If you want to make the most financially responsible decision when it comes to publishing your book then you better do your research!
There’s some basic information you’re absolutely going to need if you want to make an informed decision about which publishing route to take.
You’re going to want to create your own publishing “business plan” for yourself. Unlike a traditional business plan, you probably don’t need to create a boring 100+ page document and show it off to potential investors. You will, however, need to estimate your costs of doing business and your potential revenues.
You’re going to need to understand the “inputs” in your publishing business. This is where most authors fall short. They have no idea what they’re actually going to need to put into their publishing venture before they get started.
Let’s start by talking about the major inputs you’re going to need and the costs you will likely have to bear if you decide to go the traditional publishing route first. Later in this article, we’ll cover the costs of self publishing.
Although traditional publishing is often considered to be “free” and more “financially wise” than self publishing, there are huge costs to traditionally publish a book that most authors never take into account:
- Opportunity cost
- Travel, networking and “marketing” costs
- Lost profits (publishing delay and fees)
1. Opportunity Cost of Traditional Publishing
There is a huge investment of time that goes in to getting a book published traditionally.
- It takes a lot of time and usually a financial investment ($399.50 per year for an annual subscription to LiteraryMarketPlace.com) to research the key literary agents in your market or genre in order to reach out to them and start pitching your book ideas.
- Assuming you succeed with this first step of finding a literary agent for your book, you’re going go have to sign a contract giving up 15% of your earnings for the life of that deal if you do a traditional publishing deal (This is a 15% reduction in your top line revenue. This translates into a more than 15% reduction in your profits, because your literary agent will not bear any of the costs required to find the agent in the first place, nor any of the other publishing and marketing costs you will have to pay out of pocket).
- Even after you find an agent, it could take months or years to find a publisher to buy your book (lost time).
- Even after you sign a traditional publishing deal, it could take months or even years for the book to finally be available for sale (more lost time).
All that lost time and money has an opportunity cost attached. You could have taken that time and money and invested it in simply writing more books or in growing your audience and influence in your market.
2. Travel, Networking and “Marketing” costs
Most authors seeking a traditional publishing deal invest an enormous amount of time and money networking, traveling to writer’s conferences, workshops and educational seminars, and “marketing” themselves and their books to literary agents and publishers in hopes of getting a book deal.
I know many authors write books and seek to get them published as a passion project or hobby and not as a business decision, but it is irresponsible financially to spend most of your life savings (as many aspiring authors have) just to travel to writer’s conferences and pitch your book to someone hoping a deal will appear without a clear understanding of how much you’re investing and what your likely return on investment will be.
3. Lost Profits from Publishing Delay
When a self published author is ready to publish a book, they can start selling their book and earning royalties from sales within a week for the eBook, within a month for a print book, and often within 30-90 days for an audiobook.
In contrast, the average time it takes for an author to pitch a book idea and get it published and available for sale to readers is around two years (24 months). Losing two years of sales (on average) every time you decide to publish a book traditionally comes with an ENORMOUS cost of two years of sales.
When you add up all the costs of publishing a book traditionally, you start to see the real economic toll it can take. Traditional publishing is definitely not “free” for the author.
If you believe your time is worth at least $15 per hour and you have a reasonable ability to promote yourself and your books on your own, when you add up the costs of publishing a book traditionally they will likely exceed all but the largest of advance payments you could receive from a traditional book deal.
(I have several author friends who are fairly successful who say they would never even consider a traditional book deal anymore unless they were getting an advance of at least $100,000 to $500,000 because they know they can earn more self publishing. These authors understand the real costs associated with traditional publishing and take them into account when making the decision whether to self publish or traditionally publish their next book).
The Costs of Self Publishing
So far, we’ve mostly talked about the costs an author faces in traditional publishing.
For self published authors, there are several expenses you will have to budget for.
I believe most authors will be better off financially most of the time when they self publish rather than traditionally publish their book. You’ll be able to make your own calculations and estimates with the resources in this article and see what’s best for you.
Here are the general investments a self published author would need to make to in order to publish a book:
- Networking, Travel and Education
- Raw Publishing Costs (Editing, Formatting, Cover Design, etc.)
- Marketing Costs
1. Networking, Travel and Education
Self published authors often need education and networking to help them get their book published and selling well.
However, I would say that the typical self published author does not need to invest nearly as much time or money in this education or networking because they are not attending events simply to sit down for a 10-minute pitch to a literary agent in hopes of signing a deal.
