By Ron Pramschufer, President , Self Publishing, Inc. – Helping Authors Become Publishers since 1995
Why can’t I make money with a POD Publisher? I thought it was appropriate that I write the answer to this on April 1 because this industry represents one of the largest April fool’s joke on the Internet. As potentially successful as the POD publisher’s salesperson or website makes it appear, the numbers just don’t add up.
When you are published by a traditional publisher, you earn royalties and the publishers earn profits. When you self publish a book you earn both the royalty and the profit because you are paying all the expenses associated with publishing the book. When you pay a POD Publisher to publish your book, you are back to earning a royalty and the POD Publisher earns the profits. And here lies the problem.
When you are a traditionally published author you work for a royalty. Everyone knows this. If you are lucky you get a nice advance before the book is even published. The publisher, on the other hand works for a profit. Profits are what is left after paying all the costs associated with publishing, such as editing, layout & design, printing, storage and fulfillment, distributors fees as well as other sales and marketing expenses and, of course, royalties. The author’s royalty is not a particularly high percentage of the sale because the publisher is putting up all the money and taking most of the risks so they rightfully expect to make the lion’s share of the profits.
When a person decides to truly self publish their book they become the author and the publisher. As such, they earn the royalty and the profit. The royalty because they wrote the book and the profit because they are outlaying all the money and taking all the chances. High risk, high reward, low risk, low reward.
This is not the case when the author pays a POD Publisher or other subsidy or vanity publisher to publish their book. With the POD/Subsidy/Vanity Publisher, the author is back to working for a royalty as they would be if they were traditionally published. The difference, though, is that the author is also paying all the expenses associated with the publishing of the book but receives none of the profit. The profit is reserved for the POD/Subsidy/Vanity Publisher. Yes the royalties are higher than one would expect to earn from a traditional publisher but it hardly offsets the amount of money spent by the author getting their book to press through one of these publishers. Does that sound fair? Evidently it does to tens of thousands of authors who pay to be published by one of these publishers every year. Is that the truth or is it that they just don’t understand? I’d prefer to believe the latter.
What exactly do you get from a POD Publisher? I won’t choose any one publisher in particular because they all operate more or less the same way. You pay some sort of fee up front. This gets you the use of one of the publisher’s ISBN’s. You do not own this ISBN, no matter what you are led to believe and it is not transferable. It’s just like you putting my checking account number on your bank deposit slips. You will also get your text laid out in a book format ready for printing as well as a cover designed. With only one exception that I know of, you do not own this text layout or cover design, the publisher does. You think you have paid for it, but you haven’t, according to the publisher. So at this point of the game, you have put up a varying sum of money and own nothing.
Most POD Publishers have started to offer editing services. This, of course, is at an additional cost. Some even have excellent editorial services but this is a cost that would have been paid by the traditional publisher where you also earn a royalty.
Your book is now ready for press except it does not go to press. “Demand driven”, are the words they use. A traditional or self publisher prints books. If you are even slightly serious about publishing you need books. There us a good reason for this. Cost. The amazing new POD printing technology is expensive. At cost, a digitally printed 256 page book is going to cost $5/book and that price does not go down no matter how many copies are sold. A traditionally published or self published print run of 2000 books will cost $2/book and that unit cost continues to drop as more books are printed. This leaves a difference of $3/book and again, that’s at cost. The POD publisher is not going to let you buy books at cost. Remember, they make the profit, not you. You are more than likely looking at buying copies of that book at $9/book, $3/book higher than if you had printed them yourself as a self publisher.
Now here comes the real trick. Even the most industry naïve author has picked up on the talking point that the author has to sell their book. Success depends of how much the author gets out, creates buzz and markets his/her book. This is absolutely the truth. This is true whether the book is published traditionally, self published or published by one of the pay to be published publishers. I just recently read that Frank McCourt, author of Angela’s Ashes still spends six months of the year promoting books. The difference here though is who picks up the costs associated with this marketing. If you are traditionally published, the publisher picks up the costs associated with advertising, promoting and marketing the book. The author puts in tons of time but the publisher takes care of the monetary aspects. As a self publisher, you will put in the time as the author as well as the money as the publisher but remember, you are not only making the royalty, you are also making the profit.
With the POD Publisher the author will also pay for all the marketing and promotion, like the Self-Publisher but the money to do this comes out of your royalty, not the POD publishers profits. Not only does it not come out of their pocket, they make a substantial profit on each of these programs by selling them to you. Do you think any POD Publisher would sell an ad in the Sunday New York Times if their payment for this ad came from the sale of books sold? ABSOLUTLY NOT! They are getting it from both ends. They are earning the profit on the ad they sold you as well as the profit on the few, if any books sold as a result of the ad. Pretty good deal, huh? Why do you think there are so many POD Publishers out there now and more and more popping up every day?
As I wrote a few months back, you need to look at these publishers as printing services or publishing services, not publishers. If you need help publishing your book, hire a service like www.selfpublishing.com. Analyze pricing between the various services and make sure you are doing an apples to apples comparisons. Then make your choice based on facts. Watch out for “strings”. Whatever you do you want everything to be portable should you decide to move. If you are paying to publish your book, you should be earning profit as well as paying yourself a royalty.
One last item; don’t be fooled by the “We get you into 26,000 retailers and wholesalers”. This is the left hook of the POD Publishing industry. It sounds great and really makes it look like these publishers are doing something wonderful for you that you couldn’t do yourself as if it were some magical service. None of these places do anything other then enter your book in the Ingram database. Pretty much all the POD Publishers use Lightning Source, a digital printer in Tennessee. Lightning is owned by Ingram. Inclusion in the Ingram database makes your book available in many wholesale and retail outlets like Amazon and BN.com.. You can tell if a book has been printed by Lightning by the oddly placed barcode on the last page of the book. It’s a great little service but it’s not magic and it’s certainly not the self publishing Holy Grail. It is also not something you can’t accomplish yourself for a lot less money. If you don’t want to deal direct, you can always signup for about $50 through an online publishing service like SelfPublishing.com or you can deal directly with Lightning for a couple hundred dollars. Just keep in mind, while POD distribution might work OK as an entry level or supplemental distribution system, it is meant to be outgrown. Except in rare circumstances it should not be your sole means of distribution do to the cost issues mentioned above. Do the math and see you next month.