The Truth About Earnings
The digital age has a lot to answer for. In some respects, it's fantastic. It's made our lives simpler and easier as things are more accessible and quick to process - often at just the press of a button.
On the other hand, it's also made us impatient and less tolerant of waiting times. We're in an age of 'millennials' that want everything now.
For authors, it means that what was once seen as a lucrative business to break in to with only 'traditional' publishing deals available, we can now control what happens to our stories, who publishes them, and how much for.
However, due to the fact that Joe Bloggs down the street can now publish his own book on anything from his favourite toe nail clipping to the truth about the Roswell incident, the amount of books available on the market streams into the millions. Not only does this make it incredibly difficult to break the surface and 'be seen,' but it means that prices have to be competitive.
What's wrong with that? Well, as a buyer, nothing. As a seller, everything.
The general price range of e-books is anywhere from £0.99 to £4.99. (Yes, I've put it in pound sterling because I'm in the UK). It's generally foreseen that 0.99 is the 'bargain bin' i.e. it's cheap because it's rubbish, so buyers, readers, tend to scroll on by. However, at the other end of the scale, 4.99, we generally find readers thinking that's way too much to spend on a 'virtual' or a 'digital' product, so they scroll on by again.
This leaves the sweet spot of e-book pricing between 1.99 and 3.99.
Now, here's a piece of clarity for you.
Amazon takes 30% of any earnings from the author for an e-book. So straight away, for every pound (or dollar) you spend, 30p of that has gone straight to Amazon.
However, Amazon takes their 30% BEFORE VAT is added. So, for a £2.99 book, the entire royalty payment is only calculated from £2.49. This means for each e-book priced at £2.99, the author only receives £1.72.
The screenshot below is from my personal KDP (Kindle Direct Publishing) account so you can see the truth of this for yourselves. Also note the fact that we're charged for it being delivered to your e-reader device too.
Now, that's not bad, right? Nearly £2 per book that's sold. What are we moaning about? Well, here's another screenshot for you. This is my latest book, Versipellis Lupus Venandi. Here it is, in black and white, for the amount of time I've spent writing this.
So, 20,335 minutes. That's 338 hours or 14 days. Do you see where I'm going with this? If we calculate a basic wage off the national living wage in the UK, which for anyone over the age of 25 is a minimum of £7.83 per hour, that means to earn the bottom of the scale rates, the book would have to earn us £2,646.54 just to pay us back for our time. That's roughly 1,540 books needing to be sold - just to pay for the time we've spent writing, revising, and editing the manuscript.
Then we have cover costs. Digital art. As with anything, there are good cover artists and bad cover artists. Some good ones are really reasonably priced and some bad ones are extortionately priced because they think they're better than they actually are.
The average price for decent quality e-book art is around the USD$150 (I've done that in dollars as most cover artists work in USD. The conversion to UK GBP as of today is £116.68). If you want a wrap i.e. something designed for a paperback book to be printed, then you're looking at around $50 (£38.89) extra.
So going off the basis that $200 (£155.58) is what it costs to get an e-book and paperback wrap for 1 book, that means, at £1.72 we need to sell 90 books just to recover the costs for the cover. Along with the 1,540 books need to pay us back for our time, that's a whopping 1,630 books just to cover our time and payment for a pretty image that attracts readers.
THEN, we have editing costs. Most editors usually charge either per word, per thousand words, or per page (which is limited at 250 words per page).
Per word, it's usually around $0.0065 to $0.010 (again, most editors work in USD but UK price it works out at is £0.51 to £0.78)
Per thousand words, you're looking at around $8.50 (£6.61).
Per page, you're generally looking at around $3 - $5 (£2.33 - £3.89)
So, for a 50,000 word manuscript (which is on the smaller size of novels), you're looking at a rough cost of $325 - $500 (£252.85 - £389) for a standard edit.
You know what that means? Another 147 - 226 book sales just to cover the editing costs. So now we're at a huge number of 1,777 - 1,856 book sales JUST TO BREAK EVEN.
THEN, there's all the dreaded marketing. $30 here, $20 there to be featured in newsletters or get a 'spot' on a big reader subscription list. AMS (Amazon) ads and Facebook ads are an art form with understanding the CPC bids, keywords to hit, and turning 'impressions' into sales. Then there's big guaranteed money returns like BookBub - but to get a feature there you're talking around $500 - $800 just to get a spot in one of their daily newsletters - and that's only once you've passed their strict criteria.
So, to sum it all up, an author needs to make around 2,000+ books sales just to re-coup their time and money. In the massive sea of books out there, that is more difficult than you could ever imagine. According to BookScan, the average U.S. book now sells only 250 copies per year and less than 3,000 in its lifetime.
Essentially, we're doing this at a huge loss unless we get lucky and hit the big time or have buckets of cash to throw at marketing.
On top of all that are the usual things like maintaining websites, which is usually around $20 a month, or $100 annually. Again, more book sales needed to sustain that. It's just a never-ending cycle of expense.
The next time you think an e-book is too highly priced, just take a second to bear all this in mind and remember that actually, there is someone at the end of all this who is trying to make some money back for all their time and costs.