(Third in a series of articles about the new realities for writers and readers. In this post, I attempt to compare the relative costs and potential profits of self-publishing versus traditional publishing, and explain which method of self-publication I have chosen for my next novel, The Whole Clove Diet – and why I have chosen it.) (Of course, none of us is really interested in making money from our writing, right? We are only interested in making art. ♬ )

It seems as though every time I go onto the Internet these days, I stumble over another post in which some author is enthusing over how much more he or she is making per copy on a self-published book (70% of the cover price or more) than he or she would have made with an established press (where a 10 to 15% royalty is the norm). Somewhere on The Militant Writer, I may even have crowed about this advantage of self-publishing myself. :)

While such statements may be accurate in absolute terms, they fail to take into account many of the costs outside of printing that are incurred by traditional publishers on behalf of authors’ books. Some established presses invest more than others (and some seem to invest next to nothing) in such make-or-break areas of book production as editing, cover and layout design, and promotion and marketing, but whether they are effective or not at what they do, publishers incur overhead costs with each title.

Many of these same costs are also incurred by self-published authors—or should be—but the authors may overlook them when they are calculating their final “take” from sales.

Self-published authors who fail to make their books look and read like something besides draft manuscripts that have been laid out at home and then slapped with amateur-looking covers are (in my opinion) fools. However, as soon as we start putting money into improving the quality and impact of our self-published books, the longer it takes for us to recoup the money we’ve invested. We cannot claim we are “making 70% of the cover price” of our books until we have paid ourselves back for our expenditures to produce them.

The biggest financial difference between having a book published by a traditional press and doing it ourselves is who pays the overhead, what the overhead entails, and how the proceeds are shared. In this post, I am going to take a stab at evaluating the relative costs of self-publishing versus traditional publishing, but keep in mind that attempting to compare the two approaches can be like weighing “apples” against “all citrus fruits,” due to the variety of publishing models that have begun to proliferate.

I encourage readers of this post who have self-published (aka “indie-published”) their books, participated in shared-expense publishing initiatives, or have info about traditional publishing that I may have overlooked here, to contribute to the comments section of this discussion.

No Money Down: Working With Traditional Publishers

When a traditional publisher offers to publish your book, you do not need to contribute any money. By inviting you to give them the publishing rights to your book, publishers are essentially saying that they believe that they are going to sell enough copies of your book to make up for the costs they will incur up front in order to get it to the marketplace – and then, they hope, make a profit by selling even more.

The costs traditional publishers incur are outlined in my “Authors and Publishers” post and they include:

• copyediting and substantive editing
• book interior design
• cover design
• layout
• printing
• promotion
• sales
• distribution
• storage
• overhead costs – these range from the rent, utilities, etc. that are part of the costs of maintaining an office and a staff (including executive editors who will read your manuscript in the first place—or pay someone to send you a form rejection letter—salespeople who go out to bookstores to talk up your book, promotions staff, art department staff, bookkeepers, shipping and receiving staff), operating a warehouse, paying the fees of freelancers, selling other (foreign, movie) rights to your book, legal, financial and accounting costs, costs associated with creating a catalogue, posters and other promotional materials, securing ISBNs and Books in Print notifications, etc., etc., etc.

If a press publishes 20 books a year and its annual expenses are $1 million, one could argue that each book costs the company around $50,000. Of course this is a vast oversimplification because books that were published in previous years that sell this year bring in income that helps to sustain the business, operating grants may be involved, or subsidies from institutions such as universities, funding may have been secured to help with marketing and promotion, and there are many other factors that need to be considered. So let us say that the cost of producing 5,000 copies of your book is $20,000.

Let us also say that the book thus created is going to sell for $20.

In that case, on each book:

• You, the author, will receive about $3 (depending on royalty rates that are set out in your contract);
• The booksellers will keep about 40% of the amount they receive for the books they sell, or $8;
• The publisher will retain the remaining $9.

As you have already figured out, these numbers show that in order to pay itself back for the costs it has incurred, the publisher needs to sell nearly 2,500 copies of your book— half of the stock it printed – just to break even. Even after that, additional promotion, storage of unsold books, and other costs are going to need to be deducted from the publishers’ portion of the income from each book.

