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Week 11: Which publishing path is most profitable?

I’ll tell you now: This is a trick question. But writers often ask this question, and people argue about the answer, especially when discussing the merits of traditional publishing versus self-publishing.

Some may argue that self-publishing is more profitable because authors earn a much higher percentage of the retail price—typically 70 percent of the ebook price.

Others may argue that traditional publishing is more profitable because the author is not shouldering any expenses of publication. (And many receive an advance that far exceeds what they will eventually earn through sales alone.)

But the frustrating answer is: There are far too many variables to offer a definitive answer to this question, or one that would apply to every author working today.

However, a few rules of thumb to consider:

• You have to sell fewer copies as a self-published author to earn the same amount as a traditionally published author (if looking at royalties alone).
• Expenses dramatically affect profits. That’s stating the obvious, but it’s often forgotten, especially by authors who pay tens of thousands of dollars to hybrid publishers and other paid publishing services.
• Many traditionally published authors don’t earn out their advance. Any additional earnings beyond the advance come from rights sales or affiliated activities, like teaching, speaking, grants, etc.
• Most successful self-published authors have many titles on the market. Only the most remarkable outliers succeed and profit off a single book, and then it’s usually because they have a significant platform or business to support the book.

Self-publishing becomes enormously profitable when you’re regularly hitting Amazon bestseller lists; once you reach that stage, you can probably secure an agent and sell some of your rights to traditional publishers.

On the flip side, traditional publishing becomes enormously profitable if you hit any bestseller list (or become a top author in your community), not least because it leads to an audience who will follow you and buy other things you offer—a newsletter, a membership, a class, merchandise. Plus you may be able to charge significant speaking fees.

So if I had to answer this question in a way that applied to everyone, I’d say: authors who are able to switch between traditional publishing and self-publishing as it suits their needs are earning the best profits today.

Exercise

Let’s pretend you’re preparing to buy a package of services from a hybrid publishing company. They’re asking you to pay $8,500 to publish your book, plus another $6,000 to do a print run of 2,000 copies. Calculate how many copies you would have to sell to recoup your investment under the following circumstances.

• $20.00 print book and $9.99 ebook
• 25 percent list price royalty ($5.00) on print copies
• 50 percent net royalty ($3.50) on ebook sales

Assume 50 percent print sales and 50 percent ebook sales—­but it’s interesting to vary these percentages and see how the math plays out when your sales are ebook heavy, which is typically the case for genre fiction.

As you review these figures, also calculate what you would earn as a self-publishing author at Amazon Kindle Direct Publishing rates. For example, on a $20.00 paperback, you would likely earn at least $5.00 per copy, depending on unit cost (determined by your book’s length and trim size, and if you include color). For a $9.99 ebook, you’d earn roughly $7.00 per copy.

Explore further

• The Business Author ROI Research Report analyzes the sales and earnings for business book authors. This report is valuable because it breaks out authors who self-publish, traditionally publish, and hybrid publish.

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