Category: business

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2019 Income Sources

I occasionally see authors arguing about what channels to sell through and how to structure their business. I frequently say that I don’t consult. I don’t rely on affiliate or speaking fees. My whole career is built on writing books and getting them in front of readers.

Accomplishing that means making the books available in all possible channels.

Here’s where my money comes from.

2019 income sources

For those who want a little more details, here’s the breakdown. (Numbers not exactly 100% due to rounding.)

  • 33.7% – Amazon KDP
  • 29.2% – Traditional Publishing
  • 12.32% – Direct Sales at tiltedwindmillpress.com
  • 7.0% – Patreon
  • 6.6% – Nonfiction Book Sponsorships
  • 5.1% – IngramSpark print distribution
  • 2.5% – Gumroad
  • 1.2% – direct sales at cons
  • 0.9% – Apple iBooks
  • 0.6% – Kobo
  • 0.4% – tip jar
  • 0.3% – draft2digital
  • 0.05% – Barnes & Noble

A couple minor sources of income aren’t included–I made about $200 on Amazon affiliate links from my site, and a whopping $6 on Kobo affiliate links. But here’s some rough conclusions.

Amazon is the Big Beast, but it’s not inviolate. It’s not even the majority.

Trad pub certainly sells a bunch through Amazon. Traditional publishers put even more effort into diversification than I do. I’m going to assume that they’re at least as successful as I am, and roughly one-third of my trad pub income comes through Amazon. This means Amazon backs roughly 42% of my income.

I use both IngramSpark and Amazon for print distribution, because IS reaches places Amazon can’t. Last December, someone in China bought both Prohibition Orcs stories via IS. I sell titles in countries I’d never heard of before, thanks to IS.

Direct ebook sales via my web site, Patreon, and book sponsorships combined make up about a quarter of my income. These are clearly worth continuing.

And yes, if you see me at a con, and you want a book, I’ll sell it to you. The income is negligible, but I use direct contact with folks to help build my readership.

You might look at Apple, Kobo, and draft2digital and say “Why bother?” That’s a fair question. The answer is, I want readers. When a reader is intrigued by an author, they go to their favorite bookstore and check out their titles. I want that reader to find my books when the whim hits them, because thirty seconds later they’ll have forgotten about me.

The tip jar is negligible, but costs me nothing to run, so I’ll keep it. It doesn’t encourage me to set up a kofi account, though.

What’s more effective than the tip jar is the “name your price” feature on tiltedwindmillpress.com, which allows folks to pay more than minimum price for a book. Sadly, the NYP plugin I use doesn’t have a feature to separate out how many buyers include extra, but I can say that I frequently see folks offer an extra few bucks. I appreciate every one of you.

Dear Barnes & Noble: please develop life signs. Thank you.

The general summary is: if I was to lose any one income source, I would survive. Losing a big one would be hard. My family relies on my income to pay bills. (My wife works, but if I don’t bring in real money I need to go find a job.)

I find these numbers reassuring. After five years as a full-time writer, I am completely unsuitable for employment.

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When To Buy Your Own ISBNs

In 2017, I bought a block of one thousand ISBNs. Other authors have been asking me why I did that and if they should do the same. I’m writing this blog post so I can point them at it. The short but glib answer is, when the missed opportunity cost of piggybacking on Amazon’s (previously CreateSpace’s) free ISBNs exceeds the expense of buying your own ISBNs.

But let’s break this down a little more.

Most indie authors don’t sell many books. If you have only one or two titles, don’t even think about getting your own ISBNs. Spend your money on editing your next book.

If your book does sell, chances are it only sells on Amazon. Amazon doesn’t care where an ISBN comes from. I imagine they’d happily ditch ISBNs, except for that pesky Expanded Distribution to the wider world of bookstores.

And that wider world of bookstores is where your own ISBNs come in.

If you are regularly making sales in Expanded Distribution, you’re selling print to the world outside Amazon. Those are the folks where ISBNs matter. The reason that they matter isn’t because they check your ISBN against a list of Amazon-owned ISBNs and refuse to buy. It’s because:

the owner of the ISBN controls where the book can be printed.

This is vital.

If your ISBN comes from Amazon, you can only get your book printed at Amazon.

