Are you about to publish your novel? If so, should you try going with a traditional publisher, or should you go indie? How do you make that decision?
Lynne posted this question on my “Ask A Question For My Blog” page:
I’m planning to go indie with my WIP. It’s only my second novel, I’m still a newbie, but here’s the question: what are the biggest reasons for seeking an agent and/or traditional publisher?
There are a number of obvious negatives associated with traditional publishing, such as low royalty rates. And I’ll have to do much of my own marketing even if my manuscript is accepted. I’d also like to do my own kindle pricing, something I can only do as an indie.
Thoughts? I want to know both sides before committing to my course.
Randy sez: Lynne, I have a feeling your question is much bigger than a single blog post can handle. I’m pretty sure I could write a whole book on the subject, and maybe someday I will. But you’ve got to make a decision right now, so I’ll try to boil things down a bit.
First Some Definitions
It may be useful to define a few terms, for those who are new to the industry.
Traditional publishing means that you sell the rights to your novel to a publishing company. The publisher pays for all production costs, including editing, cover design, printing paper copies, warehousing, distribution, and sales calls to bookstore chains. Generally, the publisher also does some marketing, but most authors are responsible for most of their own marketing.
Indie publishing means that you act as your own publisher. You pay for all production costs, which are typically editing, cover design, and formatting your book for e-books (and optionally print books). Most indie authors who do print books use a print-on-demand service, such as Amazon’s CreateSpace, which means there are no warehousing costs. Most indies deal only with the online retailers, such as Amazon, B&N, Apple iBooks, Kobo, etc., which means they have no need for distribution or sales to bookstore chains. The author does all the marketing.
Vanity publishing means that you pay a “publisher” to do all the work that you would need to do as an indie author, such as lining up an editor and a cover designer. Most people in the industry agree that vanity publishing is a terrible deal for virtually all authors, so let’s put this off the table right now.
So our choices as an author are to work with a traditional publisher or to be an indie author.
A Side Note On My Background
I have many author friends. Some are exclusively traditionally published. Some are exclusively indie. Many are hybrid authors—they work with traditional publishers while also doing some indie work.
I started out working with traditional publishers and published 8 books with them—6 novels and 2 nonfiction books. The novels all eventually went out of print, and I’ve republished them as indie books. I’ve also published a nonfiction indie book and will soon be releasing another. At this point, I consider myself exclusively indie, but I do still get royalty statements for my two trad-pubbed nonfiction books.
Issues for the Big Winners
Let’s be clear that in publishing, there are a few big winners who take a large section of the financial pie. There are roughly 100 authors in the US who each earn more than $1 million per year. Most of these are traditionally published, but there are several indie authors in this very exclusive club.
My opinion is that the reason authors at the very highest levels tend to be traditionally published is that traditional publishers have a lot of marketing muscle and they can turn a winning book into a very big winning book, using methods that indie authors just don’t have. An indie author can’t buy space at the front of every B&N bookstore; a large traditional publisher can. An indie author can’t place a book in airport bookstores and supermarkets; a large traditional publisher can.
So if you’re one of the top 100 authors in the US, then you can make a strong financial case for working with a traditional publisher. (However, there are other considerations than just money. More on that below.)
Issues for Top 5% Authors
What if you’re not in the Top 100 Club but you’re still in the top 5%, meaning you’re earning more than about $5,000 per year? (That is not a typo. If you’re an author earning more than about $5k, you’re doing better than roughly 95 out of 100 authors.)
I have many friends in this category. A few are exclusively traditional. Many of them are hybrid—they work with traditional publishers on their current books, and they republish any books that have gone out of print as indie books. Some started traditional, but have now gone exclusively indie. Some started indie and have never published traditionally.
So how do you decide? There are several main factors that you have to weigh against each other:
- Convenience—do you prefer to “just write” and let a traditional publisher deal with the editing and cover design and formatting? (Be aware that “just writing” is not really an option. All authors have to market themselves. But it is true that indies have to do some tasks that trad-pubbed authors don’t—hiring editors and cover designers, and doing the book formatting.)
- Control—do you prefer to have control over the schedule of your book, how it gets edited, and the cover design? An indie author has complete control over everything. A trad-pubbed author has much less control.
