Let’s rip this band-aid off… Most authors never make money off their books. However, with a little education and hard work you can be an author who makes money. The biggest thing to understand is publishing matters when you look at how you and your book will make money.
Let’s take a quick look at the pros and cons of publishing your book.
The biggest difference between traditional and self-publishing is how a book is funded. With self-publishing, an author finances all areas of their book. However, when you self-publish you receive more money from your sales. Besides the money needed to work with the professionals to publish your book, you will see two areas where you will have expenses which will impact your profits.
First off is your book’s printing costs. There are many variables which affect your book’s printing costs such as page total, trim size, color photos, cover type, etc. Before you finalize your book’s price be sure you understand the cost to print.
Secondly, you will have some fees paid to distributors or retailers who sell your book. Most bookstores will purchase discount instead of actual payment. For example Amazon requires a 55% discount of your list price. If your book retails at $20.00, Amazon will receive an $11.00 discount and you will receive $9.00 in your pocket.
Now keep in mind this amount is always taken off of the list price and is applied before printing costs, so if your book retails for $20.00 and Amazon takes their cut, you will be left with $9.00 minus the printing cost. So if it costs $5.00 to print your book, you end up with a grand total of $4.00 profit.
If you sell your book yourself, say at a conference you won’t have to take the retailer’s discount into consideration, but you will incur the cost of printing your hard or softcover book.
Traditional publishers pay you differently but the most common process is as follows. A traditional publisher picks up your story and you are given an advance or signing bonus before the book is published. Then, once books begin to sell, you are issued royalty checks.
One thing to understand is most of these contracts are set up where your advance comes out of your royalty checks so if you received a $1,000 bonus then you won’t receive a royalty check until your royalties eclipse $1,000.
These royalties might be small; the publishers need to make money and you may need to compensate people like agents or editors which further cuts into your royalties.
What Does This Mean?
Each author needs to evaluate their owns needs and what is best for their book before they decide which way to publish. There are a number of other factors besides compensation which should be weighed as well.
The most important thing we want to highlight is that your book is a business. In order to make money you need to sell your book. Think of your book like a new product from P&G. If they release a new Tide product they tell everyone they can about the product and guide them to purchase it over another brand.
You need to treat your book the same. How can you tell as many people as you can about you and your book? How can you create loyal, returning fans and readers? There is no one-size-fits-all solution but understand, the best way to make money is to sell a lot of books. So, can you sell five books to your neighbors? Sure, but a better use of your efforts would be to find a conference to speak in front of 2, 3, 500-plus people where you can sell 100 or more books or land gigs on podcasts where you can share your story with potentially thousands and save time and money on travel and other expenses.
How can you treat your book like a business? We have recently started a new Facebook group, Making Your Book Your Business where authors, writers, and others can share their own successes and challenges and where we can help each other grow.