Economics of Book Publishing
I'm at the SpeechTEK West conference/trade show in San Francisco this week, and I was chatting with a consultant I know about our respective books (his forthcoming, mine published). An industry analyst of our mutual acquaintance interjected the too-obvious-to-ask question:
"What are the economics of writing a book? How do you make any money off it?"
After a few seconds of blank stares, he clarified: "You spend six months or more of your life writing and editing a book, and get to keep fifty cents or a dollar from every copy sold. How do you get paid for all your time?"
It's a good question, especially considering that for a technical book selling 2,500 copies is considered pretty good.
In our case, where we're our own publisher, we had to front about $4,000 in design and production costs. Our gross margin is anywhere from $6/copy (for books sold through Amazon.com) to $19/copy (for books we sell at full price). We would have to sell about 700 copies through Amazon to cover our costs. If we sell that many I'll be a very happy camper: we expect to take a financial loss on our book (not even counting the time we spent writing and editing it).
So why bother?
The answer for us is the same as for the consultant (who may ultimately get a couple thousand dollars for half a year's work): Marketing.
Of course we all want to have a best seller on the business list, but that's unrealistic. There are thousands of business and technical titles published every year, and only a handful ever make it to the top ten.
But for me and my consultant friend, the payoff comes (we hope) through other business and enhanced credibility in the market:
Simply having a book published is a mark of competence. It says that we take this seriously, that we're smart people, and that we know what we're talking about.
Every copy sold equals someone willing to pay money to read our ideas.
Every copy has my name and our company logo on it. This links us with the core ideas of the book (i.e. good customer service) in the minds of the readers. Some of these readers may be in a position to buy services like ours in the future.
When the stars align, the marketing power of a book can be amazingly powerful. There's one consultant in the call center industry (who shall remain nameless, but industry insiders will know who I mean) who has parlayed academic credentials and some research twenty years ago into a sizable business just co-authoring other people's books. His business is basically this: companies pay the consultant a fee to co-author and publish the books they write (he self-publishes everything). In other words, he gets paid to put his name on a books in order to lend credibility to a company's marketing message (he also does other sorts of endorsements; the model is sort of like the pro athlete who gets paid to drink a particular brand of beer in public). Of course, every book he publishes with his name on it also enhances his own credibility as an industry expert--after all, look at the stack of books he authored! He must be a smart guy!
Not a bad line of work, if you don't mind selling your soul.
(P.S. Our book is currently outselling all but two of this consultant's titles on Amazon.com. But that's not saying much.)