If you own your ISBNs you can have your book printed anywhere. Use Amazon and IngramSpark alike. If a book really takes off and you need to do an actual print run, you can do that and slip those printed books into the supply chain with the same ISBN. Stores and readers don’t care who printed the book so long as it’s of reasonable quality and doesn’t fall apart as they’re reading it. (I’m looking at you, Robert Jordan.)

Your own print run might seem ambitious right now, but while the plan “I’m gonna sell a million copies a year” might not be realistic, the plan of “If I sell a million a year I want to do it in the least profitable way” is just plain daft. Just as you have a backup plan in case of failure, have a route open to maximize success.

So how did I make this calculation?

One, I was being directly contacted for bulk orders on books in locations I couldn’t serve. I could drop-ship books from CreateSpace US, but many of these orders came from overseas. And CreateSpace wouldn’t put customs paperwork on overseas shipments, so I’d have to have the books shipped to me, prepare the customs paperwork, and ship them over to Europe or Asia or wherever. The shipping costs on orders of even 20 books were prohibitive.

The cost of a lost opportunity.

Additionally, my Expanded Distribution sales were growing. ED pays about 40% of cover price on sales. IngramSpark lets you set your own rate, but “50% no returns” is perfectly acceptable. That’s an extra 20% on each unit sold.

I counted my annual sales through Expanded Distribution. I figured out how many ISBNs I needed to buy. I assumed that I’d get an extra 15% on each ED sale (because I’m pessimistic), and that sales would go they way they had for last few years (because I had to pick a value). Yes, these are fragile assumptions.

When the calculation showed that the increased proceeds from IngramSpark sales would pay for the whole block of ISBNs in about a year, and everything after that would be extra income, I bought my ISBNs.

How did I decide how many ISBNs to buy?

I averaged how many titles I publish in a year. Multiplied that by the number of writing years I hope to have left. The math said I’d need a little less than 300 ISBNs. As I’m in the US, it was cheaper to buy 1000 ISBNs than 300, because Bowker is milking the US ISBN market for every last penny.

So I bought 1000. (Before you ask, I can’t resell my extras.)

I am now done with the ISBN problem forever. FOREVER.

To my shock, the investment paid off in three months. My unit sales almost doubled. My books sell in places they never could reach before, mostly in Asia. I sell print books in Malaysia and India. Will that happen to you? Dunno. It won’t hurt your sales, though.

And I have enough to experiment with things like hardcover books. Which, to my surprise, sell. Even in Asia, where they’re not merely expensive but fiendishly expensive.

Once you have your own ISBNs, the real fun begins. You need to re-issue all existing titles under your own ISBNs, so that you can control the printing. This is vital. Someone that wants to order your book will look up the title in their online system and order it by ISBN. If you have one version of the book on Amazon with one ISBN, and the identical book with a different ISBN in IngramSpark, who knows what they’ll wind up ordering? Basic business says you must have a consistent product line. When two hundred people order your book, you don’t want them either getting two different products or, worse, half of them unable to get your book because it’s not available in their area under that ISBN.

This means you need to prepare for success.

Changing your ISBNs means changing your book interior. Adding IngramSpark as a printer means changing your cover.

Are you prepared to make those changes?

Yes, your cover and interior designers are professionals and would never screw you over. Maybe your designer is a dear friend or an award-winning master with a sterling reputation. But people get hit by busses, leave the field, or eaten by antelopes all the time. If nothing else, there’s retirement.

You need not only the finished product, but the source files for them as well. (Some designers will offer digital escrow services, which can be okay so long as it’s at their expense.) When the time comes for you to update fifty titles with your own ISBN, the last thing you want to have to do is redo the covers of your best-selling series because you can’t change shift the design as needed to match IngramSpark’s requirements. You want to have your designer or their successor open the original design, shift a couple items a millimeter or two, and be done.

Do the math now. Figure out how many you need and what the cost would be. Once you know the answer: forget about it until you hit those numbers. Put your energy and your worry on the thing that you can control: your craftsmanship and the amount of time you spend making words.

Because making words is how you get to have problems like needing your own ISBNs.

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Pricing Shifts between CreateSpace, IngramSpark, and KDP Print

The massive KDP Print Migration is underway, and I noticed pricing differences straight off. While they initially infuriated me, once I gathered all the data I became much more mellow.