- Productivity—do you write more books per year than a traditional publisher can handle? (Many publishers don’t want you “competing with yourself” by publishing a lot of books. Indie authors believe that your books market each other, so they would argue that “competing with yourself” is a nonsensical notion.)
- How often do you want to get paid? A trad-pubbed author gets an advance, and often this is the only money they ever get for the book. So the money is front-loaded in a big spike, with some possible royalties a year or two down the road, paid at six-month intervals. An indie author gets no advance and has to spend some money on production, but then they get paid royalties every month, and their royalty rate is roughly 5 times higher than a trad-pubbed author. (That is not a typo. Indies get all the profit from the sale of a book; traditional publishers get most of the profit and the authors get quite a small fraction.)
I don’t think there’s any one right answer. A lot depends on you, the author. I have a pretty strong entrepreneurial streak and I hate deadlines. I’ve done much better financially as an indie and I like not having deadline stress in my life. So for me, going indie has been a good decision.
But I know authors who’ve done better traditionally than they have as indies.
Issues for Bottom 95% Authors
What if you’re in the bottom 95%, meaning that you’re earning less than about $5k per year? (Again, that’s not a typo. That’s just the hard reality of the publishing world. Most authors are not well-paid. I wish they were, but I’d be a liar to say they are.)
There are several reasons you might be in this category:
- You might be a newbie who hasn’t published anything yet, nor sold anything for a big advance. In this case, some issues you should weigh are these:
- Speed to get published: it can take a long time to break in to traditional publishing, whereas you can indie-publish as soon as your book is written.
- Validation: it feels good to have a traditional publisher make you an offer, whereas if you go indie, nobody is validating you except your reviewers.
- Quality control: a traditional publisher will set standards for the quality of your book, which means that your book will only get published if they think it’s good. If you’re an indie, you can publish the worst drivel imaginable, and nobody will stop you.
- Cost: it can be expensive to go to writing conferences to make the connections needed to get traditionally published. If you go indie, there will be some costs for editing and cover design, but you can make these quite low if you want—you decide whom you’ll pay and how much.
- You might be selling to very small publishers who pay very low advances. In this case, some issues you should weigh are these:
- Convenience: Small publishers take some of the burden off your hands—editing and cover design and formatting. If you went indie, you’d have to do this.
- Quality control: Small publishers might be small because they’re not actually very good at editing and cover design and formatting. That’s something you can only determine by looking at their products. But if their quality is not up to your standards, you don’t have much say in the matter. If you’re an indie, you get to control the quality.
- Royalties: Small publishers often pay a higher royalty rate than the big publishers, because they have lower costs. So that may be an advantage. They may be paying you as much as half the profits, which would be good for you.
- You might be publishing very infrequently with big publishers. In this case, you face the same issues as the Top 5% authors, so see those above.
Marketing Issues
There is one other main issue to talk about, but this applies to all authors everywhere. You have to market your books. If your books are doing well, then your publisher will help out on the marketing. The better your books do, the more the publisher will help out.
This is a classic Catch-22. Your books won’t do well without marketing, and your publisher won’t market your books much unless they’re doing well.
As I noted above, if you’re in the Top 100, then your publisher is going to do marketing things that you can’t do as an author.
Otherwise, pretty much all authors use the same kinds of marketing methods. But here the indies have an advantage, and this doesn’t get discussed much.
Suppose you’re using a marketing method that gets 100% ROI (return on investment). By definition, that means that for every $100 you spend in marketing, your book earns $200 in gross profit that gets paid back to the publisher.
If you’re an indie author, you get that $200 in gross profit, and you recover the $100 you spent on marketing, giving you $100 net profit. That’s a good deal for you.
If you’re a trad-pubbed author, and if you have an agent, the gross profit is still $200, but now it’s paid to the publisher. You get approximately 20% royalties on that, which works out to $40. Your publisher and agent get the other $160. But you spent $100 to earn your $40, giving you a net loss of $60! Which means your publisher and agent got $160 from your marketing efforts and you lost $60. That’s a terrible deal for you, but it’s very good for the publisher and agent.
