Number Crunching

I’m in this phase right now where I’ve decided to dive back into all of my notes and books from my MBA program to see how I would apply all of that teaching (I had a concentration in Entrepreneurship after all) to self-publishing.

It’s been interesting, because most of the materials address larger corporations and they assume that people have bigger goals than I actually do. I view writing as a lifestyle business not a scalable enterprise. (Although it could be and rumor has it a lot of the top romance writers have turned it into one.) If I could earn $100K a year without getting out of my pajamas or having to work in a team, I’d be ecstatically happy.

So I’m trying to take materials written for managers and corporate executives or the type of entrepreneurs that might seek outside funding and adapt it to self-publishing. Which means I’ve been looking at my writing from a number of different angles.

To give you some perspective, as of the end of October I had earned income on sixty-seven different titles this year. (That number is higher now.) The titles range from fantasy novels to romance novels to romance short stories to non-fiction books about Excel, finances, raising a puppy, dating, grief, cooking, and who knows what else. So I have a large variety of titles to look at. And my question is, which are my best performers? What should I do more of?

The most basic but incredibly flawed approach is to just look at gross revenue. How much money have I earned on each of those titles? It’s the one I tend to do the most often and the one I really shouldn’t do ever. If you focus on gross revenue you may bring in a lot of money and bankrupt yourself at the same time.

In terms of cash-in-hand, my romance and fantasy novels are at the top by a hefty amount.

The next step would be to look at what I’ve earned after accounting for advertising costs and production costs. My fantasy series has very nice covers that cost a pretty penny. My romance series has covers I made myself. I’ve spent roughly the same amount on advertising both series.

When I account for advertising costs (which I do at a series level not a book level), my romance novels drop to third place and my fantasy novels are the worst performing of all of my titles. The number one spot goes to a written-to-market series of short stories that basically sold themselves.

But I can’t stop there. Because this is a flawed approach, too.

I’m still not properly applying costs to each title, because I’m only thinking about direct costs. Covers, ads, etc. But what about the cost of this blog? Or of other expenses related to writing like conferences or my computer or electricity, etc.? (I haven’t done this yet, but the way to do it would be using activity-based costing, probably based on wordcount or hours spent writing each title.)

Also, I’m comparing titles that were published in 2013 to titles that were published in 2017. It’s a little unfair to say, “that’s the better title because it’s made me more money” when the title has been out for four years longer than the next best title that’s been out six months.

Which is why this week I went through and compared month 1, month 1 & 2, and months 1-6 sales for my titles. When I did that I could see that for months 1 & 2 the first in that written-to-market series dominated the list, but one of my Excel guides also made an appearance and the fantasy and romance novels did, too, particularly the ones that were later in the series.

Another interesting thing to look at was the percentage of sales that occurred in the first two months and first six months versus lifetime sales. That written-to-market series where the title was published three years ago? 71% of its lifetime sales were in the first six months. (It’s now permafree but still gets audio sales.) My first-in-series fantasy novel on the other hand? 10%.

Finally, last night I ran across another way to approach things: profit margin. Now, the number I calculated isn’t actually profit margin because I used what I receive from the distributors, which means this is after I’ve paid the 30-65% that they charge to sell my books. But having said that, I have a series with a 95% margin. For every $50 spent, I’ve earned $1000 on it.

This analysis moves a lot more of the non-fiction up to the top and drops the romance novels down because contemporary romance is so competitive you have to fight for visibility.

Of course, it’s never that simple. Because then you have to look at what you can write. It turns out I suck at writing to market, not because I can’t do it but because I can’t do it consistently. At least not the market I wrote to that did so well.

And the trick with fiction is that most writers (not all) need a sort of critical mass of titles to really start seeing results. (My estimate is twelve novels. I’ve heard five in a series from trade publishers.) So looking at the performance of one novel against three related non-fiction titles may not be a fair comparison. You have to figure that you can expand on a fictional world with much more ease than you can expand on a non-fiction area. I’ve written three books about dating for men. I maybe have one more I could write, but that’s it. Whereas novels? I could write those for eternity.

And I also have to consider how replicable those results are. Being in the NaNo StoryBundle has seriously skewed the numbers for those series and titles so everytime I look at them I have to do so with a big asterisk next to the results or back out the bundle portion of the sales.

Also there’s how much time it takes to write each title. If you’re three times faster at writing X than Y then you need to consider that in terms of what you get back when you sell X and Y.

