Inspired by the Author Earnings Report, someone asked people on that forum to report in, if they were in the top 1% of indie published writers. Meaning, according to this forum, that these writers earned at least $100,000 per year on their indie published books. Not on one book. On all of their titles combined.
That’s an important point.
I spent an hour reading the self-selected responses. Of course, folks who didn’t earn that much responded as well, and frankly, those posts were just as interesting as the others.
What I found fascinating wasn’t the number of writers who earned $100,000 on their Amazon sales alone. It was the other numbers in their reports.
My little brain was blown.
And it shouldn’t have been. It really shouldn’t have been.
. . . .
I have known for years now that all of us earn more money on a per sale basis when we self- or indie-publish a book than we do when we sell our traditionally published books.
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To make $100,000 in a year, the traditional writer would need to sell 113,636 ebooks that year [with a net royalty of] 88 cents each.
For an indie writer to make the same money that year, the math is pretty simple.
The indie writer gets 70% of the $5.00, just like the traditional publisher does. So the indie writer gets $3.50.
To make $100,000 per year, the indie writer needs to sell 28,571 ebooks in a year.
. . . .
You see, in traditional publishing, how much writers earn cumulatively doesn’t matter. Traditional publishing is all about The Book. One book. Not a series of books. Not all books by author. One book.
Royalty statements are based on the contract. If the contract is a one-book contract, then the only thing counted on those royalty statements is that one book.
That thinking is deeply, deeply engrained for me. And what’s worse, I have two sets of traditional calculations in my head.
The first is how many books per year I needed to sell to a traditional publisher to earn $100,000 by advance only. Because the advance is the only thing a traditionally published writer can guarantee.
Since advances are never paid as one lump sum amount, a writer would have to do one of two things—sell a book to a traditional publisher for at least $300,000 or sell a lot of books to traditional publishers that same year so that the total paid out would equal $100,000.
First, the $300,000—divided into signing, acceptance, publication. $100,000 for each third. Book contracts are still structured like this, although often, these days, it’s divided by four or more.
. . . .
My very first novel, The White Mists of Power, came out in 1991 as a mass market paperback with a cover price of $4.99. I was a baby writer, with my first novel. So my royalty rate was 6% on that book. Which meant that for each copy sold, I made 30 cents.
To earn $100,000 on that one book, I would have had to sell 333,334 copies of that title at full price. (Getting the full price royalty was easier to do in those days, by the way.)
. . . .
For me—and people like me, people who “grew up” in traditional publishing—earning $100,000 on one book in one year meant you either had a great agent who managed to bump the advance on that book or your book sold at bestseller numbers. Pre-2010 bestseller numbers.
So…when I hear that a writer makes $100,000 per year, and is only doing so on a handful of books, I default to my training. Oh, I think, they’re selling hundreds of thousands of copies.
Nope. They’re selling tens of thousands of copies.
Most of my traditionally published novels—including the absolute failures, the ones that never earned back their advances—sold more copies in their first year of publication than the books that are making their indie writers $100,000 per year.
I am not saying this about my traditional books to say that traditional is better. It no longer is. In fact, if you look at the Author Earnings numbers, you’ll see that a traditionally published debut author will actually sell fewer copies than an indie published debut author. And not by a few hundred copies, but by thousands of copies.
I’m making this point because so many long-time traditionally published writers get stuck in the wrong number.
We look at copies sold rather than income earned.
. . . .
Back in the 1980s and 1990s when a lot of us started, we sold at least 30,000 copies of a single title in the first month of release.
Book sales figures went down rapidly in the years 2007-2010, yet most midlist books in the first month of release sold at least 10,000 copies . The sales would fall rapidly after that because the book would disappear from store shelves, but the initial sales were high.
Now, sales build. They start small and grow.
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You can make what I call bestseller money—$100,000 per year or more—without selling more than 5,000 copies per year of a single title. Look at the numbers above.
To earn $100,000 per year, the indie writer has to sell fewer than 50,000 books per year. If the indie writer has one series of five books that sells better than her other series, she could sell 10,000 copies of each book in the high selling series over the entire year, and make that $100,000 (at the $3 price point). If the other non-series titles are trucking along at a much slower pace, the writer could be selling, say 8,000 copies of her books in her series, and 10,000 copies of all her other books combined, and make more than $100,000 per year.
