The Cost of Self Publication, Ebook vs. Print: One Person’s Story

Last week, which is about two years ago in blog-time, I asked what y’all thought the appropriate cost for an ebook would be, based on my noobish calculations of whether there were actual savings in e-format vs. paper, what with the cost of paper, glue, transport and shelfspace.

One person contacted me personally and asked if I’d be interested in her story of self-publishing her book in both print and e-formats, and the cost vs. savings of each in her experience. She asked that she remain anonymous, so I’m not posting this so people will try to guess who it is. I found her experience eye-opening to say the least, and the frank discussion of cost and result refreshing. Warning: her account is long, but the science is tight. Thanks, Anonymous.

Anonymous writes:

Obviously, these numbers aren’t representative for a big publisher who can put out an offset print run.  But I also don’t have endless shipping charges ($3 per book media mail) back and forth,  warehousing charges, the eaten costs on stripped books, author advances, etc.

1. I didn’t use an author service/POD service/vanity service.  I set up my own shop, which wasn’t hard or (very) expensive, since I’m already self-employed.
2. I did the interior and exterior design myself, which was hundreds and hundreds of hours, most of it learning time.
3. I did all the CSS and (X)HTML markup on all the e-book formats I decided to offer (9, including Kindle: EPUB, HTML, IMP, LIT, LRF, MOBI/PRC, PDB [eReader]—then PDF, which only needed a couple of changes from what I sent to Lightning Source). This another several hundred hours.

SPECS: Epic novel, 3 full-length romances all woven together over a larger story arc.

6×9 trade paperback
700+ print pages total
283,000 words (not including front matter/back matter)

PRINT

$3,500 for editing
$100 for a final proof
$70 for a newer version of Photoshop (eBay)
$25 for the ISBN
$55 for the card cataloging information (copyright page)
$15 for back cover image
$2.50 for front cover image (stock photo, what can I say)
$210 for Lightning Source setup/listing/revision fees
$1200 for 100 books @ $12 per book
$360 books I’ve given away for Library of Congress listing, reviews, Amazon listing, and promotion

$5537.50

Cost per print book (not including in-kind labor costs for design) for 100 books: $55.38

This does not include $29.99 per year for Amazon listing fee (Amazon Advantage program) charged to those small presses who don’t use BookSurge.
It doesn’t include shipping I pay as part of my incentive to get the reader to buy direct from me ($3 per) because we hand-sell a lot of books locally.
It doesn’t include web hosting fees.
It doesn’t include whatever (non-quantifiable) sales I might lose because I made it non-returnable by bookstores.

EBOOK

$3,500 for editing
$100 for a final proof
$70 for a newer version of Photoshop (eBay)
$25 for the ISBN
$2.50 for front cover image (stock photo, what can I say)
$24.95 for eBook Studio (the eReader format)
$99 to turn it into an iBook application for the iApp store*

$3,821.45

Cost per ebook FORMAT (not including in-kind labor costs for markup): $382.15.

NO DRM.

I calculated the ebook as if I had not done the print book, as the content would have been the same. The only real up-front difference in cost between print and e-book is a matter of $1,815.  The print book will still cost me $12.00 each plus $3 if I have to ship it somewhere else.  I will not allow Amazon to order it from Lightning Source, either, which is why I bought the books myself (they were having an extra 10% off special for volume).

Note About Apple: I almost didn’t include that $99 because Apple rejected my application for inclusion into the iApp store because I had used the F-word.  The iApp programmer (not ScrollMotion) said, “Well, we can clean this up or we can wait until Apple has a rating system in place, which might be a while.”  Since then, I’ve gotten the book onto SmashWords, which has a direct feed into the Stanza native catalog, so that’s not an issue, but Apple having an issue about the F-word (ah, but not “cunt” or the explicit sex, go figure) just grates.  I’m not the only one, but the more high-profile guy, David Carnoy (Knife Music) self-censored and got his application approved.  Since he did that, he no longer cares about the bigger issue there.

This is where the math gets tricky.

BUYING FROM AMAZON:

PRINT:  To put the book on Amazon or get it into a bookstore, I had to price it sky high just to make a couple of bucks per unit. It’s ~$40.00 retail. A 55% discount gives me $17.10, minus $12.00, which is $5.10, which is pretty good, except if Amazon orders it direct from Lightning Source, LSI charges $5.30 to ship it. Per book. I lose 20c each book. They mark it down to $28.87 and throw in shipping, but that doesn’t affect my 45%. Then you have to consider the $29.99 Amazon charges me per year to participate in their program…

KINDLE: Amazon takes 65% of the Kindle retail price I set, which is $12.99, but they mark it down to $9.99, which gives me $4.46 per. I set it that high on purpose, to discourage Kindle sales, but I was told that I would get 65% of the price *I* set, which is not what I see in my Kindle report. I see Amazon as a marketing vehicle and nothing more.  Too, their digital conversion platform is hideously primitive.  It’s supposed to be Mobipocket, but I plugged in the same CSS/HTML file that I used to create my own MOBI/PRC file into Amazon’s Kindle maker and it simply did not work.  The format was all wrong; it didn’t honor any but the most primitive tags.  I’m very unhappy with it and it was an horrendously long process for what it was.

