alg | P&Ls and how books make (or don't) money

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demystifying publishing

P&Ls and how books make (or don't) money

Profit & Loss/Profitability & Liability: How Books Make (or Don't Make!) Money

A basic outline of what happens when an editor buys a book and wants to publish it. This is very much a basic look at publishing and publishing finance, with some explanation of terms commonly used by the marketing and sales departments.

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Now I completely understand and appreciate why it's so much easier to get published with epress and why a book from a new author has to be letter perfect before it can be considered by a NY publisher. I don't blame the poor editor who gets burned then is hesitant to sign on any more new authors.

On the other hand I am even more scared to submit my story to a regular pub. Yikes!!! Poor editor, poor Aeryn Sun. Is it ever really worth it?

And at $5K, how much advertising does that buy the new author. Yes writing is an art, but self-promotion is part of today's business.

I'm embarrassed to admit how far into this post I had to read before I realized Crichton is an idiot was about John Crichton. I was thinking "A romance about global warming? Okay."

Thanks for this post.

This is helpful, and mildly scary. (Everything is scarier with math.)

Thanks.

Thanks, for this and other posts. It is useful to me, and it is a useful resource for me to point other people at, and I greatly appreciate it on both counts.

And am I a bad girl if I look at "hc/mm" in a demystifying publishing post, and read "hurt/comfort slash" for a second before the sensible part of my brain takes over?

"hc/mm" in a demystifying publishing post, and read "hurt/comfort slash"

hahahahahaa!!!!!!!! omg.

Holy Hockey, that's a lot of money to shell out for a no-name nobody!
At least your break down makes me feel less guilty for spending over 100 bucks a month on books now (though I am still antsy about buying new authors).

Unlike every other writer in the world, I love math, so I was practically drooling here. I'm glad my book is with a very small press; if I'm doing the math right, I will be a success if I sell 100 copies this year. (It's poetry.)

Makes the economics of printing banking products seem downright simple. I thought we were being dumb not to charge the banks until we ship their items (we hold them in inventory, sometimes for a year, for free! boggles the mind - apparently it's a selling point) but at least we know we'll get paid for everything we print, eventually.

I've got to think editing Aeryn Sun is much more interesting than editing monthly billing statements, though.

I'm not afraid of maths, but I have a degree in maths and physics, and therefore probably count as a statistical anomaly.

(And I still can't work out why my brain appears to be hard-wired to produce political sf with a gay romance plot instead of the stereotypical hard sf.)

If you think this theoretical amount is a lot, check out this:

http://www.usatoday.com/life/books/reviews/2006-03-29-how-opal-mehta_x.htm

How Opal Mehta Got Kissed, Got Wild and Got a Life by Kaavya Viswanathan -- $250,000 advance.

In one of your responses you said (paraphrasing) that it would be worse for an author to have a print run of 40k, vs having a sell thru of 40k (wasn't clear if you meant 40k out of 200k, meaning a 25% sell thru.) Which confuses me.

A friend of mine with a low print run on her first trio of s.t. books book but a fabulous sell-thru on all 3 is hitting a wall trying to sell elsewhere. Though her books' average initial sell thru was in the 65-70% range, because the print run was low (40k'ish) nobody else will touch her. And the explanation she has been getting is the high sell-thru doesn't outweigh the low print run.

Can you explain a little more about why it's better to sell 1 out of 3 books with a print run of 120k, rather than 2 out of 3 books with a print run of 40k?

Thanks, this has been fabulous!!
Leslie

Wow.... who knew I'd learn so much from LJ?

But this is the stuff I'm interested in so I'm glad you're posting about it. I never knew it was that complex or involved I guess. Kind of scary for both a publisher and a writer.

That's what I've been wondering. Is it actually in the author's long-term interest to try and get a smaller advance the first time, increasing the odds of earning out?

I make a good living as a small press e/print author and I understood when I expanded into the NY market I might be taking a cut in pay on those books, at least initially, but I didn't understand why. Rather simplistically, my mind stuck on the formula of larger print run/sell thru equals larger sales. All things proportional, the larger print runs should make up for less percentage per book. After going through this a few times, I now understand why that's not true.

Thanks so much for explaining this.

I would say yes.

Some editors would say no.

Some agents would say yes.

Some agents would say no.

This is the kind of question that is very situational.

For example, when Tor started its paranormal program, we gave small advances, even to our biggest names. However, by doing so, we created a pool of "extra" money that we could work with -- sure, it was money that didn't exist yet, but we talked a good game and walked a good game, and used that money to launch the books.

However, at houses that are not Tor, it is very likely that the smaller the advance is, the less work anyone will do on it, and the less effort anyone in a department that isn't editorial will put into it.

See? Situational. This is where a smart, savvy agent can come in handy.

My pleasure! I'm glad you understand it!

Some part of you had to want to know -- you did click on the cut tag!!

How many books with gay main characters are on the shelves right now? Plenty. Losing Wal Mart doesn't mean losing everything -- heck, 90% of all SF and fantasy titles never see a WalMart shelf. They're packaged in a different way and sold to a different audience. As I said in the post -- this is just one example of one publishing model.

It's easier to get published by an e-press for a lot of reasons.

Whether it's worth it or not is something you'll have to judge for yourself!

$5000 buys you a good deal of promotion if you spend that money wisely -- target readers, rather than booksellers. Build a good website, get a good mailing list going... or don't do anything at all. Self-promotion is important, but if your books suck, nothing is gonna help that.

HAH.

You're welcome. :)

The math isn't so bad when you realize it's just very very basic algebra!

You're welcome. :)

LOL!! Well, I had to go through it four times and it might be more accurate to say I'm assuming I understand it now. But I totally understand why my formula didn't work.:-)

I hope you sell waaaay more than 100 copies! GOOD LUCK!!

I watch scary movies, too, and hold up my hands on roller coasters.

I don't think I said that. I think what I said is:

+ A 40,000 copy print run isn't good if you're at a house chopping midlist authors (unless you are at a small press, in which case you are their bestseller),

+ but a 40,000 copy print run isn't that freaking bad, especially if you have a good sell through,

+ and a 40,000 copy sell through is pretty good unless you are printing 200,000 copies. If you are printing 200,000 copies, and selling 40,000 copies, your sell through is at 20%, and that sucks.

You're not learning from LJ, you're learning from meeeee!! But now you can write your paid LJ account off as a business expense. ;)

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P&Ls and how books make (or don't) money

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