Books Sales to Generate Profit
Written By: Timothy Fish Published: 12/11/2007
How many books does an author need to sell to make a profit? It is a simple enough question, but the answer may not be so straight forward. An author makes a profit when the authorís income exceeds the expenditures required to get the income he receives. This is different from the how much income an author must have in order to make his living as an author.
An authorís expenses can be kept quite low. Authors need a computer, but most authors already have a computer before they begin their first manuscript, so there is no reason to include this as one of the authorís expenses. The authorís time is not billed to the project either. Depending on the project, expenses that are billable to the project are things like gasoline for a research trip, long distance phone calls to interview people and purchasing books for research. A billable expense is any expense where money or goods change hands to produce the book. Once the manuscript is complete, there are other billable able expenses. The cost of printing the manuscript on the printer is billable. The cost of mailing the manuscript to an agent or an editor is billable.
Every project is different, but letís consider one scenario. The author writes during the evenings and weekends for two months and finally completes her manuscript. So far, she has not spend anything, but she decides to print the manuscript to make it easier to edit it one more time before calling it done. It costs two cents per page to print the 150 page manuscript, so it costs $3. After completing her edits she is ready to send it to various agents, hoping that one of them will agree to represent her work. She e-mails twenty agents and six of them respond saying that they would like to see her work. She prints a copy for each agent at $3 each and mails them for an additional $3 each. Her total expense so far is $39. After a few weeks, she receives rejection notices from each agent and she e-mails twenty more agents. This time, nine agents are interested, so her total expenses increase to $93. One of the agents agrees to represent the manuscript and in the process of getting things ready to submit the work to various publishers, the author spends an additional $10. Now her expenses are $103. A publisher offers a $9,000 advance with a 8% royalty. Out of the advance, the agent gets $900. So even without selling a single book, the author has a profit of $7,997.
The situation for a self-published author is quite different, so letís look at that scenario as well. As before, the costs of writing the manuscript are near zero until the manuscript is nearly complete, but his author will print the manuscript more during the editing process than the traditionally published author. There is the cost of printing it for the manuscript edit ($3). If the author is typesetting his own work, he will print it again to view how everything looks on the page ($3). Printing the cover may require another dollar. The total cost so far is $7. There is the setup fee for the company that will be printing the book. This may be as low as $90, bringing the total cost to $97. Letís assume royalties of 25% and a retail price of $16, so ever book sold generates $4 in income. This author must sell 25 books in order to make a profit, but there may be advertising cost and other expenses that may increase the demand or the book, but it will require more books to be sold to generate a profit for the author.
Another scenario involves a company like iUniverse. Their Premium Pro package costs $1300. They pay a 20% royalty and provide the author with twenty copies of his book. Using similar costs to those above, the total expense is about $1310. If the retail price is $16, the twenty books are worth $320 and should be counted as income because the author can sell them at full price and reclaim the money. For other books, the author will receive $3.20. With this package, the author must sell 310 copies of his book to make a profit.
In the first scenario, the author has a large sum of money, but because it is an advance it will be some time before she sees a royalty payment. If the author is getting $1 per book sold then she will have to sell 9,000 books before it has earned out and the publisher will begin paying her. While it is unrealistic to expect this to happen, at that number of books, the author in scenario two will have a profit of $35,903 and the author in the third scenario will have a profit of $27,490.
Looking at these figures, a person might ask why an author would ever want to have a book published by a traditional publisher. To reach $9,000, the author in the first scenario would need to sell 2,275 books while the traditionally published author must sell 10,003 books. What should not go unmentioned is that it may be easier to sell 10,003 copies of a book from a well-known publisher than what it is to sell 2,275 copies of a self-published book. In other cases, the author may have a way to sell more copies than what a publisher would be able to sell. In that case, it may be to the authorís benefit to bypass the publisher.