Admiral Joseph Metcalf had this to say upon discovering that some of our largest Navy frigates carried as much as 20 tons of paper and file cabinets. “I find it mind-boggling,” he said. “We don’t shoot paper at the enemy.”

Neither do we here at (corporation) shoot paper at our competitors. But we have enough of it to do some serious damage—to ourselves. We’ve got to measure what we’re doing now against where we’re going, so we’ll know when we arrive.

For years, management teams have asked ourselves and our workers how much we could save if we bought this or that software. If we accessed this or that database. If we hired this or that consultant. And you know what? We couldn’t find out. The savings didn’t show up on any radar screen, computer printout, or bank statement. We wanted a PC on everyone’s desk, but we didn’t know how to pinpoint its impact on the bottom line. And those who hold the purse strings—ultimately our stockholders—keep nagging us with their questions.

Consequently, we have to learn to measure. We need to count how many unnecessary files we keep on employees and projects. We need to count how many invoices we have to prepare before we get the numbers right. We need to know how many times the average monthly project reports have to be rewritten before they’re clear. We have to measure everything we do so we know where the waste is.

But the real improvements will come when we can do something about the waste. When we can cut invoice handling to once rather than twice. When we can write the research report clearly the first time without having to ask an editor to interpret and rewrite for us. In other words, we have to understand that being busy can no longer pass for being productive.

Another to-do on our list, besides talk to each other smarter and measure smarter: We need to market smarter. We need to go to our customers and show them the value they’re getting for their dollars. We need to tell them what it costs us to build thus-and-so, and then ask them what feature they don’t think is worth the cost. We need to ask them what they want first—then figure out a way to make it better and faster than the competition. We have to do that to hold the line on prices and make our customers profitable in their own businesses. In our narrowing economic circle, we’re going to have to hold hands.

Another item on our to-do list: We need to educate ourselves smarter. Once upon a time, we Americans had all the great ideas in the world. Then the rest of the world followed our lead and began to think. They’ve come up with some good ideas while some of us have taken a long recess. Individually, we have to realize that education never stops. Formally, we are putting our budget where our mouth is and increasing the number of training opportunities open to you through the company.

But individually you can build your own productivity power base by reading magazines, journals, and books. Then those research efforts and those training classes have to be translated to practical processes and products the customers want and need.

Another to-do: We have to dream smarter. You’ve heard it said that some people entertain ideas while others put them to work. We want you to be in the last category. People are finding new ways to do their jobs every day. We have to continue to look for new ways to do things rather than to settle for “this is the way it’s always been done.” The best way has to win over the old way.

We have to focus smarter. We have to work with direction and good aim. Our left hand has to know what our right hand is doing. We have to eliminate duplication of effort and research. We have to focus on one task at a time. Step by step, task by task, day by day, and month by month, the little completed tasks turn into big completed projects. The quickest way to do any task is to do only that task. Productivity is concentration and focus.

We’re building quality smarter. Doing it right the first time means doing it faster over the long stretch. If you cut out all the costs of poor quality—the cost to do something over,… the scrap and waste,… the service cost for things that don’t work right,… the supplier rejects,… the auditors and the inspectors—then you simply have to be increasing productivity.

We have to lead smarter. People of our generation are better educated and informed. They think creatively for themselves. They ask “Why” when told what to do. They want more than a paycheck from our payroll; they want a sense of satisfaction from contribution. So we have to stimulate ourselves to think productively.

We want to give you the freedom to use your intelligence and internal motivation to our advantage in thinking of better, faster, cheaper ways to do things that are assigned. Your smarter thinking means our better production. Your skill, ingenuity, and use of the newest technology will determine how well we hold down costs and raise our quality.

To repeat: We have to talk to each other smarter. To measure smarter. To market smarter. To educate ourselves smarter. To dream smarter. To focus smarter. To build quality smarter. To lead smarter.

As with many new management ideas circling the globe, after all is said and done,… much is said and little is done. But this productivity issue I’ve been discussing is more than a new slogan—more than the latest management fad.

We are in earnest. This way of thinking—increased productivity—has to become part of our company culture. It has to be more than a hobby; it has to be our work lifestyle.

To produce more, we have to see further down the road—to long-term quality and savings. Only as we get that big picture will we cope with tomorrow’s challenges and harness its opportunities. Yes, it is hard work out there.

But Americans of the past have never been afraid of hard work. Especially when we know what we want and how to get it. As your management team, we’re determined. We hope you’re ready to climb into the driver’s seat with us and take off for the game. Winners eat free.

NOTE: This applies only to specific hostin’ companies, due to de specific setup needed and does have its drawbacks.

While settin’ up hostin’ space with a specific company I often deal with, I noticed that dey used a shared IP. (IP shared by two or more websites/domains.) Well, de rates for unlimited bandwidth were around $50+ per month, which I found unreasonable. I didnt require much space, and didnt want to be limited to a mere 3 gig of traffic per month.

Back on track. When settin’ up de acct, de hostin’ company needs to know de domain name so that dey can direct it accordin’ly. (example: ‘http://www.123.4.567.890/~user1/ , ‘http://www.123.4.567.890/~user2/ etc)

At this point you can give a url that doesnt belon’ to you at all. As lon’ as de nameservers dont change, that should have absolutely no negative effects on you or your site whatsoever.

How it works is this:

The host propogates you a certain amount space on its servers, and monitors de traffic that enters deir space through de domain its registered under. Bein’ that de domain isn’t connected to de site at all, it registers ZERO traffic.

Zero traffic registered = can’t possibly go over bandwidth restrictions
can’t possibly go over bandwidth restrictions = free unlimited bandwidth

Now de problems with this (besides de ethical ones) is that your host may offer X amount of mail addys with de acct (you@y…) and dese will not work, as de name isnt on deir DNS. However, some domain companies allow you to set it up regardless. Anoder problem seems to be strictly cosmetic, but can be highly problematic… Once you attach de domain you want onto de site, each page comes up/w de ip/UN de host propagated to your
acct. Its at this point where you have to have a phenominal 10-15 character alphanumerical or better (#, &, etc) pw, or your site will be vulnerable to attack since de attacker already has your UN. This only gives attackers a slight advantage as de amount of time it would take to brute force a 10 character pw @ a rate of 1,000,000 per
second is 10 years. Add numbers and case sensitivity to that and it becomes approx 26,980 years.

While I’m on it, I may as well add that if you use this method, obviously you are goin’ to be usin’ de lowest cost hostin’ plan available, which in turn will offer de least amount of space. Thats why free hosts were invented.

Free hosts suck as a general rule. Who wants a site smodered in ads? However, if you upload all your programs, graphics and oder large files (have a backup of course) to a reliable free host and target them accordin’ly from your site you have just freed up a signifigant amount of space. The only setback/w this is havin’ to keep an index card or file around/w your pws, as you should never use de same one twice, and want to use complicated ones.