From Nathan Bransford:
Mike Shatzkin is one of the most knowledgeable people in the entire publishing industry, and when I saw that he had written a book on the book biz with the late Robert Riger, this was an insta-buy.
The Book Business: What Everyone Needs to Know did not disappoint my expectations. Everyone has something to learn from this helpful guide, whether you’re a publishing newbie or a seasoned veteran. It’s organized in a very readable Q&A format and has everything from an overview of the major players to a history of the industry to the latest trends shaping the business.
I especially learned a ton about the ways in which the current e-book era resembles past publishing industry disruptions, especially the advent of mass market paperback books, which were initially very popular among readers of pulp/genre fiction and were disdained by the publishing establishment of the time. Sound familiar?
Link to the rest at Nathan Bransford
PG thinks a good question to ask in 2019 is why traditional publishing is entitled to such a large share of the revenue a book generates when, for most traditionally-published books, Amazon is the largest seller of those books.
He suggests that if you look at the legacy publishing chain of organizations and individuals who are taking a piece of the revenue the book generates either directly or indirectly, it doesn’t seem like a terribly efficient system of marketing and distribution for the book as a product, especially a printed book.
Here’s an overview:
ᶑ Author creates a manuscript
ᶑ Agent pitches manuscript and finds a publisher
ᶑ Publisher edits the manuscript (or perhaps hires a freelance editor to do that job)
ᶑ Publisher arranges for formatting of the manuscript and hires a cover designer to create the cover
ᶑ Publisher sends files of the manuscript to a book manufacturer (formerly called a printer), perhaps through a middleman.
ᶑ The book manufacturer may print the book itself or have the book printed offshore, often in China
ᶑ Finished hardcovers arrive on a container ship from China and are shipped to a wholesaler/distributor – usually Ingram
ᶑ The Publisher’s sales reps are pitching the book to bookstores in advance of its release. They’re usually paid a salary plus commission. Generally, a bachelor’s degree is required. Most don’t make a lot of money.
ᶑ The physical bookstore generally buys its books from Ingram or a smaller wholesaler at a discount from list price – 50% is the most common discount, although that may vary. To clarify, the bookstore usually pays $10 for a book that has a list price of $20.
ᶑ Ingram sends a portion of the money it receives to the Publisher.
ᶑ The Publisher then sends a royalty check to the Author twice a year. The Author’s check may be reduced by a reserve for returns, part of the royalties due to the Author, ostensibly designed to cover the Author’s royalties which will not be payable because of books sold to bookstores during one royalty period that the bookstore returns unsold for a credit during a following royalty period.
Each of these steps has a cost. Somebody is being paid to execute each of these steps. Ultimately, directly or indirectly the Author pays all or most of that cost as deductions against the Author’s royalty payment. The Author receives what’s left over after everyone else takes his/her/its slice of the pie.
If the supply chain costs were lower, traditional publishers might feel more inclined to compete for Authors by offering higher royalties. (Or not, but we’re talking the potential for economically rational decisions here.)
On the other hand, here’s the distribution system of an indie Author selling through Amazon:
ø Author creates a manuscript
ø Author formats manuscript or hires a formatter to do the job
ø Author uploads manuscript to Amazon and selects ebook only or ebook plus POD
ø Amazon stores the manuscript in digital form, offers the book for sale on a world-wide basis if the Author selects that option, processes credit card payments from readers and sends monthly a monthly payment directly to the Author’s bank account. For books priced within Amazon’s preferred pricing stratum, Author receives 70% of the price paid by the reader.
Amazon is the only intermediary between the Author and the reader. Once the Author uploads a manuscript, all steps necessary to place a book into a reader’s hands are performed by Amazon, utilizing the world’s most sophisticated and efficient selling platform.