In another comment I was asked:
How do you project sales for your first title. I got to compare it to the competition’s sales with similar distribution, but what I’d like help with, if at all possible, is to get access to the info you recommended on Bookscan and Ingram. You mentioned iPage and Bookscan and Amazon and take the average of all three.
Backing up a bit, in the PMA-U webinar, I started from each book’s projections in order to assemble the sales and direct expense projections for the company as a whole. Sales projections for your books begin with the selection of comparable titles. These books should not only be available now, and similar in topic and quality, but they should be distributed in ways that are comparable to your plans.
Once you have selected your comparable titles, you need to collect information on their sales. This is not usually publicly available. You can, however, use several sources to make an estimate, and then average these estimates to get a number that is probably closer to accurate.
Common sources include:
–Insider information. If you know someone in the other company, call them up and ask. Publishing folk often trade this kind of information, knowing that they’ll want a similar favor in the future.
–Bookscan. This Nielsen company assembles Point of Sale data from about 70% (by volume) of all the book trade outlets. It does NOT collect data from non-booktrade outlets, so craft books, for example, have heavily under-reported sales. Bookscan memberships cost $795 per year through PMA’s member discounts (last I checked) and are definitely worth it if you’re publishing more than a couple of titles per year. If you’re not, and you’re selling “bookstore books,” you probably have a distributor and the distributor probably has a membership. Ask them to look up the sales data on your comparables for you.
–Ingram. If you are selling directly to Ingram, you have access to Ingram’s iPage program. If not, your distributor does. Look up your comparables in this database as well.
–Amazon. Their sales ranks are roughly inversely proportional to the sales over limited ranges. Over longer ranges, it’s more complicated, but if you choose your comparables wisely, and if you know the true sales of just one of them, you can determine the relationship for all of them.
(For more information on all of the above, see the lecture notes for “Making Profitable Financial Choices” toward the bottom of this page.
Bookscan, for a trade book, captures about 65 to 70% of the total sales. Ingram captures between 35 and 45% of total sales, for many trade books. Your type of book may be different. For most of the book trade, Amazon represents 10 to 12% of total sales. Whatever each venue’s right fractions for your books, divide that venue’s reported sales by the fraction to get an estimate of total sales for the book.
Then average all your estimated sales, and you have a better estimate.
When you’re working with estimates, it’s important to remember that the solid-looking numbers aren’t really definite. Try several different sets of comparables, and try different approaches in order to get a good feel for the range in which you’re operating.
After you have estimates for each comparable title’s total sales, there are many ways you can use it. One of the best is to derive a demand curve for titles like this. It will be quite “fuzzy” because there are a number of confounding variables, but you can get some idea of how many more copies you’ll sell for each dollar’s drop in price. And that can be used to pick the most profitable price for your book.
I know that some of the math above sounds a little intimidating. Because many of my clients feel the same way, I created an Excel package that does most of it for you. More information about it is listed under “Pricing Package” in the Software portion of my site.