Chapter Two
What Do I Gain by Publishing eBooks?
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.
http://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" 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