5 Ways to Grow Your Author Profits
All authors are tortured souls. Brooding in dressing gowns, we only ever get dressed to visit a coffee shop and constantly pull crazy stunts in the name of “research” and “authenticity.” All of us drink heavily and wake up every night to scramble for a notepad where we jot down ideas. If our families discussed us, they would use words like “scatter-brained” and question our unhealthy fascination with typewriters. These things are all true…
We authors aren’t walking stereotypes. In reality, millions of us exist worldwide, each with unique personalities, habits, idiosyncrasies and worldviews. Some authors exhibit stereotypical traits, but most of us live ordinary lives. What’s interesting, though, is that even the least stereotypical writers sometimes believe the stereotypes. For example, being creative, some of us think we can’t master numbers and, as a result, neglect our finances.
This belief stops authors taking command of their own businesses. Thinking they could never create a budget or calculate unit costs, they opt to hand over their production and marketing power to publishers so they can “focus on the art” despite only needing elementary maths. Even when they self-publish and earn large royalty sums, many struggle and spend everything they earn because they never bother to consider return on investment.
In reality, creativity and financial prowess aren’t mutually exclusive, so don’t believe the stereotypes. You can be astoundingly creative and turn a profit. Moreover, track your finances accurately and you can even scale your creative scope without going bankrupt. Look at Mr Beast on YouTube or Brandon Sanderson on Kickstarter. Both have multi-million-dollar businesses and fans laud them for their creativity. In today’s blog post, we’ll cover five ways you too can achieve a similar feat, scaling your profit potential without losing your creative mojo.
You might think relying on yourself is a mistake. That a large publisher would apply a level of marketing muscle to your books that you could never achieve alone. The truth, though, is that most large publishers play a numbers game; they publish hundreds of authors every year and only advertise the known sellers and those that show early promise without help. The rest languish, neglected. What’s more, according to Society of Authors’ research, publishers typically pay as little as 7.5% of a book’s cover price to most authors. Admittedly, they offer as much as 25% of ebook “profits”, but the anticipated pay-out often shrinks due to fees hidden in their contracts.
Yes, scoring a publishing contract can work out best for some authors, but most miss out of a huge slice of the profit they could make simply because they would rather have “expert” validation than learn how to publish themselves. Indeed, compare the paltry royalty percentages publishers offer most authors to the potential 30% to 95% you can make self-publishing and it’s easy to see why many authors prefer to go it alone. They understand that nobody cares more about their books than the author and that they can increase their odds of making meaningful money by sidestepping a middleman. Rather than risk neglect, they can prioritise their own books.
“Ah, but indies have to cover their own costs. What if you pay then can’t shift any copies?” you might ask. Yes, that’s technically true. But what makes you think authors who have publishers don’t also shoulder marketing costs? Ask any traditionally published author and you’ll hear stories about how they’ve taken out newspaper ads, lost money travelling to speak at events for free and, in some cases, even paid a publisher to run online ads on their behalf. As for production, yes, publishers pay for editors and designers but, in doing so, they sometimes cut corners, favouring one book over another. Many trad authors hate their covers and don’t sell as a result.
Controlling the process guarantees you a well-produced book. What’s more, you can do it without risk if you’re savvy. One way you can do this is to test the market for demand in advance. Running Google ads, for example, Tim Ferris tested competing ideas with readers for his first book. Cue The 4-Hour Workweek and 2 million book sales. Meanwhile, Brandon Sanderson achieved $42 million dollars in pre-funding on Kickstarter this year before sending out a single book. For you, getting Patreon subscribers might be the answer. On there, some authors guarantee a $5,000 minimum payday for every book. Guarantee demand and you can guarantee profit.
Many authors dream of having the sort of book launch you see in movies. An event in a big bookstore. Free cake and wine. A loyal cosplaying assistant. A hundred attendees. Everyone sitting down to hear you speak. The truth, though, is that these sorts of events are difficult to actualise unless you’re a celebrity. Most authors who try might pull it off once, filling seats with friends, family and co-workers, but it’s rare for them to see that level of support for every book. In most cases, cake, wine and unsold copies force events like these to run at a loss. Not only that, real-world events aren’t scalable, so the potential profit you can make from a successful one is capped.
Profit-wise, online launches tend to be better, with low overheads and a global audience. Instead of printing tickets, you can send one newsletter. Instead of hiring a venue, you can create a Facebook group. Rather than printing copies for a table, you can link to a retailer that uses print-on-demand technology. And instead of paying for a costume for your cosplaying assistant to lure passing trade, you can run pay-per-click ads to targeted readers who buy, read and review favourably in your genre. An online launch often doesn’t feel glamorous, but they come with less financial risk and get exponentially more profitable as you build your author platform.
In a recent blog post here on the SPF blog, we explored money mindset hacks for indie authors — the sorts of instinct-defying logic that turns struggling authors into successful authorpreneurs. One takeaway was the idiom:
“Turnover is vanity, profit is sanity, cash is reality.”
Primarily, it encourages you to focus not on how much you make but how much you keep. For example, an author turning over $200,000 a year and making $80,000 profit is better off than one that turns over $500,000 but only makes $40,000 profit after squeezing their margins to reach more readers. Yes, the second scenario looks less impressive, but cutting costs sometimes makes sense because when it leads to higher real profits.
However, this process can also work the other way. Some authors turning over $500,000 with a $40,000 profit, for instance, could benefit from increasing spend. Say, for example, this is you and $460,000 is your production and marketing spend. Could you achieve a higher ROI with the same spend ifyou outsourced routine admin and had more time to test ads? Many do. Hence, while spending $20,000 on a virtual assistant would increase your total spend to $480,000, it could also help you increase your turnover to $600,000 and boost profits to $120,000. Sometimes, you don’t need to carve out a bigger slice of pie; you need to buy a bigger baking dish.
Self-publishing online revolutionised the industry when companies like Amazon and Apple empowered authors with the ability to reject a 10% cut of book sale RRP in favour of up to a 70% cut. Doing so meant that you could make up to seven times as much profit for the same amount of effort. That said, the industry is always developing. And some authors have discovered ways to squeeze even more profit out of book sales than they could when they first started — sometimes as much as 95% of RRP. How are they achieving such ridiculous profit margins? They sell direct, cutting out retailers altogether and funnelling readers to their own websites.
There are lots of ways to do it. For example, providing you already have a proven sales track record, you could get a small print run and sell copies directly to readers using an ecommerce solution like WooCommerce or Shopify. Add BookFunnel’s delivery system to the equation and you could also sell ebooks and audiobooks in a similar way, but with added reader-specialised tech support so you don’t have to deal with coaching readers to sideload the files they buy onto devices. Working in this way will not only skyrocket the potential profits you earn per sale but also award you a huge amount of flexibility and control over the reader shopping experience.
Some of the tactics this article outlines might seem out of reach if you’re new to authorship or the idea of selling products online. However, what doesn’t make sense today becomes perfectly clear with practice. Eat the elephant one bite at a time and you can build a highly profitable author business. Yes, the learning curve will be steep and the work is frontloaded, but it becomes second nature as you gain experience. Give it time and, eventually, you can work less, make larger profits and focus more time on the activity you love: writing books.
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