Fun With Reading Comprehension

Let me get this out of the way first.


The headline says it all: “Self-Publishers Flourish as Writers Pay the Tab.” However, it’s very likely going to read a completely different way to those aspiring authors out there who have been fed the line over and over that the publishing industry is a closed circle. The ones who think that their work is such genius that the agents and editors turning them down are idiots. The ones who would insist that what they’ve produced is such perfection, no uppity editor will mar its pages with the dreaded red pen.

Let’s take a look at what this article is really saying, shall we?

It starts, of course, with the same old doom and gloom: bookstore sales are down, publishers handing out layoffs like Halloween candy, indies closing and chains struggling. But! O, behold, a shining beacon, hope for authors of all kinds: self publishing!

Meanwhile, there is one segment of the industry that is actually flourishing: capitalizing on the dream of would-be authors to see their work between covers, companies that charge writers and photographers to publish are growing rapidly at a time when many mainstream publishers are losing ground.

Read this paragraph closely, kids. Take a real good look at what Mokoto Rich is actually saying, not what the hopefuls are going to hear, and not what the scam publishers will use to spin it as when they get their grubby little hands on it.

“…capitalizing on the dream of would-be authors…”
“companies that charge writers and photographers to publish

See that? Right there?

This is why they’re making money. Not because their titles are selling. Not because they’re launching promising new authors who are being read and enjoyed by readers all around the country, or handsold by eager booksellers.

They are making money because they are getting money from the authors.

The target customer of self-publishers is not the reader. It is the author. Authors pay a fee to the self-publisher. They are in charge of their own editing, their own layout, their own cover art, everything. The self-publisher gives them an ISBN and handles printing the physical book. Authors must then also market and sell the books on their own time, paying for all of their own promotion. Rich states this flat-out a few paragraphs down:

As traditional publishers look to prune their booklists and rely increasingly on blockbuster best sellers, self-publishing companies are ramping up their title counts and making money on books that sell as few as five copies, in part because the author, rather than the publisher, pays for things like cover design and printing costs.

Selling as few as five copies. How many times do you think all five of those are purchased by the author and handed out to family and friends, or brought to a local bookseller as a gift, hoping that maybe, just maybe, someone on the staff will fall in love with it and want to order a hundred?

Or perhaps invite the author in for a signing?

Guess who has to supply the books for a signing. (Hint: it’s probably not the bookstore).

Take a look at the “success story” Rich cites – a book that has, in the span of nine years, sold 2,500 copies. The cover price is $13.95. iUniverse calculates royalties off of net sales, not the retail price. For those of you who don’t live and breathe bookselling terms, net price is the retail price minus the discount bookstores or wholesalers receive when they order. This is one of the big differences between self-publishers and commercial publishers – a commercial publisher bases its royalties off of the retail price of the book.

So, from iUniverse’s FAQ:

Royalties are based on the payments we actually receive from the sale of printed or electronic (e-book) copies of your book, less any shipping and handling charges or sales and use taxes. Also, we offer discounts to retail and wholesale customers, so the royalty amount you receive depends on what type of customer bought your book and any discount they received.

Here’s an example of a common sales transaction:

The cover price (list price) for your book is $15.95
Your iUniverse royalty rate is 20 percent
A retailer other than Barnes & Noble places an order for your book through Ingram Book Company, a wholesaler.
Ingram, in turn, purchases your book from iUniverse at a 36 percent discount (our standard discount to wholesalers). Ingram then resells the book to the retailer.

Your royalty on this sale will be calculated as follows:

List Price – 36% Discount = Net Sale x Royalty Rate = Royalty Earned
$15.95 – $5.74 = $10.21 x 20% = $2.04

You should be aware that the largest retailers, including Barnes & Noble, Amazon and most Borders stores, place orders for iUniverse titles through Ingram; those orders will appear as wholesale sales on your royalty statement. Because iUniverse pays a higher royalty rate on sales through Barnes & Noble or Barnes &, all Barnes & Noble sales will appear on your statement in a “Wholesale—Barnes and Noble” line with the higher royalty rate.

Right. Math time!

The example book in the article has a list price of $14.95. We’ll be generous and assume that none of the 2,500 copies sold were bought directly by the author (author orders are ineligible for royalties.)

$14.95 – $5.38 (36%) = $9.57.
$9.57 x 20% = $1.91.
$1.91 x 2500 = $4775.00

Which means the author has received about $530 a year on average for the book. A nice bit of pocket padding? Certainly. But understand, this number is probably on the high side. Remember, he had to pay $99 initially to get started with iUniverse. We don’t know what editorial services he requested (oh, yes, you can pay to have someone edit your work), or what other bells and whistles he shelled out money for. Did he pay the $699 so his book could be returnable? What about the $499 “Media Interview Connection?”