In fact, it’s just not cost-effective for a trad-pubbed author to pay for a marketing method that only gets 100% ROI. If you’re trad-pubbed, you’ll lose money if you pay for marketing methods that get less than 400% ROI. (Whereas an indie author makes money if the ROI is more than 0%. So indies can afford to use more marketing methods than trad-pubbed authors can, and that’s an advantage.)
Let’s check the numbers. If you spend $100 on a marketing method that has a 400% ROI, the book earns $500 in gross profits. Your publisher and agent get $400 of that and you get $100 in royalties, which covers your original $100 marketing costs, which means you broke even.
That sounds terrible, but in fact, your marketing situation is even worse as a trad-pubbed author, for two reasons :
- If your book actually earns royalties, you don’t receive that money for several months, because most traditional publishers only pay royalties every six months, and they typically cut the check a month or two after the royalty period ends. So you might spend marketing money in January and not get reimbursed until September! That creates a cash-flow problem for you.
- But most trad-pubbed books never earn out their advance, which means they will never earn any royalties at all. Which means that any marketing money you might spend on the book will never earn you one extra penny in royalties. This is a strong disincentive for the author to do marketing, unless the publisher pays for that marketing.
If you’re not a math person, you may be thinking that there must be something wrong with my numbers above. You may be thinking that the marketing picture for trad-pubbed authors can’t possibly be as bad as I’ve painted it.
I’m a math guy. I’ve done the numbers every way I know how. The marketing picture is as bad as I’ve painted it. And this is one reason a lot of formerly trad-pubbed authors have gone indie.
Lynne asked a short question, and I’ve gone about twice as long as I intended to in my word count. My apologies on that. There is very much more to be said, and no more space to say it, but I’ve tried to lay out the main issues.
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This is so helpful!. Thank you for going long. I got caught in the marketing-hole cycle with a small publisher. So discouraging. However, I have been able to recover the rights for all three novels and am going Indie with those and the one coming out this fall. With some trepidation, of course. Today, I feel validated!
I find it enlightening and slightly amusing that a post to list benefits of trad pub ends up realistically pointing to indie as the best choice for most.
I’ve lost track of the number of authors who’ve asked me to market their books for a share of their profits. When I show them the math (short version: if I can find 200 hardworking saleable authors a year I can make a living in one of the cheapest areas of the Phoenix valley) they choose not to believe, but at least they go elsewhere, assuming I’m mad as a hatter.
First thing I used to tell my coaching clients: if you’re writing a book to make money, do something else.
Hi Joel: It sounds like I may not have made myself clear. The purpose of the post was not to list the benefits of trad publishing. The purpose of the post was to explain the pros and cons of trad versus indie and highlight the key issues in making that decision. That was what Lynne was asking.
That was very helpful, thank you!
That does it! This is one of the very best, if not the best, thesis on modern day publishing options for new authors.
This is the blog article that calls me to action by finally subscribing. I have been “meaning to” for over a year. Its a breath of fresh, candid, experienced, truthful air.
GREAT JOB RANDY!
Okay, I understand that if you look at just the marketing alone, the trad-pubbed author comes out behind. The indie author, however, first had to shell out several hundred to several thousand dollars on editing services, cover design, etc., which the trad author didn’t have to pay. So, in fact, the indie author is coming to the marketing table with a negative balance, while the trad author is at zero.
It’s possible the end result could be better for the indie author, provided he or she has written a quality book, but at least place the monetary figures at the correct starting point. 🙂
Hi Laurie: While it is true that, in theory, indie authors could spend thousands of dollars up-front, the reality is different. The great majority of indies spend much less.
I don’t have hard numbers on this, but I have talked to many indies and my best guess is that most of them spend less than $500 to take their first novel into print. If you don’t pay for editing or proofreading and you just post the Word doc direct to Amazon, then your only cost is the cover design, which you can get for under $100. I don’t recommend this, but people do it all the time, and it’s not my place to tell them they’re wrong. When you’re an indie, you get to decide.
I know a number of successful indies who started out doing exactly that. And some of them eventually made so much money that they went back and got all their books proofread. (I know, because they used my proofreader.)
