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

Almost every paragraph in your fascinating post could spark another comment, but I'll keep this down to a couple of specific points based on the P&L, rather than on the more general publishing/sales & marketing/returns issues.

I'm a bookseller who also does some publishing -- see www.crumcreekpress.com for more about my publishing work and www.statelyhuangmanor.com for more about me. One of the authors in my publishing program was originally published by Tor/Forge; another one of my authors is currently with Tor/Forge (I have one of her deep backlist titles).

I'm puzzled by the inclusion of "fixed cost to keep the lights on in the factory..." in "typesetting and design." Does Tor/Forge own its own presses? If not, why aren't these costs covered under PP&B? My publishing firm contracts with a printing company (several different ones, actually) to manufacture books. Their fixed costs are theirs, presumably built into the PP&B price that I pay. I can't figure out why your situation would be different.

This question isn't necessarily worth asking just for itself, but it is part of my overall reaction, which is that you're spending way too much here. The PP&B cost isn't outrageous, but $2,700 for typesetting & design? What part is type and what part is design? If there's any cost here at all for type, why is there a cost? The author should have turned in an electronic file that could easily be adapted for design purposes. The last book I published -- my first fiction original -- came in on disk from the author. Even when we have paid -- to re-key a book that we were restoring to print -- the cost is generally $350 or less, start to finish. (Yes, I'm outsourcing to India.)

$4500 for printing covers? We run covers for marketing purposes along with the covers for production, which means we spend $100 to keep the presses rolling just a little longer to produce the extras, instead of the thousands it would cost to run covers twice, once for promotion, once for finished books.

I realize that everything in New York is more expensive, but these numbers sound really high.

Jim Huang
Crum Creek Press / The Mystery Company
www.crumcreekpress.com
www.themysterycompany.com

We separate out our "manufacturing costs" from our PP&B costs. We do print about twice as many covers as we estimate that we're going to need, and sometimes we need even more than that and have to go back to press.

I'm sure the numbers look high to you, but they are real numbers that really exist. The way big NY publishing works, as I am sure you know, is really different from the way small press works.

And we don't outsource to India.

Oh, I believe you that you're presenting your real numbers. My question is more about **why** these are the real numbers. Of course small presses work different from the big NY companies (thank god!). But why? I don't think we're any smarter than you, but I do think that we approach our business with a very different -- and much more positive -- attitude.

Seems to me that the big NY companies try to have it both ways -- on one hand, you all talk about how hard it is to make money on a book. On the other hand, firms like yours do little or nothing to work efficiently. It's not easy for me to make money on a book either, but at least I'm confident that I'm spending my dollars wisely.

In fact, from where I sit (both as a bookseller and a publisher), it often seems like your firm and others similarly situated are going out of your way to spend money inefficiently and ineffectively, at every step of the process. The waste that I see here as a bookseller is especially appalling, especially in terms of sales and marketing.

Maybe this is the right way to ask the question: how much have these numbers changed in the last 5 or 10 years? To what extent have NY publishers taken advantage of all the advances in technology that make it easier and easier to produce a quality book at a much lower cost?

-- Jim

It seems to me you're trying to have a very different conversation than the one

alg volunteered for.

She's trying to convey some fiscal realism to aspiring writers. You're taking it as an opportunity to demand that she defend costs and practices from a side of the enterprise that she already said is outside her area of expertise.

It may well be that we're dumb old lumbering dinosaurs and your operation is one of the tiny mammals that will eat our eggs while we're "doing little or nothing to work efficiently." If that's the case, I expect we'll see evidence of it soon, as your operation, with its "positive attitude," quickly overtakes ours. Meanwhile, I think you're kind of off on the wrong foot with

alg, who didn't set out to explain why Everything In New York Publishing Is Just Exactly Perfect. You know?

Granted. My comments might be considered to be off-topic. But part of what's wrong with NY publishing is that there are certain "truisms" that really aren't all that true. The fact that something costs XX dollars isn't necessarily written in stone. That's my real point.

You can make fun of my attitude -- folks often do -- but I believe that it's a mistake to instruct new writers (or others in publishing) on the inevitably of losing money on most all titles published. As I've written elsewhere, I believe that the notion that a book might lose money has turned into a license to lose money. That's not a good thing, and it's not part of the "realism" that I hope aspiring writers learn.

I don't believe that people in publishing are "dumb." Most folks I know who work in publishing are both intelligent and committed to their work. It's also true that most folk I know in publishing are often scathing in their criticism of the way things are done -- even at their own companies. And, for the most part, feel unable to change the system.

-- Jim

In no place throughout any of my entries, this particular entries, or any comment thread do I tell anyone that it is inevitable that all or most titles lose money. Your comments seem to me to be reacting to something that is not in my text. I suggest you get a livejournal and blog about this yourself.

I may have misread this line: "And this is totally normal. This is an average book."

When you say that this P&L represents the "average" book, what exactly do you mean, then? Do these numbers (or something close to these numbers) apply to 10% of what Tor/Forge publishes in this format? 30%? 60%?