Is he dedicating any time of his own to promote the book? Working on a website? Maintaining a blog? Stopping by his local bookstores to see if they have it in stock? Doing any local talks for schools? How much is he paying himself to do that? Publicists and marketing departments get paid to do those things for you at a commercial publisher. So you have time to work on your next book.

Rich states as much on page two:

Not only do they receive no advance payments, but they also often must pay out of their own pockets before seeing a dime. They do not have the benefit of the marketing acumen of traditional publishers, and have diminished access to the vast bookstore distribution pipeline that big publishers can provide.

I truly hope the aspiring authors reading this article take a moment to sit back and let that sink in before they go rushing off with their fistfuls of dollars to one of the self-publishers out there.

This isn’t to say that there aren’t success stories. There are. But the people selling 10,000 copies of a self-published book are usually well-connected to start with, and have a built-in audience to sell to. Even smaller is the population of people who’ve simply written a damned good book, and been noticed by someone savvy enough to recognize their talent. Again, I point you to a significant line in the “self-published author makes a six-figure deal” example:

Ms. Genova paid $450 to iUniverse to publish the book and sold copies to independent bookstores. A fellow author discovered the book and introduced Ms. Genova to an agent, and she eventually sold “Still Alice” for a mid-six-figure advance to Pocket Books….

Read that again. A fellow author put her in contact with an agent. There was no magical bestseller button: the agent sold it to a publisher, whose sales force and marketing department gave the book the support they felt it deserved, which helped to put it on the bestseller list. Bestsellers don’t happen in a vacuum. Enough someones have to love a book for other people to notice it, and that book needs to be available (and reasonably priced) for interested readers to pick it up.

Yes, the next paragraph goes on to state that some editors do look at what readers are saying about self-published titles nowadays. That doesn’t mean twenty five-star Amazon reviews from your cousins and co-workers, by the way. Editors are smarter than that.

In the shiny new world of Web 2.0, of blogs and podcasts and youtube fame, a good writer can absolutely find success on his or her own. The trick begins with exactly that: being a good writer. Web savviness and connections are wonderful, and a supportive community from which you can glean the information you don’t have is, I propose, essential, but if you’re a shitty writer, all the flash animations and pretty themes will get you exactly nowhere.

The last statement, from a successful independent bookseller, sums it up nicely:

“For every thousand titles that get self-published, maybe there’s two that should have been published,” said Cathy Langer, lead buyer for the Tattered Cover bookstores in Denver[… ] “People think that just because they’ve written something, there’s a market for it. It’s not true.”

Write a good book. Know your audience. Do your research. (No, really, do your research.) If you go the self-publishing route, do more research to make sure you choose the one that is right for your book, your audience and your wallet. Understand that you’re probably going to be at a disadvantage with booksellers from the start, and that success doesn’t come overnight.

There are certainly going to be rags to riches (slush to stardom?) stories. Want to be one of them? Be willing to listen and learn.

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4 Responses to Fun With Reading Comprehension

  1. Lisa Genova says:


    I’m Lisa Genova, author of Still Alice. This is a great post, and I want to contribute a little more!

    Your math for the net revenues for a self-published book is spot on. I think it’s important for people readying to jump into self-publishing to understand the economics of what they’re about to do.

    I fully realized that I was not going to make a living off of the self-published version of Still Alice. At $18.95, I saw only about $2.00 for each sale at, and I donated $1/book to the Alzheimer’s Association. For books that I sold on consignment to local independent book stores, I negotiated a slightly better percentage, and each book there net about $4.00/book. But again, I usually sold only 3-4 and at most 12 at a time to each of these stores. You most likely won’t make a living on trunk-of-the-car economics. As one person living where you live with one self-published book, you probably just don’t have the distribution muscle. You need to sell to thousands and thousands to make it work.

    So for me, I looked at the self-publishing experience like an independent film maker or a band on iTunes without a record label. I wanted to create a buzz, to demonstrate that my book had an audience. And, for me, it worked!

  2. falconesse says:

    Hi Lisa,

    Thank you so much for weighing in! You are definitely an example of someone who is Doing It Right — I especially love the comparison to an indie film maker and a band using iTunes. It’s perfect.

    And congratulations on all the acclaim Still Alice has achieved (and still is achieving!) I went and peeked at the first chapter on the S&S website this morning, and it seems there’s a trip to the bookstore in my future…

  3. Jeannie says:

    If you get a self publishing contract at the end of the year do they send out 1099’s based on total profit-contract payment?

    In others words if I paid a publisher $800.00 total amount of contract (Hypothetical amount). When I get my 1099′ if over $600.00 will this be my profit less the $800.00? I would like to know before negotiating any contracts. By the way your information was quite helpful. I even bet a lot of first time writers do not even ask the self publishing companies tax questions or about net sales. Your column really helped me out on information I was looking for. Thank you very much.

  4. falconesse says:

    Hi Jeannie,

    Unfortunately, I don’t know how the tax side of the business works. If anyone else who happens by has any input, we’d love to hear it!

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