Usually, just attending a few writer’s conferences or workshops is all a self published author will need to learn the basics and get their book published. Smart self published authors will continue investing in their education by staying up to date on the latest book marketing and promotion trends, but they can often use the earnings from their book sales to pay for some or all of these educational costs.
Because self published authors can get their books published so much more quickly, they have a good chance of breaking even much more quickly on their investment than most traditional authors would.
2. Raw Self Publishing Costs
Self published authors usually have to hire professionals to help them get their book published in a professional manner. Your main costs for self publishing will usually be the fees you pay to your team to help you get your book published professionally.
Every author should have their book professionally edited.
As a self published author, you have to pay for editors out of your own pocket. Most self published authors spend between $500 and $10,000 on editing. Costs vary dramatically depending on which editor you hire, how many editors you hire, manuscript length and the type of editing needed.
How Much Does a Book Editor Cost?
There are a few types of editing you may need. Often, editors will specialize in a specific area. If your editor says, “I do it all,” that does not mean they can and will do the kind of job you need them to.
Try to be as clear as possible upfront about what kind of editing you need and ask for a rate that reflects your needs. You will often need to hire two or three editors to get your book ready for publishing, especially for first-time authors.
Developmental Editing: Usually $5-$10 per page, or a flat rate of a few thousand dollars
Copyediting: Usually $0.50 to $2 per page (a “page” often means 250 words in the publishing industry). Many editors charge by word count or may quote you a flat rate instead.
Proofreading: Usually $.30 to $2 per page.
Please realize that the actual cost you end up paying an editor may vary wildly from the average or from the prices quoted here. If you’re writing a technical book and require an editor who understands complicated medical terminology, you’re probably going to pay more.
Another tip when it comes to hiring an editor: Most first-time authors hire an editor a bit too early. If you need a developmental editor but haven’t even spent the time editing your own typos or grammatical errors, your editor will be spending much more time doing busy work rather than helping you improve the book.
I highly recommend you perform several rounds of edits yourself before hiring your first editor. The harder you work on your book before you send it off, the more value your editor will be able to bring to the table.
Formatting an eBook may cost anywhere from $5 to $250 depending on whom you hire.
You can also simply format your eBook yourself and save yourself the financial investment. We have created a free video training course that walks you through the process of formatting your eBook for free at ebookpublishingschool.com
Most students find it takes about two or three hours to learn the formatting process from the training video and finish formatting their book so that they are confident it will look professional when they publish it on Amazon Kindle.
Cover design can cost anywhere from $5 to $500 and up depending on whom you hire.
The cheapest option I’ve seen is hiring a designer on Fiverr.com. Most book cover designers at Fiverr do a fairly bad job much of the time (as you can expect from the $5 price tag). However, there are a few cover designers at Fiverr that have produced some pretty impressive book covers at a very low price.
You can find some very good book cover designers at Upwork.com, a site for connecting freelancers with people looking for someone to do a job. You can ask to see the portfolios and past work of several designers and get a detailed quote for your project before making the decision to hire the right designer for you.
Even if you’re only considering self publishing at this point, you should talk to several designers and get quotes so you can estimate what your costs would be if you decide to go the self publishing route.
Print-on-Demand Costs (POD) Publishing
When publishing own book with Print-on-Demand services like Createspace.com will often need to buy an ISBN (Createspace has a free ISBN option option, but I don’t recommend it).
Buying just a single ISBN will cost you $125. You do get discounts for buying more ISBN’s at a time (Bowker Identifier Services currently offers 100 ISBN’s for $575, but TCK Publishing was able to buy 1,000 ISBN’s for just $1,000 a few years ago. You can call Bowkers to see their pricing for larger lots of ISBN’s to get an even further discount if you expect you will need more than 100 ISBN’s).
(Remember, you don’t need an ISBN for eBooks or audiobooks).
Formatting a print book usually costs anywhere from $20 to $250 depending on whom you hire.
Cover design for the back and spine of your cover once you have an eBook cover designed is usually just a few dollars extra. If you hire one designer upfront to design the entire package for all book formats (eBook, audiobook and print), you may get a better deal,
Audiobook Narration and Production
The costs for producing audiobooks have dropped dramatically in the past few years. Most author can hire a professional narrator and producer at Audiobook Creation Exchange (ACX) for $500 to $5,000 largely depending on the length of the book). In most cases, the quality of the audiobook will be just as high as if it was published by a traditional publisher.
