What is the profit in an ebook?

I knew nothing about the profit (or lack of) in self-publishing an ebook when I started writing. And I think that was a good thing because I might not have even tried. However, as I reader, I think the actual profit an author sees is important to understand. I’ve seen so many discussions where a reader states it’s ridiculous to pay 2.99 for a 41 page story. As a reader, I COMPLETELY agree (I’m a penny pincher!). As an author, though, I’ve been exposed to a whole new world…and it’s all business.

Did you know that it costs about $700 to self-publish a book? Say whaaa?! Yeah, I know. When I started publishing (way back in Jan 2013), I researched what I should do (hire an editor, hire a cover artist, advertise), how much it could cost (around $1000), and decided to try doing things differently. I figured I could self-edit and save myself $500 and buy Photoshop elements ($150) and save myself more $$ over the long term by designing my own covers. And I’d heard stories of people who just published and became famous…so why advertise, right? Eh! Wrong!

You readers are smart (obviously smarter than me) and don’t want to weed through books littered with grammatical errors. Within a very short time, I saw my mistake and knew I needed an editor (a team, really…I now pay for a content editor, a proof reader, and still depend on volunteer proofers to catch what they miss). As for the covers…well, it was obvious my artist’s eye wasn’t as artistic as I’d thought. I now outsource the covers to an actual cover designer.

Anyway, my point is, there’s an initial investment to self-publishing. When an author prices a book, they keep the size of the book in mind along with their initial cost. HOWEVER, Amazon throws another little wrench into the growing math equation. If an author prices their book at 2.99 or higher, they earn 70% of the sales price. If it’s less than 2.99, only 35%.

Ready? Here’s the word problem…

Question: If I write a 40 page novella (about 20k words) and price it at 99 pennies, how many copies would I need to sell to see a return on my ($600) publishing investment?

Answer: 1765 copies.

And that’s just to break even. It would take most self-published authors months (maybe even a year) to sell that many. Imagine wanting a $600 profit…that would be another year. That’s not a good return. The only financially smart option is to up the price until the author can see 70% of the sale, which means a 2.99 price point. That would bring the copies an author would need to sell down to 294, which means an author could see a profit within a month.

Writing is a business and as the author, it’s my job to understand (hopefully) what readers want. That’s why I’m always reading comments, reviews, articles, etc. And, what I’m hearing is “Don’t sell me 40 page books for 2.99.”

Rest assured, I will listen. 🙂

As a reader, I never knew what thoughts had to go into setting a book price or what factors influenced the price selected. As an author, it’s a nail biting decision with every book.

ABOUT THIS AUTHOR:

Melissa Haag

Melissa Haag currently resides in Wisconsin with her husband and three children. Touch is her first published novel. She is currently working on book five of a separate six book series. To learn more about her upcoming projects, visit her at:
http://melissahaag.com

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