"She's trying to convey some fiscal realism to aspiring writers."

and, as an aspiring writer... she totally did. So, Jim. You are confusing me & a lot of new writers go for the big guys in NYC anyway, because we know we can trust them. I'd rather have the facts, and i don't see negatives here... but I think Anna's post is really positive and informative, ....information that is really helpful to a clueless newbie.

(as in clueless I can't seem to ever log in... this was me, and I promise to stop forgetting~!)

It's not my intention to confuse the issue, and if that's what I'm doing here, I apologize. I think it's probably time for me to bow out of this discussion here.

For a more complete -- and I hope less confusing -- expression of my point of view on all this including the advice I'd give to new writers, visit: http://statelyhuangmanor.com/essays/DSkeynote.htm

-- Jim

I too thought the covers looked expensive - why not just run-on - but you're saying you printed 70,000!? shurely i misundertand. We get run-on covers free in modest amounts.

So, an academic publisher speaks:

1. your cover design/art costs 10x what ours do. But you did say your covers were a major factor in your sales, I know.

2. you pay published price royalties, not on % of money received by the publisher?

3. co-op - we don't have that in the UK, that I know of.

4. print 35,000 and sell 8,400 you're going to lose money - the sums above all become irrelevant!

I especially agree with #4. It's astonishing that publishers do so little to maximize sell-through. In fact, most incentives offered to booksellers -- including co-op -- are designed to get us to over-order. Sometimes, there's a good reason for that and sometimes you do get good results from this. But more often than not, the result is more waste.

More books would be profitable if each copy sold didn't have to bear the costs of two unsold.

-- Jim

Indeed. I liked the line about 'production bumped it up to x print run to save money in case it was a best-seller'. But how many books are best-sellers? If you instead reduced every print run on principle, you would indeed be caught out by the rare best-seller, but so what. The reprint would be slightly more expensive than having some extra copies from the first printing, but you would have saved from all the other printings that didn't turn out to be bestsellers.

Ah, but the mroe copies you make, the mroe you sell, even if you don't seel them all.

suppose, as a very very simplistic model, there are three bookstores in the world, each of which has offered to stock 1 copy of the book. and suppose that there's a 1/3 chance at each store that the book will sell before they decide to "return" it.

so you print 3 copies, send one to each store, and sell 1 of them. ideally, you make enough to money to cover the cost of all 3 off the one sale.

sure, ti looks wasteful. but if you only printed 1 copy, you'd only be able to have 1 store stock it, and then you might well sell one at all.

Ouch. As a book designer, yes, in NY, yes, more or less in trade publishing, though generally nonfiction trade publishing, I'm shocked, yes, shocked at $4500 for art.

The typesetting and design fees seem on the low end, basically assuming only a bit of keyboarding, minimal corrections, house cover/text design, etc.

But the art, oh, my, why not spend that kind of money on an honest to god designer and let them provide the art, etc.? You can buy a serious photo shoot or art from real artists for significantly less and, of course, if you hire a real designer the book will look better than your average TOR book. You can hire freaking _Pentagram_ for a $5000 a book fee.

No, it doesn't solve all problems or assure sales but you are going to get a much better looking book if you move your money around a bit differently and/or let the designer deal with the art.

And, given the percentage of the total production you are spending on art it's probably actually worth rethinking your P&Ls once in a while. What if we toss the art altogether and then spend an extra $1000 on developmental/copy editing, an extra $1000 on promotional swag, and an extra $2000 on design? You might move a few more books and, for god's sake, your books will look better and have a better chance in bookstores.

Not that I have anything against the very fine TOR cover artists, of course.

$4500 for art, actually not shocked at all. Tor covers are original paintings not stock art or designed covers. Talking as an ex-Art Director, I know finding a competent painter or illustrator willing to work with defined concept in mind is not easy to do, and it usually only gets produced once.

It is not like getting an image from a stock catalogue (or istockphoto.com for cheap) and then having a designer do their magic. Has anyone seen many dragons in the stock photo catalogue recently? As an aside:I really think deviantart.com is missing a real opportunity by not offering a stock agency relationship out of the images on their site.

Designers don't deal well with artists, they deal well with art. Tor covers are exceptionally well tuned for the market they are selling for (it may not be your "adult" cup of tea). When I was fifteen and buying as many Tor books as I could get my hands on, it was because the "hero" was buff and the woman was barely dressed.

Ask any designer to produce that and they will fail, or know enough to say you are looking for a "real" artist, not a designer. A painting for $4500 would be cheap at a decent art gallery but somehow if it helps sell 20000 more books it is expensive.

My firm motto as an Art Director is a good cover will not sell a crappy book, a great book will sell itself despite what is on the cover, but if you put a great cover on a great book, it will get the sales representatives behind the book (they may even read a chapter or two) and your initial orders will sky rocket.

In the Tor market, teenage fantasies are driven by the cover, and thus sales are increased. In the Adult Trade Paperback the cover gets the book picked up, the quotes get it opened, but if the random page of writing that customer reads sucks that book is going nowhere.

Leslie Smith

My firm motto as an Art Director is a good cover will not sell a crappy book, a great book will sell itself despite what is on the cover, but if you put a great cover on a great book, it will get the sales representatives behind the book (they may even read a chapter or two) and your initial orders will sky rocket.

YES.

Thanks for jumping in here -- you've explained it better than I could!

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

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