3. Marketing Costs
When you self publish your book, you don’t have a publisher supporting you to help with marketing. (Yes, I know, most traditionally published authors get no marketing support from their publishers anyways).
Even so, it’s especially important for a self published author to create a reasonable marketing budget because you are the only person responsible for promoting your book!
For most authors, I would say a marketing budged of $500 to $5,000 is plenty. First-time authors who invest more than $5,000 in marketing often waste a good deal of their money on poor marketing investments. Your goal should be to find marketing strategies that have the highest return on your investment.
A few marketing investments I’ve found to provide a great return on investment and a significant boost in sales at least 80% of the time we’ve tried them out include:
Other common marketing investments authors make that sometimes may provide a great return on investment for some people include:
- Hiring a PR firm (You can listen to some of our interviews with PR experts to start learning the basics of getting book publicity for free on The Publishing Profits Podcast show)
- Amazon Merchant Services (AMS) Ads for promoting your book on Amazon
- Using online paid advertising like Google AdWords of Facebook Ads
There are many, many, many more ways to market your book. Many book marketing strategies may only require an investment of time. Many marketing strategies may take weeks, months or years before they start to generate book sales, such as Search Engine Optimization (SEO) or social media marketing.
The marketing strategies mentioned above are by no means meant to be exhaustive. They are, however, the marketing strategies that, in my experience, tend to work the best when they do work. I’ve seen some authors sell thousands of books directly attributed to using the above-mentioned strategies.
It All Depends on Your Situation
Now that you have a good overview of all the major costs involved in getting your book published through self publishing and the traditional publishing route, you can start to add up the numbers for yourself and get a better idea of which route will be more financially responsible for you.
However, a quick word of warning every author should know first:
You can crunch all the numbers in your spreadsheet and do the math, but you will never be able to actually predict when a book deal will happen, how many copies you will sell, or even whether or not you will be able go get a book deal at all.
This, for many authors, is the greatest publishing cost of all – the uncertainty that comes with not knowing whether you will ever be able to get a traditional book deal. The numbers are scary: at least 95% of books authors pitch will not get a traditional book deal. Of those books that are traditionally published, 85% of the time the author will never “earn out” their advance, meaning they will never receive royalty checks from their books.
No matter how educated you are or how much information you have, you will never be able to predict the future.
At the end of the day, publishing a book is a risky venture, regardless of what route you choose. Authors today must be entrepreneurs to get a book published no matter what road they travel.
In my personal experience, most successful entrepreneurs don’t usually make the most “financially responsible” decision. They usually do what feels right in their gut, and then work their butts off to make the financial results show up.
If you love what you do, if you work your butt off, if you’re willing to go the extra mile to create the best book you possibly can and promote the heck out of it, you put the odds greatly in your favor.
The sad truth is most authors aren’t willing to work that hard to make things work.
Doing the Math for your Custom Publishing Plan
You can create an Excel spreadsheet to estimate your costs of self publishing and traditional publishing so you can run the numbers yourself and see which makes more financial sense for you.
Here are a few quick financial notes that you should take into account when running the numbers:
- When a publisher pays you an advance, they are usually paid over a two-year period (and remember your agent gets 15% off the top)
- Your revenue from a publishing advance, royalties, rights sales, etc. all count as pre-tax income. There’s a spot in the spreadsheet where you can input your tax rate to calculate your income (or loss) after taxes.
- If you self publish, Amazon will send you royalty checks or transfers direct to your bank account sixty (60) days after the end of the month.
- Based on our experience, most self published authors will get 70-80% of their sales from eBooks, 5-15% from print, and 10-20% from audiobooks.
Is Self Publishing or Traditional Publishing Better for You?
Here are some questions to ask yourself to see whether traditional publishing or self publishing may be the right choice for you:
What publishing route feels right to you?
What publishing route are you most afraid of?
What publishing route makes you the most excited?
Do you have the cash and time you will need to invest in getting your book traditionally published?
Do you have the cash and time you will need to self publish your book?
A year from now, how will you feel about your decision to publish your book?
Five years from now, how will you feel about your decision to publish your book?
Ten years from now, how will you feel about your decision to publish your book?
Are you willing to do whatever it takes to make your book a success?