I could be wrong here and I would welcome hard data from indies, but I suspect that the median up-front spend to publish a first indie novel is less than $500. (Feel free to post hard numbers, folks!)
For myself, I think a reasonable amount to spend to launch a book is between $1000 and $2000.
The last e-book I indie-published cost me up front about $1220. That was $600 for a macro edit, $220 for proofreading, and $400 for the e-book cover design. At about the same time, or maybe a little later, I paid an extra $100 to get the p-book cover. I later spent more money for an audiobook narrator and audiobook cover, but that was only after the e-book and p-book had long since earned out my initial costs.
I have a forthcoming series that I will spend more on. The book I’m about to launch will cost less.
While we’re talking up-front costs, it’s also important to talk about startup costs for going traditional. Many authors make contact with an editor or agent at a writing conference. This is how I sold my first several books and how many of my trad-pubbed friends broke in to publishing and I have long believed it’s the best way to make contacts.
But conferences are not cheap. You can spend anywhere from $100 for a local one-day conference up to well over $1000 for a large multi-day regional conference, complete with hotel and airfare.
And many of us did this multiple times. So it is not unreasonable to estimate a cost of $5k or more in conference expenses over a period of several years. I personally know a lot of authors who spent this much. I am pretty sure I spent right around $5k on conferences. It was a long time ago, and back then, there was no indie option. If I was breaking in now, I’d probably go indie.
I’ve self-published six novels, so my two cents is this: it would be very difficult to put out a high-quality novel (between 75-125,000 words) for less than $1,000 to $3,000. My novels go through a 3-step editing process with a reasonably priced but experienced editing service and that alone costs in the neighborhood of $1,000-$1,500 (content development edit, line edit, and proofreading). Plus a quality cover (expect to pay a minimum of $350 for digital cover only and going rate for digital + print is in the $500 range). I do my own print formatting, but if you want someone else to do that, expect to pay for it. And yes, these costs are up front but you have the lifetime of the book to earn it back. My last 3 books had decent launches and the costs were paid for in first 30-45 days, so now it’s all “gravy”.
I recently listened to a podcast where an indie author did manage to get his book in airport bookstores – Michael Bungay Stanier, on Tim Grahl’s Book Launch podcast (there were three episodes, and I can’t remember which episode discussed his distribution strategy).
I think he spent about $30k on publishing the book – top quality paper, printing himself (not POD), paying for warehousing and distribution, and hiring a firm who could get him into airports. It worked for him, but that was because he was selling a book about personal coaching, which is the type of book people in airport bookstores are looking for – short, and business/professional.
It’s a fascinating listen … and is the single exception I’ve ever heard of to your rule above. It worked for him, as a professional coach selling expensive coaching services. It’s not going to work for most fiction writers … or even for most non-fiction writers.
Hi Iola:
Very impressive! My hat is off to him for this. That takes guts to invest $30k up-front on a book.
Thanks so much for this comprehensive and well-informed review, Randy. Like Lynn, I’ve been wondering about going indie to publish my first novel, now in edits.
You’ve really exposed the economic realities of the two choices.
Great stuff!
Still totally FLOORED by the fact that only the top 5% are earning more than 5K a year. FLOORED. I have no words. Thanks for this thought-provoking post, Randy!
Yes, Heather, it’s kind of sad. And for those skeptics who don’t believe me and think I can’t possibly be right, I’d encourage you to validate my claim this way:
1) Assume there are about a million authors in Amazon Author Central. (This is a rough estimate, but I know it’s not far off.)
2) Go to Author Central and look at your Author Rank over the past year and estimate your average ranking over that time. Just as an example, let’s say your author ranking over the last year has averaged 50,000.
3) Divide that average ranking by 1 million. So in our example, 50,000 divided by 1 million is .05, which is 5%. This tells you that 5% of the authors are doing better than you and 95% are doing worse. You are at the 95th percentile.
4) Now look at your actual writing earnings over the past twelve months from all sources (not just Amazon). That gives you an estimate of the earnings for a typical writer at your percentile rank. That is only approximate, because the correlation between author rank and earnings is not exact. But it’s pretty darn good.
Lots of competition and only getting worse. Just checking in from the vast unwashed lowly 95%