The Profitable Publisher

This is the most common method. And it can work. It doesn’t work all that well, however. So we’re going to make short shrift of it.

If an acquisitions editor is doing this, you should usually divide the estimate in half. All AEs fall in love with their babies, and so they should. But it doesn’t make them the most objective judges.

If it’s done by a marketing team, look at the person’s track record. Most will estimate high, but some are consistently pessimistic.

When you do this, somewhere deep down inside you, there’s a little calculator doing something a little like the method in Part III. Essentially, you’re looking at comparables, estimating their sales, and then adding or subtracting to allow for factors like the economy, pricing, relative quality of the cover, the reviews, and the content, and the amount of marketing that the author and your marketing department are likely to manage.

What factors do you toss into the mix?

Most publishers seem to feel that you can’t really estimate future sales on a book. The normal procedure seems to be the gut feeling, combined with a look at Bookscan for the author’s prior sales, or the sales on competitive titles.

All well and good, as far as it goes, but you can do better. There are a number of approaches that work. Use as many as you can, and then average the results. With any luck, the inevitable inaccuracies will all point in different directions, and the average will be better than any one of the estimates.

So, this entry focuses on your marketing plan. If you don’t have one yet, smack yourself upside the head, and go do one!

Got it in front of you? Good.

For each major element of the plan, estimate how many people will be exposed to the message about your book (magazine circulation for articles or reviews, regular visitors for blogs, . . . ).

Multiply this by the likelihood that you’ll be able to get the article or review in the first place, if it’s not already set in stone. Example: if you’re hoping for a review in “Better Needlework,” circulation 10,000, and you think you have a 50/50 chance, then you multiply 10,000 by 1/2, for a total of 5,000. That’s the likely number of people that will see this piece.

Now, how many of those viewers are in your target audience? Multiply the likely size of your audience (above) by that fraction. “Better Needlework,”in our example, is about both gros point and petit point, with some doing one or the other, and about half doing both. Four our example, about 75% of the readers do each one. So, your book on petit point might interest about 3 out of 4 readers. And now, you guessed it, you multiply 5,000 by 75% for 3,750. That’s the probable size of the INTERESTED audience.

How many of those people will buy your book? Multiply the interested audience, above, by that fraction. In a normal audience, it might be 1%. In a specialized audience, if your book is much better than any of the competition AND if the audience is book-oriented, it might rise to 5%. Our example will be one of those occasions, so we multiply 3,750 people by 5%, for a total of 138. (Actually 137.5, but half a person would just make a mess of our needlepoint!) This is the number of copies your book is likely to sell based upon this review, or whatever.

Do this for every major campaign, and then add up all the numbers of copies you think you’ll sell. That’s your estimate of total sales.

Simple, no?

Any questions? Comments?

I was recently asked how items like ISBN and copyright registration costs should be handled: what accounts should they be in, how should those accounts be tied to the particular title, and how they should get into COGS. (Cost of Goods Sold)

I’m going to start answering this at a simpler level: COGS comes in 3 types. PPB, Royalties, and Plant Expenses. PPB means Paper, Printing and Binding. It usually includes everything on your printing bill. We all know what Royalties are. Plant expenses are those costs where the total expense doesn’t change when the number of copies sold or printed changes. (NB: Plant means something very different outside of book publishing!)

ISBN and copyright would be plant items. So are design, editorial work, etc.

Plant expenditures are recorded as a current asset, until the book is published. At that point, you begin to amortize the total over the expected life of the title. This reduces the asset by a certain amount each month, and moves that amount over to the COGS — Plant account.

Assets accounts usually begin with a 1, liabilities with a 2, equity and retained earnings with a 3, revenues with a 4. Many publishers also assign their COGS accounts to the 4s. Then selling, distribution and marketing are usually in the 5s.
Operating expenses are usually in the 6, 7, and 8 ranges. Extraordinary items, interest and taxes are in the 9s.

If your accounting program allows long enough account numbers, you may want to assign the second through fifth digit to describe the type of item, and the sixth through tenth digits might designate the title.

For example, your chart of accounts might show an account number 1 3510 67890.
This could be decoded to read: 1 = asset.

Next digit: 3 = inventory or plant. (2, 3 or 4 = current asset, 5 through 9 = long-term asset.)

Then comes 510 = ISBN registration. (There’s no common arrangement for these digits, this is just an example!)

And last, 67890 = title id. Usually the end of your publisher prefix, and the title identifier. (Omit the check digit or not, according to taste.)

