Too Much Focus on Earnings, Too Little on Expenses

Self-publishing is a business. You’re selling a product to people for money. And, unless you have some independent source of wealth, at some point you need to make more than you spend to keep doing it.  And yet…

What do self-publishers focus on 90% of the time? (I think the exception would be some of the promotions threads I’ve seen where people break down what they spent and what they earned from a promo.) They focus on earnings. Or how many books they’ve sold.

We talk about six-figure authors and how impressive they are without ever asking how much they spent to earn those six figures.  And we take their advice over the advice of others even if it’s possible that they’re worse business owners than someone who makes fifty thousand a year. If someone spends $90,000 to make $100,000 they’re actually doing worse than someone who spends $10,000 to make $50,000.  At least from a long-term sustainable business point of view.

(Now, we could argue about whether that person making $100,000 will be better off in the long run because they’re building a bigger customer base for all their subsequent books, but if you’re not in fast-build mode that 90/100 ratio is not going to be sustainable unless you can scale the hell out of it. And if the only way you’re bringing in those readers is with heavy advertising and they aren’t staying once you get them…Well…That’s not good either.)

So why am I talking about this? I’m not at either level.

Well, because I needed a reality check on this myself.  I was so proud in June to have my first $1,000+ month. And to repeat that in July and now August. I thought, finally, I’m getting some traction with this. I envisioned a $30,000 year maybe. And that was exciting to me.

And then I added advertising costs into the mix.

Revenue-wise, year four was more than four times year two. But when you account for advertising?  Year four was only 1.25 times better.

I made thousands more, but I also spent thousands more to get there. And even though I’m still net ahead year four vs. year two, it’s not by near as much as I thought it was. And my best month when you account for advertising expenses? The month I released my written to market billionaire romance short story. My second best month? When I completed the other stories in that series and ran a free promo on the first in series.

Good news is that since I started running AMS heavily in July of last year my months have been more profitable than before. But that sure shows me the power of writing to market, because when you do that customers are looking for you. You don’t have to pay to find them.

Author: M.L. Humphrey

I'm a consultant with a focus on financial regulation and a writer with too many pen names.

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