Anyway. I find it fun to think about these things. But, really, the best thing to do is write the next damned book. Product is key. And we as writers never have enough of it because even if someone loves what you do, they’re only going to pay you for that title once. (Or maybe three times at most? Ebook, print, audio.) You have to give them more so they’ll give you more money.

So quit reading this and go write. Like I’m going to do.

Theoretically.

Let’s Talk Pricing

So over on FB a fellow author was essentially calling out trade publishers for how they price ebooks. And they’re not the only person who has ever done that. It happens on a fairly frequent basis that someone questions why trade publishers price ebooks so high.

Usually, the argument that’s made is that it doesn’t cost all that much to put out an ebook. There’s no paper or ink or printing process that needs to happen. So the marginal cost of an ebook is negligible.

But what those arguments all fail to account for is that people are willing to pay that much for those books. Lots of people. Right now The Midnight Line by Lee Child is $14.99 in ebook. It’s ranked number 2 in the Kindle US store. That means somewhere around six or seven thousand people were willing to pay that for that book today. And it’s a book that’ll be in the top of the charts for a while so that many people are going to be paying that much for that book each day for weeks.

What benefit is there to the publisher to drop that price? It won’t improve the book’s rank on Amazon. It’s already #2. Where else can it go?

Well, the argument goes, they’ll get more readers if they drop the price. Okay. True.

But they won’t make more money. And ultimately they may capture all of those readers. The problem with a lot of the “price lower” arguments are that they fail to account for long-term pricing strategies like price-pulsing

Let’s walk through some numbers to show you what I’m talking about.

First, we need a set of assumptions. For our fictitious book let’s assume that there are 12,250 people willing to buy this book. 5000 of those people will only buy the book if it’s available at 99 cents. 2500 will buy it for $2.99 or less. 1000 will buy it for $3.99 or less. Another 1000 will buy it for $4.99 or less. 750 each will buy it at $5.99 or $6.99 or less. 1,250 will buy it for $7.99 or less. 750 will pay $8.99 or less. 250 will pay $9.99 or less.

(I did this in Excel. It’s the chart on the left below. That third column is the cumulative number of customers who’d be willing to pay that price. So everyone would pay 99 cents, but only 250 would pay $9.99.)

Pricing Scenario

Let’s start with the ideal world scenario where we somehow manage to sell our book to every buyer at the maximum price they’re willing to pay. We capture the 99 centers at their price, but also get the $9.99 buyers at their price.

In that scenario, we sell 12,250 copies of the book and we gross $42,127.50. But you have to account for the Amazon cut, so we net $27,756.75.

That’s the ideal scenario. It doesn’t happen, because we have to list our book for sale at one price and even if we change prices over time (as we’ll discuss in a minute) there’s no way to ensure that the customers who are willing to spend $9.99 only see our book when it’s at that price. So in reality we’ll end up with a customer who would’ve paid $9.99 paying $4.99 or even 99 cents depending on when they see the book.

Now, a lot of times the argument is made that you should maximum your sales by pricing low. So 99 cents. That captures the most possible customers. You get all 12,250 customers at that price, no doubts about it. So what do you earn with that approach? You gross $12,127.50, but you net $4,244.63. Same number of sales. But because you priced for the lowest-paying customer, you earn $23,500 less than the ideal scenario.

Of course, as we mentioned, the ideal scenario isn’t likely anyway. So let’s compare the 99 cent approach to another alternative, pricing at $4.99. That captures anyone willing to pay $4.99 to $9.99 but loses anyone who would only pay less than $4.99.  Instead of 12,250 sales you only get 3,750. But those 3,750 gross you $18,712.50 and net you $13,098.75. So you lose 70% of your potential customers but you make three times as much.

Now, what about the final option? Price-pulsing. You list at $4.99, so you’re giving away some potential income there, and then, after you’ve captured those buyers, you drop the price to 99 cents to capture the bargain hunters. Under this approach you sell all 12,250 copies. You do worse than the ideal scenario (because your highest price paid is $4.99) but better than the other two scenarios (because you’re capturing some of the higher-paying market by initially pricing at $4.99 as well as the lower-paying market by dropping the price to 99 cents). In this approach, you gross $27,127.50 and you net $16,044.

So, really, price pulsing is the best approach if you’re willing to be patient about when you capture your buyers.