I put my short stories (8,000-12,000 words) in print, primarily so that comparative pricing makes the ebook looks cheap. Maybe folks won’t pay $0.99 for a short story in ebook on its own, but they will pay $2.99 for that same ebook if there’s a print version for $5.99. I don’t expect anyone to buy my shorts in print; that’s not what they exist for. I consider those folks who do buy them hard-core fans, though, and I try to make them as nice as possible.

How do I price these? Well, if someone buys one of these stories I want to make at least a dollar. (Yes, that’s difficult for ebooks–Amazon, for example, gives a 35% royalty on prices under $2.99 and 70% at $2.99 or more. Figuring all books are priced at $X.99, I can make roughly $0.35, $0.70, or $2.)

Print books are a little easier, though. I feed PDFs into the system, let it compute print costs, and twiddle the retail price until I make just over $1.

With the CreateSpace shutdown, though, I’m really noticing pricing differences. Let’s look at the first short I converted.

Spilled MirovarThe first Prohibition Orcs story was priced at $5.99 in print via CreateSpace, for 100 5×8 pages of orcish bootlegging. That gave me a profit of $1.44; perfectly reasonable.

I fed that into IngramSpark, and was rewarded with a net of $0.61.

Whoah. Cue boiling blood.

Before I go all stabby, though, let’s gather all the information. For an apples-to-apples comparison, I’m setting the CreateSpace price of Spilled Mirovar to $6.99, same as KDP Print and IngramSpark. We really need to make two comparisons. CreateSpace’s Expanded Distribution (CSED) is analogous to IngramSpark, and CreateSpace’s Amazon service is migrating to KDP Print.

CreateSpace Expanded DistributionIngramSparkCreateSpace to AmazonKDP Print
US ($6.99 retail)$0.64$1.12$2.04$2.04
UK (£5.99 retail)n/a£0.96£1.97£1.89
EU (€5.99 retail)n/a€0.6€1.89€1.69

First off, it’s clear that IngramSpark smokes CSED–especially when you consider that CSED pays everything in US dollars.

It’s also clear that KDP Print’s European net is lower than CreateSpace’s.

This exposes a weakness in my “make at least a buck on a story” strategy. It sounds reasonable, but I never made a buck on CSED of short stories. I ignored CSED on these titles, because nobody was going to buy a stupid story about orcs bootlegging in 1927 Detroit. (I’m grateful to the people who proved me wrong.)

Once I impose that requirement on CSED/IngramSpark, everything gets more expensive. So while it initially looks damning, there’s no cause for outrage. Annoyance at losing margin on EU sales, yes.

The question is, what do I do with this information?

The obvious thing to do would be to price print books differently by channel, but online price-matching is rampant. The cheapest price I set in a currency is the real price I’ll be paid for. I’m not willing to give my work away.

My decision is, I’m not going to migrate most of the short stories to IngramSpark. My best-selling shorts will go on IngramSpark, but that’s it.

I’m still going to migrate everything to my ISBNs, because I want that control. Pricing will change, new channels will open, and with my own ISBNs on everything I will have the flexibility to take advantage of it. There’s a big comfortable difference between “finish this before an unknown deadline a few weeks from now, or else!” and “try to polish this off before 2019.”

What about larger books? Let’s check out my nerd cozy mystery git commit murder. While I should revisit the pricing in light of exchange rate changes, the comparison should still make sense.

CreateSpace Expanded DistributionIngramSparkCreateSpace to AmazonKDP Print
US ($14.99 retail)$2.00$3.16$5.00$5.01
UK (£11.99 retail)n/a£2.48£3.87£3.88
EU (€12.99 retail)n/a€2.38€4.65€4.06

The difference between CSED and IngramSpark really shines on larger books. I make a penny more in the UK, and less in the EU? Uh, okay, fine, I guess.

Before someone asks why I make more on novels than short stories, it’s because 1) they took longer to write, and 2) bookstores make their money based on the sale price. A bookstore won’t handle a book unless they can make a few bucks off it. A book like git commit murder or FreeBSD Mastery: Specialty Filesystems has a narrow audience, and cutting the price to $0.99 is not going to improve my sales.