In this scenario, the author starts to make his or her paltry $3/copy from the first copy that is sold – although the author’s actual receipt of those $3 pieces is subject to such factors as:

• Advances: The amount that has been advanced to you by the publisher must be reached before you will receive any more money. If the publisher advanced you $3,000 in our example, for example, since you are making $3/book you will not start earning any more money from royalties until after 1,000 copies of your book have sold;
• Agents: If you have an agent, he or she will receive a cut of your take: let us say 15% of $3 =  45 cents, leaving you with $2.55. (This is why agents are only interested in working with writers who have the potential to sell a lot of books.);
• Returns: The traditional book business is unlike almost any other business in that bookstores can return the products (books) they do not sell to the manufacturers (publishers). Your book is not sold when it is stocked by a bookseller, but only when it is purchased from the bookseller.

Costs to Self-Publish

The costs of self-publishing, by contrast, are entirely dependent on who the writer deals with, and what costs beyond book production (e-book and/or print version) he or she chooses to incur.

The Rip-Off Artists

Let us dispense first with the companies that advertise on-line that even though they accept every book that is submitted to them, they are still traditional publishers because they will give you an advance and publish your book at no cost to you. Closer examination of these companies (and reviews from those who’ve used them) indicate that the advances are minimal ($50 or so), the printed copies are expensive (e.g., $20 to $25 or more), the “publishers” often do not make any real effort to get the books into major sales outlets (including onto Amazon), there is no e-book option, and the major thrust of such companies is to hard-sell copies to the authors. (In one contract I read on-line, the company assures authors that review copies will be distributed, but only to reviewers who write to the company asking for a copy of your book. How many independent, respected reviewers do you think you can convince to write to your publisher and ask them for a book? It isn’t going to happen.)

Similar methods were used by what is known as “vanity” presses in the past: they offered you “free publishing” as long as you agreed to buy 1,000 copies of the finished book, which of course you would then need to sell yourself. People invested huge amounts of money in such scams and ended up with hundreds and hundreds of copies of unsellable books in their basements. In this era of print-on-demand, you don’t need to buy all those copies up front, but the principle is the same: the only entity that makes any money off such ventures is the “publishing” company.

Some other companies have recently been created that are in the e-books-only business. They also offer publication at no cost to you, but they spend almost nothing anyway: all they really do is pour your text into a file, slap a cover image on it, and then put the book up on the Internet. No real editing, no significant effort to market your book, no real investment on their part. They then stand back and simply take a cut of whatever sales you are able to drum up.

Check the fine print in the contract with any self-publishing enterprise as closely as you would (or should) with any other venture in which you have chosen to participate. If it sounds too good to be true, it probably is. Ask to see what the publisher is prepared to do to help promote your book (and then make sure they do it), seriously consider the books it is already offering and determine whether you want to be associated with those books and authors, and Google to find if there are any negative comments about them from authors who have used them in the past. Keep in mind that the testimonials that appear on the “publisher” websites are those that have been pre-approved, and even their on-line forums may be censored to weed out negative feedback.

In other words, caveat emptor.

Bare Bones Self-Publishing

The lowest cost I have found to self-publish a book with a reputable company is $299. With this very basic option, the author provides all text pages and the cover in “camera-ready” PDF format so that the publishing outlet doesn’t need to do anything but assemble the book on a computer so that it is ready to be printed, one copy at a time (known as “print on demand,” or POD), whenever anyone orders it. An example of this basic service is the CreateSpace Author’s Express, and CreateSpace also offers a slightly enhanced version of its basic package that provides you with a template for the interior and the covers, and costs $499. It is called the Author’s Advantage.

(Note: I am using CreateSpace not only for my examples in this post but also for my book production because of that company’s close association with Amazon. A book produced by CreateSpace is not likely to encounter any problems entering Amazon’s distribution system. I know that Amazon has created a monopoly that is taking down all competitors, including lots of mom-and-pop bookstore operations, and I’m sorry. However, with my little novel I cannot afford to become a one-person protest movement any more than I already am: I need my book to be available everywhere, as soon as I publish it.)

The Cadillacs of Self-Publishing

At the opposite end of the spectrum, those who want to buy a publishing package that already includes all the bells and whistles, in the hope (probably erroneous, but who knows?) that they will need to do no work at all to make their books bestsellers, may choose an option like the Total Design Freedom Marketing Pro from CreateSpace, which sells for $4,999.