And for trade publishers with established authors who aren’t struggling for visibility, pricing really high initially and then slowly lowering prices over time is the most profit-maximizing decision. That’s the approach that’s most likely to allow them to stay in business long-term and pay all those salaries and overhead costs and find new undiscovered authors who aren’t established and cant command those prices.

Does that mean self-publishers should price that high? No. There are other factors at play when you’re not Lee Child. Key among those Amazon’s algos that reward early success and seem to have a support level that means that ranking high early means better long-term performance. But it does mean that if you’ve chosen to always price at 99 cents that you’re leaving a lot of money on the table.

 

10,000 Copies Sold

Sometime this last month I crossed the 10,000 copies sold mark. Half of that came in the last six months.

I should be thrilled. I should be dancing on the tables, overjoyed that maybe I’m finally starting to get some traction on this whole writing thing and to figure out how to sell what I write.

But I’m not.

While there is a part of me that’s excited about where I am, I know this might not continue on an upward trajectory. I have a color-coded list of income by month and I can look at that list and say, “Hey, there’s December 2014 when I published my first romance novel and a successful romance short and thought I was on my way. My first $500+ month.” And then I can look at July 2015 and see that I only made $56 that month. And that that was followed by August 2015 where I had a $600+ month. And then December 2015 which was again under $100.

So I know better by now. Some folks do great right from the start and just keeping going, but I’d say that for most writers it’s more peaks and valleys.  Good months and then not so good months.

What makes me even more uneasy is where those sales have come from this last six months. In July, almost half of my revenue for the month was from a single romance novel. In October, that novel is next to nothing for revenue, but I had a successful fantasy promo and non-fiction picked up the slack.

On one hand, yay, diversification. When one track slips, another can catch the slack. On the other hand, where do you put your efforts when from month-to-month there’s no good way to predict which titles will do best?

I like to tell my friends entering the corporate world to just get that first job, put your head down, and do the best damn job you can. Even if it isn’t the ideal position for you, you need to focus on where you are to get forward momentum and move up. You want to tell a good story when you’re ready for that next job, you need to commit to the job you have now.

That should be true of writing, too. Pick one path, focus on it, and follow it until you succeed. And I think it is for many. But what path do you choose when you could easily choose any of three paths?

(Me being me, I just wrote a new story on path four that I should just drop already. Someone please smack me upside the head.)

The other killer about that number is that it’s not enough. I know how amazed I would’ve been in year one of self-publishing to sell 10,000 copies. That’s thousands of people I don’t know who paid cash money for something I wrote.

Think about that for a minute.

Let that sink in.

Thousands of people have paid money for something I wrote. How many people can say that?

But then realize that selling 10,000 copies isn’t enough to make this sustainable. For one year, let alone four of them.

I often ask myself why I stick with the self-publishing. There are so many ways I could make money that would be far, far easier in terms of hours spent and money earned. And I think part of the answer is that it’s so damned hard for me. I have some weird, twisted need to fight for what I get or I don’t consider it worth keeping. If I’m not challenged, it doesn’t work for me.

(Also there’s theI get to work alone and from home aspect of it…)

Anyway, yay for me. Pauses to celebrate this milestone. Now time to get back to it.

20K here we come. And sometime this decade, please.

It Ain’t The Road That Kills You…

It’s the paper walls.

That’s from a song I happen to love by Marc Cohn:

The portion of the song where he says that doesn’t actually occur until the end. (At 3:39 on that video.) If you listen to it you may be asking yourself what on earth that song has to do with anything except people making really strange choices about who they hook up with and when, but stay with me for a moment.

Because, as always, I take something completely different away from that song than probably anyone else would. See, I hear that line “It ain’t the road that kills you…” and I think that the song is about how it isn’t being alone that’s the problem, it’s knowing that others aren’t and being able to hear (in this case) what you’re missing and how knowing what you’re missing is the real issue.

Now to bring this back to writing.

I ran a promo on Rider’s Revenge this weekend. It ends today. And, good news, I sold at least 374 copies of book 1 and 24 copies each of books 2 and 3. The promo isn’t even over yet and it’s already been profitable and sell-through to books 2 and 3 over the long-term will make it more so.

Fantastic, right?

Except I kind of felt like crap about it the last two days. Because part of the promo was an international-only Bookbub. And according to their site, the average number of sales from this particular list should be 550, but I’m only at about 300 off of the Bookbub.