IngramSpark is definitely improving my sales. I’m selling print books through third parties in Asia and Australia, which I never really managed before. I’m being paid more for sales that would have gone through CSED. Additional IngramSpark sales have already paid back what I spent for a thousand ISBNs. I have only a small subset of my titles fully through their system so far, so I’m hopeful that’ll increase when the rest grind through.

The truly annoying thing about all this: CreateSpace and IngramSpark both use the same printing machinery, at the same companies. The different prices are entirely business decisions. I’m not declaring that my lower net on CSED books was absolutely Amazon’s attempt to discourage availability of my print books outside their ecosystem, but my lower net on CSED books was almost certainly Amazon’s attempt to discourage availability of my print books outside their ecosystem.

On the plus side of this migration: the Prohibition Orcs books have spiffy redesigned covers. I am well pleased. And the first one is only $0.99 in ebook.

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CreateSpace Shutdown Plan

Beware: book industry neepery.

Yesterday, Amazon announced that they’re merging Createspace into their KDP Print program. A reading of the article makes it clear that the services aren’t merging, though. Createspace is shutting down and all accounts are migrating into KDP.

This presents problems for me. KDP does not offer the same services as Createspace. The ones that present problems for me include:

  • Payment will be delayed an extra 30 days: annoying, but I’ll deal.
  • Small books will increase in price in Europe: I’ll have to pass this on to you. Sorry, folks.
  • Title Information: They’ll screw up my metadata, in new and exciting ways.
  • Orders: I will no longer use Createspace for books not available on Amazon–fine, whatever.
  • Expanded Distribution: I’ve heard from more than one source that KDP Expanded Distribution does not work outside of the US. This is a critical deal-breaker for me. I have non-Amazon readers around the world.

      Fortunately, this merger isn’t a surprise. The Digital Reader has been warning us about this for months, so I’ve had this percolating in the back of my brain. This is why I bought a block of ISBNs at the end of 2017.

      Here’s the plan for all Tilted Windmill Press books.

      1. Join ALLI. For $99/year, I get unlimited free IngramSpark access.
      2. Reissue everything using my own ISBNs. (Remember, you can get 1000 ISBNs for the price of 50, so think long term. Also, ISBN pricing is a ripoff.) Start with the best-selling titles, and go down the list.
      3. Distribute all print books through IngramSpark. Everything issued in 2018 is already available on IS, so this isn’t a big deal.
      4. Also distribute all print books directly through KDP Print. I don’t want to migrate, because they’ll mess up my nonfiction metadata. (Amazon’s offerings are clearly geared towards fiction. Nonfiction is wedged in.)

      As a test, I already followed this process for FreeBSD Mastery: ZFS and FreeBSD Mastery: Advanced ZFS.

      The problem books will be Sudo Mastery and DNSSEC Mastery. I’ve already talked about issues with these books, but to make a tediously long story short, availability of the print editions outside the US will be limited until I get the second editions out. That’ll start as soon as I finish the jails book. If you want the current edition in print, order now.

      The thing to worry about here is scope creep.

      I really need to revisit the covers on some older titles, like the Montague Portal and Prohibition Orcs books. Title text design standards have changed since 2010. The books that I’ve already designed alternate covers for will get them as part of this upload. Others will have to wait.

      And if I’m changing the covers, shouldn’t I also change them for ebooks?

      Yep. But that requires re-uploading books to every site. That’s a mindless job, and can be done in the evenings. It should also be combined with an audit of which books are on which sites, because I’m certain I missed some retailers for some books. (Fifty-odd titles. Several ebook retail distributors, which have changed over time. Yeah, there’s gonna be holes.)

      So, this means a giant spreadsheet. With a list of titles and checkboxes and distributors. Oh joy oh rapture.

      The really annoying thing here is that I’ve started making real progress on the jails book and on the next Beaks novel. Once I have momentum, I need to keep it going. So I have to really focus my time for the next few weeks to get this done.

      Because I only have a few weeks. What’s the drop-dead date? That’s a great question, but Amazon learned how to communicate with small authors from The Prisoner. “That would be telling.”

      Had I started with my own ISBNs, this would have been much simpler. I had no way of knowing in 2012 that this ridiculous business model would actually work, though. I would strongly encourage any self-publisher to own and control their own ISBNs, even if you have to buy them in blocks of 10 or 100.

      Now if you’ll excuse me, I have a load of work to do…