For this price, the author receives two rounds of copyediting, which CreateSpace estimates to be worth just over $1,000 per round, a custom-designed interior ($499) and custom book-cover design ($999), a video book trailer ($1,249), promotional-text creation ($249), assistance with the creation and distribution of a media release ($598), and registration for a Library of Congress Control Number (LCCN), which allows libraries to catalogue your book correctly if they buy it, but does not guarantee that they will buy it ($75). (This is a worthwhile investment, as far as I’m concerned.)

Options In Between

CreateSpace offers a variety of packages that range in cost between the Author’s Express and the Total Design Freedom Marketing Pro, and other companies (LuLu, for example. Update: Comment linked here says there are no costs at all with LuLu if you’re prepared to do all the work yourself) offer similar ranges of packages. These companies also offer a range of royalties on each copy sold, depending on the agreed-upon forms of distribution and other factors.

The various expenses and reimbursement options can be found on the companies’ websites, although sometimes you need to trade your email address for specific details. When you look at their charts and numbers and offerings of royalties, it is very important to remember that your profit does not begin until you have paid yourself back for what you have invested to get the book published.

Most writers will decide that there are some aspects of book production and promotion that they can do themselves, or that they want to hire people they know to carry out certain functions, and they will choose a publishing package that allows them to incorporate the options they have chosen to do independently with the services for which they require direct assistance. If you use outside services to complement the package you have purchased, the costs of these too need to be added into what you pay back to yourself before you can start to look at profits.

How Much Will You Make?

On this page at CreateSpace you can start to estimate the royalties you are going to make on the book you have created.

In order to compare your profit as a self-published writer to the model I set up to illustrate the disbursements to you by a traditional publisher, let us say your self-published book is also going to be marketed at $20 per copy. ($20 is quite a lot to charge for a POD book, because [at least at this point in the history of publishing] no matter what you do, the quality of a print-on-demand book is not going to match that of a book produced on an off-set printer running 500 to 2,000 copies at a time or more; however, for the sake of argument we will leave the price there so that comparison is possible.)

Let us say that this book is 120 pages in length, and the trim size is 5½ by 8½ inches. (Page count and trim size are important matters that you will need to take into consideration when you are publishing your book. So is paper weight, cover quality, etc.) The royalty that will accrue to you from this set-up if your book is sold on amazon.com (depending on various options you have chosen) is just over $8/copy. (The chart says you can make 50% more if you set up your own e-store with Amazon, but I haven’t even considered that: I could be wrong, but it sounds like a lot of work.)

If you have chosen the basic package from CreateSpace ($299), at $8 a piece, you will need to sell 38 copies of your book before you will start to earn any income from it. If you have purchased any additional services, from typesetting to cover design to marketing, either from CreateSpace or individual suppliers, you will need to add those amounts to the $299 before you can start counting profits. And if you went with the Total Design Freedom Marketing Pro from CreateSpace at nearly $5,000,  you will need to sell 625 copies before you start to see a profit.

The Whole Clove Diet: The Option I Am Choosing – And Why

I don’t want to spend any more than I need to on bringing my new novel, The Whole Clove Diet, to market. However, I want to be proud of how it looks because I think it’s a good novel (funny, and other good things as well), and I spent a lot of time writing it. I have also paid to have it edited, and I want it to look professionally produced so I can market it with confidence.

My experience as editor-in-chief at a publishing company, and work I’ve done since as a freelance production manager of books, newsletters and other publications, have taught me that it is not a wise investment of my time to even try to typeset my own book. Typesetting requires specific skills, knowledge and experience in order to ensure that pages look professional and avoid common errors (such as widows and orphans—do you even know what those are?) that instantly tell the reader that a book is self-published.

I believe that the price offered by CreateSpace to typeset books is reasonable, so I am going to use them for the typesetting part of the production. I will work with them to decide how the typesetting should look (what font, what the running head will look like, etc.), but they will do the work.