It paid for itself. And I think I’m still missing Google sales and maybe even some iTunes sales. But I’m not going to hit 550. Which bummed me out.

I had a successful promo. I made a profit. I hopefully have a couple hundred new fans. And yet…knowing that others have done better running the same promo spoiled it for me.

It’s like we’re all trying to hike a mountain here. And I know that as long as I keep going and putting one foot in front of the other that I’ll get there eventually. But it’s harder when someone breezes by like there’s nothing to it or the person you started the trail with leaves you behind because you’re going so much slower.

(Real life experience: I hiked Mt. Quandary, a 14er, years ago with a couple co-workers. They were both in excellent shape and left me behind after the first hour or so. But I made it to the top. Eventually. Just in time for them to be ready to turn around and head back down…)

It’s easy to always be looking to others and feel constantly dissatisfied.  Because there will always be someone selling more, getting more reviews or better reviews, or signing high-profile deals. But you can’t do that. It’ll kill you.

Step back and remind yourself what you have done.  See how far you’ve come. Embrace the positives.

(I say as I continue to sit here and sulk.)

Remember, it isn’t the journey that will kill you, it’s comparing yourself to others and letting their successes (or how you feel about them) defeat you.

The NaNoWriMo Writing Tools Bundle Is Here (And I’m In It!)

So this is the bit of news I was alluding to yesterday. My books, Excel for Writers and Excel for Self-Publishers, are both part of the 2017 Nano Storybundle. For $15 you can get both of my books as well as…

  • How to Make a Living With Your Writing by Joanna Penn
  • Hurting Your Characters by Michael J. Carlson
  • Writing as a Team Sport by Kevin J. Anderson
  • The Author’s Guide to Vellum by Chuck Heintzelman
  • Time Management by Kristine Kathryn Rusch
  • The Magic Bakery by Dean Wesley Smith
  • Business for Breakfast Vol 6: The Healthy Professional Writer by Leah Cutter
  • Q&A For Science Fiction Writers by Mike Resnick
  • The Unofficial Scrivener Workbook by Michael J. Carlson
  • Story Structure and Master Chapter Outline Workbook by C. Michael Jefferies
  • Blood From Your Own Pen by Sam Knight

Look at that list. Joanna Penn who has a brilliant podcast. Kevin J. Anderson who co-wrote the Dune series and is the mastermind behind the Superstars Writing Seminars. Kristine Kathryn Rusch whose Thursday business blog posts are a must-read.  And Dean Wesley Smith whose classes on depth and character definitely strengthened my fiction writing.

And those are just the ones that happened to be in my list of web links. I am honored and humbled to be amongst their number. (And proud enough of the Excel guides that I think they hold their own in that list.)

You’d have to pay $10 to get both of my books. For $5 more, look what else you can get. (And, of course, you can always pay more if you think that’s warranted since part of the proceeds are also going to charity.)

So, what are you waiting for? Go buy yourself some brilliant writerly wisdom while it’s cheap.

(I’ll be reading all the books myself and probably mentioning a few here on the blog during the next two months while the books are available. And I’ll also tell you how this all came about in another blog post, since that’s what would matter most to me as a self-publisher.)

AMS Ads and Names With Initials

The other day someone mentioned that they’d run an experiment with names that use initials (like R.K. Thorne) and that they’d determined that you get the most impressions from AMS ads if you leave the periods out of the name.

I haven’t done as systematic of an experiment as the individual who posted about it, but I had been thinking that AMS ads do behave strangely with author names that have initials in them and had wanted to go look at my results to see what I could see.

While I generally agree with that person’s conclusion, I’m not sure for me that it was quite as black and white.

So let me share some numbers.

One of the authors in my fantasy novel’s also-boughts is R.K. Thorne who is listed on Amazon as R. K. Thorne, which interestingly seems to be the one variant I hadn’t tried. At various points I had used r k thorne, r.k. thorne, and rk thorne. And the clear winner was rk thorne which had almost three times as many impressions as r.k. thorne.  The r k thorne option had almost none.

Another one though isn’t as clear-cut as that.  It’s T.A. White who is listed that way with no space between the two letters. In that case I had at various points used t a white, t.a white, t.a. white, and ta white.  The one that had the most impressions was the one with the typo, t.a white, followed closely by t.a. white and ta white which were almost equal.  The last one, t a white, had the least. (One reason for the difference might be because when I type ta white into the Amazon search bar it shows towels instead of books.)

