Thursday, August 23, 2012

Let’s Do the Math


I keep seeing blogs on how great it is to give away your books on KDP Select and the fantastic returns some people have had. Joe Konrath handed his blog over to his friend, Melinda DuChamp, who posted about the success she had had with KDP Select. You should definitely read her post, which will give you the upside of book giveaways.

I’ve had failures and successes with the KDP Select free promos, nothing like Melinda describes on the success side however, but enough to make me happy for a couple of months.

I’m not knocking anyone for working this angle. As I said, I have too. I’ve had family members ask me how it could possibly work?  My answer has been “I don’t know, but it does.” Done correctly, you can see a really big bump in your sales after a free promo. But it’s been bugging me lately and here’s why: There is just something fundamentally wrong with a business plan that requires you to giveaway thousands of your books to gain sales in the range from say 5-20% of the giveaways.

Is this just the point of view of someone who spent too many years in Corporate America? Possibly. But there’s another rub. The longer this trend stays in place the longer it’s going to take for a market for actual ebook SALES to return.

Here are my calculations (feel free to adjust or pull them apart to your heart’s content): It’s been said that there are 700,000 Indie authors out there. I’d argue that there are more, but I don’t have any evidence to prove that, so let’s go with that number. If the average ebook price is $2.99 then in order for those 700,000 authors to average $200 a month in profits there would have to be 209,300,000 ebooks sold.

That’s 700,000 times approximately $2 per book times 100 books sold per month = 209,300,000.  This translates into about $625,000,000  at our average $2.99 per book. According to David Derrico's website, in February of this year (before KDP Select even kicked in), ebook sales in dollars was $114,900,000 – way, way less than it would take to have an ebook market that would affect authors in a significant way.  In fact, with that kind of money, only about 128,000 authors would take home $200 a month (on average).

Yes, this spread of the cash across all 700,000 authors is utopian and very unreasonable.  There are those that will make little or nothing each month (as was always the case) and those that will make bucket loads of money.  I understand this. However, it’s also important to understand that some percentage of the freebies are cutting into real sales and we, as a group, can hardly afford that. Remember that $114 million was BEFORE we started giving away our books.

I think it’s going to take a very long time to get ourselves back to the point where ebooks are a paying proposition for even a small percentage of authors, and the longer we partake of the fountain of freebies, the further away that day gets.

This is just my considered opinion. Please – anyone – blow away my numbers. Tell me that I’m wrong. I’d love that.

10 comments:

  1. My results with KDP Select and free promos have been LESS than lackluster. Just didn't work for me in terms of sales at all. Not even for a couple of months. Heck not even for a single month. And by "not working" I mean - I didn't even earn a hundred bucks.

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    1. Whoa, Kimberly! That's a lot of work for virtually nothing. So sorry to hear that.

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  2. Kathy, I think there is one thing wrong with your math. Good books, over the long run, will sell many more copies than bad books, and there are a lot of poorly written and poorly edited books on the market. Readers remember. I may be wrong, but I believe that authors of good books will sell many more copies than authors of bad books. The secret is to write good books and hang on until the readers discover your works.

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    1. Oh, I agree with you there - completely - but there's no way to account for good or bad books. That's why generalization doesn't work except for a very blurred overview. Thanks, Caleb.

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  3. I agree with Caleb and add another point, don't I always! I know for myself that it is my expectation-wanting to support myself writing as soon a possible and maybe even quicker-that biases my thoughts on marketing. I know in my heart that we NEVER know how to do something we've never done before, because that truly isn't our purview. In any success we've ever had, if were we honest, we'd not be able to draw a through-line from start to finish, because we truly don't do the "how." What there is for us to do is what we can do, in this case write more and get better and better at it. If we really were able to grasp how we succeed, then all those how-to books in marketing, breeding sheep(my area), working the stock market, winning the lottery, etc would create more winners. But we don't know. The responsibility for that lies elsewhere. We need to know what is ours to do in each situation and do that full out, and that wisdom is always available within us.

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    1. Christina - I've always had trouble restricting my efforts to what I can actually affect. As I grow older, I'm getting better at recognizing what falls into that category. You're so right - getting better at writing is what it's really all about anyway.

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  4. Caleb, Kathy,and Christina...You are SO right. It IS the writing that matters. Apply the model to any other business: People who want to make and sell cookies don't start with a marketing plan, execute it, then feel crushed and baffled when the cookies don't sell. They start with a recipe, an ambition, a willingness to listen to advice and seek reactions from MANY cookie lovers before the rent the shop and open the door.

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    1. Great cookie analogy, Kathleen. I'm not sure how you get many people to read your book without opening the shop though. There are so few friends and relatives (in my case) that would have read my book before I published it. But that's a great idea if you can find an audience.

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  5. First, I'm going to sit down and try to figure out what Christina said, because I know it's good.

    There are good writers and bad one. Good ones can get better. Expectation of wealth or just making a living at our craft can be heartbreaking. Write well, learn to improve and shake the trees. I have yet to try the giveaways, but I think I soon will in hopes to kickstart my latest child-- hope it works.

    Thank you, Kathy

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    1. When you do try the giveaways, be sure to call on your friends - like me! - to tweet for you.

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