I also know I am incapable of creating my own book cover, although I want to have a lot of input into what that looks like, too. I have worked with a book cover designer in the past (Jeff Fielder) and I want to work with him again, so I am going to pay him to provide a custom cover for my book, which he will submit to CreateSpace in the format they require. Hiring an artist/designer for a book can run anywhere from about $500 and up, depending on the experience, knowledge and reputation of the designer and what you want him or her to do. (CreateSpace offers this service at $999 if you buy it from them.) You may also need to pay for cover art or photographs that are included in the cover.

I’ve paid my editors, and I am going to pay for my own marketing, including promotional copy, a video trailer (if I decide to use one), sending out review copies, and other promotional activities. Some of these tasks I will do myself; for others, I will hire other people.

I am therefore choosing a package offered by CreateSpace for $499 in which they will do the typesetting, and I will be responsible for the rest. I will send them the edited text in a Word document, and the cover I have had designed by my friend. They will do the layout, send me a proof to check over, and then make the book available for sale in both Kindle and POD formats. (Kindle conversion is normally $69 but I took advantage of a special offer from Amazon that was available when I placed the order for my book.) I have paid an additional $75 to obtain an LCCN.

Note in all cases that there is an extra charge for illustrations, photos, charts and other visuals included in the book.

Other Options Besides Self-Publishing

In addition to straightforward self-publishing packages, a host of other publishing models are now available, thanks to the opportunities for POD and e-books that are offered by the new digital technologies.

A number of collective approaches to publishing are out there, for example. Some, such as ShelfStealers which is the brainstorm of my friend Sheryl Dunn and her colleagues, have a strict editorial process that ensures the quality of books they are publishing.  The company does the cover design, layout and some of the promotion, and offers authors 50% gross royalties on audio and e-books, and 50% of net on print books less the cost of book (approximately $5.50 each).

Other coop companies involve authors to a greater or lesser extent in the publishing process, and royalties are related to the contribution the author makes. There is certainly something to be said for publishing as part of a collective—a group of books is better able to attract attention than a single book, and it is often easier to promote someone else’s book or a group of books of which yours is a part than it is to promote your own book. These collectives do not necessarily make you eligible for consideration in awards programs or by writers organizations, reviewers or bookstores who require “traditional publishing” status before they will even consider you or your book, so be sure you know what benefits you will gain from participating in such cooperatives, and how much time and energy you will need to invest, before you sign anything. There are lots of writers in this world who no longer have time to write because of commitments they’ve made to help get other people published.

In order to stay in business, some established publishers are also now offering co-publishing agreements to writers. The publishers do the same things they have always done for the books they publish (editorial, layout, design, distribution, etc.), but the authors contribute several thousands of dollars up-front to the overhead, and their royalties reflect the fact that they are essentially co-publishers. The authors get the cachet of the publisher’s imprint, but this can be an even more expensive alternative than self-publishing.

Reprinting Your Out-of-Print Books

For the information of those who are considering self-publishing books that have gone out of print – here is my experience.

I had my novel The Woman Upstairs, which was well reviewed and won an award for excellence in writing but had been out of print for twenty years, reprinted by CreateSpace. Since I didn’t own the rights to the original cover or its artwork, and I wanted to revise the cover text, I had new cover made and paid for that separately.

I paid $191 to have the book scanned (5 ½ x 8 ½ in., approx. 120 pages) by CreateSpace. I paid $69 for Kindle Conversion. I needed to pay an additional $50 because I changed the copyright page to reflect the new ISBN, my current name, the LCCN, etc. I also paid $75 for the LCCN.

So for less than $800, my first novel is now available in both print-on-demand and e-book formats. Now all I have to do is sell about 160 copies to recoup my costs. :)

Note: If the book that you want to reprint—or create—is in a non-standard format or requires special layout or certain types of paper, such as poetry, children’s books or art books, some specialists are now making their services available to help you prepare your book for self-publication. Two examples that I know of are so far in these areas are Really Love Your Book in the U.K., and Blurb.

So there you have it — all I  know about the costs of publishing a book, and perhaps more than even you wanted to know. The time it took me to write this post would probably have been more profitably invested in moving The Whole Clove Diet closer to being ready to submit to CreateSpace. But since I am investigating these issues for my own purposes anyway, I figure I might as well share what I find out. I hope you will find something of use here — and please do add your own experiences with publishing by way of comments, for the benefit of others. (Update: Note the positive feedback re: Lightning Source in the comments.)