One more example would be K.A. Linde.  I had tried ka linde, k a linde, and k.a. linde.  By far the best performing of the bunch was ka linde. Neither of the others did much.

The problem with my numbers is that I didn’t do this in a controlled experiment where the bids were the same and the words were started at the exact same time. What I think I’m comfortable in saying is that if you do go without a period in there don’t bother with spaces between the two initials.  So use ka linde not k a linde or rk thorne not r k thorne.

Also, if you do have names with a period in them anywhere, definitely be sure to test out variants of the name without the period included.  I have a few with full first names and a middle initial where dropping the period from the middle initial seems to have resulted in more impressions as well.  (But others where it didn’t.)

Random Thoughts on Ethics and Regulations

So my day job, the one that actually pays bills, involves regulations. I used to enforce those rules and now I consult for companies that need to comply with them.

I’m in an industry that has high barriers to entry. Anyone who wants to start a company in this field has to go through a months’-long review process and prove themselves to be qualified and without known criminal issues.  Anyone who wants to work for a company in this field in customer-facing sales roles also has to prove a certain amount of knowledge about the product as well as about the rules.

Which is not to say that the industry is without its ethical lapses.  I brought more than one case against individuals who out and out engaged in horrible activity involving vulnerable people and then sat there and lied to me about it to my face while on the record.  People with zero conscience.

Those people definitely existed and are attracted to industries like mine because of the amount of money involved.

But far more common were the ones in the middle.  The ones who would never set out to do something blatantly against the rules, but who end up doing so anyway either out of ignorance or greed.

I can’t tell you how many times I heard over the years, “But X person does it and they’ve never gotten into trouble” or “But we’ve been doing it this way for years.”  Which was true in some instances.  One of the biggest investigations I was part of involved thousands of companies who had been doing something wrong for years that cost their customers millions if not billions of dollars.

But you know what?  When that was finally discovered, it didn’t matter that everyone had been doing it that way for years.  Perhaps it did influence how the situation was handled, but it didn’t keep it from being handled. And once it was discovered and people were adequately informed of the issue, they were expected to comply.

The problem with regulation is you can never list everything people shouldn’t do. But if you try to use a principles-based approach you will soon find that your idea of “fair dealing” or “best efforts” or “good customer experience” are not the same as someone else’s. What seems obvious to you is not obvious to them.

You can be damned sure that there will always be people in every industry trying to find the cracks, to get that little advantage that will let them “win”.  These aren’t the ones who flat out ignore the rules (there are always those as well).  These are the ones who push right up against the edge or find the one place where you haven’t been clear enough or aren’t looking close enough and exploit it for all it’s worth.

Right now I spend most of my time dealing with an industry with absolutely no barriers to entry–self-publishing. And there you see this play out every single day.  Someone will say, “Well no one told me I couldn’t scrape content off the internet and package it as my own and then click-bot my book up the ranks and get a hundred fake reviews on it so that Mary Sue in Idaho thought it was a legitimate book…”

No, they didn’t.  Because they thought it should be obvious that that was a shitty thing to do.

The problem with self-publishing is that bad techniques spread like wildfire, and that the big enforcer, Amazon, is slow to act. So by the time something spins out of control there are hundreds or thousands of people, some who just didn’t know better, engaging in it who then get slapped hard by losing their accounts or having their books pulled.

Having seen a number of these conversations happen, I don’t know how you even teach people to see what’s “right”.  A lot of these scenarios that have cropped up (like offering Book A for sale for two weeks and then changing the content out so it’s hardly the same but keeping the reviews from Book A), seem pretty obvious things you shouldn’t do.  But each time one of these scenarios crops up I find myself amazed by the number of people defending it. Either as perfectly legitimate or what they have to do to stay competitive.

And it’s just…Sigh.  More than I can discuss in one blog post.

So let me try to sum something up here:

Regulations and rules are annoying. And some are poorly written. But they exist because at some point someone did something that made them necessary. And if you don’t want there to be more regulations or ridiculous requirements or costs to what you do, the best thing to do is to always step back and ask not “Do the rules allow me to do this?” but instead “Does this pass the smell test? If I had to sit across the table from someone like a judge and tell them exactly what I’ve done without providing justifications or excuses, would they agree with what I did?”  If the answer is no, don’t do it.