Those book sales figures are small by old traditional publishing standards.
. . . .
People who work in traditional publishing have been making the same mistake I continue to make. They weren’t thinking about the real numbers. I know better. But they apparently do not.
They’re buying, say, paperback rights to ebook series and expecting to get bestseller numbers out of those books. Or even midlist numbers.
Even those indie authors are extremely successful, their single titles are often not selling at the kinds of numbers that make an international conglomerate happy.
Which is why so many formerly indie writers—and their traditional publishing editors—end up confused and disillusioned. The indie writers who’ve gone traditional expect their numbers to increase, which is a reasonable expectation, given all the hype that traditional publishing shells out about its ability to market books.
The traditional editors expect the formerly indie writer with the proven title to sell at old-fashioned traditional numbers—30-50,000 copies out of the gate. That usually doesn’t happen any more, and rarely happens with the paper-only deals.
Everyone gets disillusioned. Of course, the traditional editors aren’t doing their due diligence because hey! that’s numbers, and they do numbers much less often than I do. They go with their gut.
Or they do something else entirely. Like this absolutely terrifyingly accurate piece from the May 6, 2016 Entertainment Weekly, titled “The Million Dollar Book Club.”
The article purports to explain why publishers are “betting big” on some debut authors. The amount of “gut sense” and ignorance of actual numbers in that article is so staggering, the reporter noticed it, and asked one of the publishers interviewed about it.
That lead to the article’s final paragraph, and it’s a doozy:
Given the amount of books a publisher needs to sell in order to make a profit, it’s possible that none of these novels will actually make money. But Random House publisher Susan Kamil believes that the honor of having a sparkling literary talent on your list can offset any financial loss. “We want to have the best writers in the world at Random House,” Kamil says. “Sometimes those writers come at a premium—and we have paid it.”
Think about that for a moment. This is someone who is charged with running a for-profit business, trying to make sales, and boosting a bottom line, and she’s saying, “The honor of having a sparkling literary talent…offsets any financial loss.”
Um, no, honey. It doesn’t.
That’s how authors with big advances and sparkling debuts end up getting dumped by their publishers.
. . . .
What I’ve been telling all of you for years is this: you can make more money indie-publishing than you can as a traditionally published writer. More money faster, and more money in the long term.
I’d been seeing it in my own income. However, I also saw the sales figures and good old-fashioned me felt odd about it. Because of those high velocity numbers my books used to have back in the day.
Right now, the new books in my various series (with all but one pen name) are selling annually at much higher numbers than they ever sold when published by New York. Not in that first month. But by the time the books would be off the shelf in the old model, the sales I have are greater than that first month of traditional publishing sales. And the numbers are cumulative, meaning next year and the year after those books will still have very good sales, growing sales.
PG will observe that Kris is describing a textbook characteristic of disruptive innovation.
The industry incumbents don’t want to compete in the market where the small disruptive businesses are selling their products. Those markets simply don’t generate enough profit to support the cost structure and profit needs of the incumbents.
Good sales for indie authors – sales of all their books sufficient to generate $100K in annual royalties – won’t move the needle for big publishers.
Once the small businesses reach or exceed break-even, they can continue to operate, compete and expand. PG predicts the number of authors who earn $100K or more in annual royalties will continue to increase in future Author Earnings reports. And so will the number of authors who earn seven figures or more in annual royalties.
More and more of these authors will be those who, absent indie publishing, would have signed with a traditional publisher and made money for a traditional publisher. But no $100K indie author is going to be satisfied making $30K as a traditionally-published author. And no $1M author is going to be satisfied making $200K as a traditionally-published author.
Any indie author who is supporting him or herself with their writing and who looks past an attractive one-time advance to consider their future ten-year or twenty-year income from indie publishing is not going to be tempted to take the traditional route.
From the indie author’s perspective, the cost of doing business with a traditional publisher is so high that the publisher will have to sell a large multiple of the number of copies the author would sell as an indie and keep selling that large multiple year after year to beat what the author would earn from self-publishing the same books.