Let’s suppose, though, that your accounting program doesn’t allow such long account numbers. Then, you may need to employ sub-ledgers. These expand the level of detail you track for a particular summary account. Plant asset records are often kept in a subledger, and only the totals are entered into your general ledger account. Then you can use Excel or something in your accounting package to track individual titles’ accumulated expenditures, and the offsetting amortization.

Combining the information tracked by title for sales, subsidiary rights revenue, PPB, Plant and Royalty expenses, as well as marketing and distribution expenses, will give you a very good handle on which books were successful and which were not. They can help you understand whether or not your projections before the project launched were accurate or not, and sometimes they can even help you pinpoint why one book succeeded and another did not.

All of this is pretty complicated, so please do ask questions in the comments section. You do NOT have to register, just comment away.

It depends.

Are you interested in selling books? If so, then where will they sell? Bookstores won’t stock books that don’t have a good spine and a commercially viable cover. And on-line stores like Amazon use thumbnails of the cover to help sell books because good ones work.

Without a good cover, your readers won’t look at your book long enough to get hooked. There have been a few exceptions, as with any rule, but not many. And who wants to make it any harder for your book to succeed in this world?

So packaging matters, even when you’re selling words. Allot enough resources to guarantee a good cover if you want good sales.

Now for the hard part: what makes a good cover? I have a few thoughts, which may be all wrong, so please feel free to contradict or argue with me in the comments:

Spine: Should be clearly legible from a distance of 3 to 4 feet, by your target audience. (For example, if they’re boomers, their eyes may no longer be good, so make it even larger font, and less ornamental.) If it’s popular non-fiction or fiction, consider including a thumbnail image.

Front cover: Look at the books on the store shelf where you want yours to appear. What do the successful ones have in common? Your design should have a similar design sensibility (color schemes, type of art or lack of same, font type, overall “feel” . . .), and similar amounts of information.

Back cover: The copy here (or on the jacket flaps) is critical. You have a very few sentences to tell the reader why they’ll be glad they bought your book and not the others that meet their needs. You may want to use blurbs (do other books on the shelf?) or summaries of benefits (not features) or plot synopses. Whatever you say, make it count!

Really, I’m not the person to ask, so I’m opening it up to all of you. What grabs you and makes you pull down a book (other than a known author or branded series)?

Now that I’ve had my Kindle 1.0 for a week, I still love it. Nonetheless, I can see what I would like for the future:

1. Better resolution for graphics.
2. More font options, so that publishers can do a little typography.
3. Better h&j routines. The justification tends to do funky things to word spacing. Maybe it could come with some h&j routines it could do on the fly?
4. Waterproofing. I like to read while I walk from place to place. I can’t take my Kindle out in the rain, per the manual. (I’m in NYC and driving just isn’t an option for most errands.)
5. Slightly better searching and suggestions in the Kindle store. Right now, whether it’s because the selection is still light as we all rush to convert to the format, or what, it’s still not as good as the regular Amazon experience.
6. Longer battery life, or the option to upgrade to a longer battery life. I’m having to recharge after reading for a day or so. Not that it’s a real problem, but . . .

Color would also be nice, but not at the expense of resolution.

So, all the rest of you — what do you want in your Kindles? Better web brower? Better searching by tags? What?

And I just found yet another reason why publishing people ought to love the Kindle. Agent Kristin on Pub Rants tells how it’s making her life easier.

As our industry starts to change, it’s important that we think about what the essence of publishing really is. This is especially true as the barriers to entry drop and many new people flood in to join our profession, without any indoctrination from the rest of us.

My list starts with owning the ISBN block, which is critical to making the book available to the public. If your national ISBN Agency doesn’t have you as the publisher for those numbers, none of the functions below can override that.

Publishers also must either do or hire someone else to do the design and editorial work on the book. The design must include both the design and composition of the interior, as well as tailoring the cover to the market. The editorial work includes making sure that the structure and overall execution of the content are adequate, as well as getting copyediting and proofreading, etc.

Publishers are the venture capitalists of the book world. They fund the joint venture of author and publisher in launching this book and reap a share of the rewards.

Publishers provide appropriate marketing to the target audience. They also provide distribution to the sales channels where the audience will shop for books.

Publishers have expertise in their industry and the market. They may not do all the functions themselves, but they know who can and how to find them. And they control the process, ensuring that quality standards are met.

So, what did I miss? What needs to be amplified? Where was I just plain wrong?

What do YOU think are the critical functions?