BUYING FROM ME:

I charge $27.99, including shipping ($3 media mail, if it’s mailed at all), which beats Amazon’s price and I clear $12.99.

I charge $8.99 for a zip file bundle with all 8 e-book formats included.  No shipping.  Unlimited supply.

I charge $5.99 for a single e-book format.  No shipping.  Unlimited supply.

You cannot calculate the unit cost of the e-book because the unit price will always be as X approaches zero. You can only calculate the cost PER FORMAT (which may or may not include DRM). You have the opportunity for an unlimited number of e-book sales without further cost (not including web and shopping cart, etc.).  For every print book I sell, I have to spend another $15.00. For every e-book I sell, I have to spend ZERO.

Thus, I want to encourage e-book purchases as much as possible. I know people like print. Hell, it’s a gorgeous book; I’d want it in print, too, but it’s expensive (as it must be). I did that because I don’t know ANYONE in real life who has an e-book reader or has even seen one or thought to use their Palms to read e-books.  I have never seen another e-book reader in the wild.  I don’t know too many people who even know what a Kindle is.  If I wanted my book to be read by real readers (and get it into the libraries), I had to have it in print, otherwise, I would’ve bypassed that entirely.

Still, you’ll notice that whether I had put it in print or not, editing was the biggest expense and that would have been spent regardless.

Now, it is true that for me to break even, I’d have to sell 933 of a single-format e-copy (calculate any permutation of print/zip bundle/single format you care to). However, I also don’t have a deadline.  I have time to build a reader base. I don’t have any pressure to get my sales up/keep them up.  I don’t have to depend on Wal-Mart’s approbation and I don’t have to worry about returns (because I made the book non-returnable).  It’s on Amazon, Barnes & Noble, Borders, Powell’s, and Books-a-Million, which is all the legitimacy I need.  And I have good reviews.  I can autograph books if people want them (it’s a free option in my shopping cart) and I’ll even gift wrap the fucker for a little extra (amazingly popular at Christmas, lemme tell ya).  I can offer long excerpts, I can put up snippets anywhere I want, I can put up extra content if I want, I can give away as many print or e-copies as I want, and I don’t have to worry about anybody getting down my neck for giving away too much.

I don’t know for certain what big publishers are doing to make their prices so high, or what they think they’ll get out of it.  I only know that I made a deliberate pricing decision to discourage Amazon and Kindle sales because I needed Amazon’s visibility but I didn’t want to lose my shirt, bra, AND panties. I made a deliberate decision to make my books NONreturnable because that would have bankrupted me in no time.

It may be that they’re padding their prices to get out from under their sunk costs (see above + warehousing and shipping and stripping/waste and don’t forget author advance).  It may be that they think people will pay those prices.  It may be they don’t know the income ranges of their target audience and they’re experimenting. It may be that, like it is for me, the “discount” is simply too onerous to bear and being in the bookstores/on Amazon is a visibility issue, not a true sales outlet. They may simply be clueless and don’t care to get a clue.

It may be that they actively want to discourage e-book sales (the same way I want to discourage Amazon sales). Because what I CAN tell you is that their ROI on DRM costs has to be amazingly low.  So, spend a lot of money on a super duper DRM instead of whatever your existing software can already do, and you get what? It takes a hacker 2 extra hours or days to crack your super duper expensive encryption. I mean, “unbreakable” encryption is like catnip to some hackers.  If they truly think that throwing money at the problem will make it go away, well, okay.  In that case, I can believe the claims that “DRM COSTS MONEY!!”

SB Sarah: This part specifically references the discussion in the original thread that ebooks should be 10% less than paperback costs. [O]thers chimed in and said that the e-books should then cost 10% less than the p-books.  I both agree and disagree with that, and this is why:

What I didn’t and couldn’t figure in (which you probably already deduced for yourself) is that if you add in the real-world cost of the hours I spent Photoshopping and formatting the e-book, the e-book would have actually cost quite a bit more per format.  This is a CONVENIENCE to the customer and is, IMO, value-added. On the other hand, the perception that e-books should cost less will not go away with the Baby Boomers and Baby Busters (aka Gen X), if ever, and therefore, the publisher/author needs to eat that “cost” (consider it marketing or goodwill) and hope to earn it back in the long run with the advantage of unlimited supply for little to no added cost.

As for the 10% difference, you’ll notice that at my prices, the e-book at $5.99 is 460% LESS than the print book at ~$28.  In the end, I’m not really “eating” anything for the sake of providing convenience to the customer.  Unlimited supply in perpetuity is as X approaches zero.  Not only that, but if the reader likes the world I’ve created, s/he can stay in it for free on the book’s site where I’ve posted the extra content.  After a while, I’ll upgrade my e-book offering to include all that.

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You got all that? No? Go back and read again. Just kidding.

While obviously not everyone can undertake the cost and effort to self-publish their own work, the actual cost figures reveal a lot of the effort and expense that goes into publication. I still couldn’t say where eBooks ought to be priced, but this does give me a lot to think about. Thanks, Anonymous.