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"E" is for...

Margaret I. Carr

Editors, editing, economics and electronic almost anything. E-publishing, as you may have noticed, is something I have mentioned before. You can expect to see more under this heading in the future. That does not mean that e-publishing will be the only "e" mentioned.

E-publishing Contracts

I've been collecting sample contracts for a while now. In contrast to the long, loaded-with-legal-language, long-term contracts used in paper publishing, e-publishing contracts are mostly short and simple and for fixed terms of one to three years. Most of them are limited to electronic rights and specifically reserve all other rights to the author.

Royalties

No paper, no ink, no warehouse space, no shipping or other distribution costs

So why do most of the electronic publishers only pay royalties of 30 to 40 percent? (The sites that pay more all seemed to be more booksellers rather than publishers. Editing and formatting are either solely the responsibility of the writer or offered as additional services for which the writer would have to pay.) What other expenses are there? After thinking about it for a while I came up with a little list.

• Editing
• Converting to HTML, PDF and other formats
• Cover design
• Distribution (even on-line you still have to get your book to the purchaser somehow.)
• Promotion
• Collecting payments
• Keeping records
• Distributing royalties

If you were to do everything yourself, there would still be costs. Skipping editing for now let's look at the other expenses. First, conversion. Either you buy software or you pay someone to do it. (You can use Adobe's service for up to three books if PDF is the only format you intend to use.) Let's throw in an arbitrary figure of $20 here. That would pay for one HTML conversion and we'll assume you can get the other formats you want to have available for free or do them yourself.

You might be able to do the cover design yourself. If you are going to show your cover on a website, your own or someone else's, a simple cover design will load faster and be easier to view.

Distribution means providing a place where readers can find your book and buy it. There are hundreds or even thousands of places where you can get a free website. Whether any readers will find your  website or not is another question. You can also submit your book to the nonexclusive booksellers. They will make available on their websites, for a cut of from 30 to 50 percent. They will also insist that you register your copyright and get an ISBN number. (You really should do both of these even if you are only going to sell from your own website.) In the U.S. registering a single copyright will cost you $30. ISBN numbers for single publications in a single medium are now $50. You are now up to out-of-pocket cost of $100.

Promotion! More and more, promotion is the author's responsibility, even in conventional publishing. One of the simplest, although time-consuming, methods is a newsletter. Your newsletter advertises your book and you can swap ads with other newsletters. Let's not even think about paying for advertising at this point. Keep in mind that you are working with found time. You don't have to make a mark in a month or less, as is common in paper publishing. You're also using time that you would spend trying to sell your book to conventional publisher and then waiting another year or two for it to be printed.

Then what? A reader has found your website, likes your sample or your cover, and wants to buy your book. Now what? How is a reader going to pay for your book? If your potential reader has to send you a check or money order and wait for authorization before downloading, you've lost most sales. You're going to have to get a merchant account to handle credit and debit sales. So far I haven't found any that will charge a new business less than 15 percent per sale. Most also have other charges. For our simple cost estimate, only the 15 percent will be considered.

(One model contract I found which was based on the ideal from the writer's perspective called for a royalty of 90 percent of the retail price of the book. Unfortunately, the site did not include any advice on how to find a merchant account that would allow that.)

For the do-it-yourselfer, record keeping can be fairly simple. You want keep track of all costs that you can deduct at tax time and you must keep track of all income. The specifics of what you need to keep on file and how long will vary according to the tax rules where you live. Royalties distribution is not something you have to worry about if you are the sole author.

Profits will start once your initial costs are covered. How many sales will that take? And what sort of sales can you expect?

Facts and figures are hard to find. A mention here and there of e-books that have cracked the 5000 barrier and the implication that this is not an easy sales figure to reach, plus some mentions in renewal clauses of figures of 100 or 200 books sold during the year create a rather discouraging picture. Of course if getting rich was your main objective you would have spent your time on something other than pounding a keyboard.

My guess is that the 100 figure is a realistic expectation for the first year if you work at promoting your book. Ignoring pricing for now and setting an arbitrary price of $10 (because it makes the arithmetic simpler) what do we get?

Your merchant account deducts $1.50 from each sale and sends you $8.50. After 11 sales you have covered the hundred-dollar startup cost. If you do sell 100 copies you make approximately $750. Whatever you do, don't try to figure out what your hourly compensation is. You would have spent just as many hours promoting a paper book. (To earn $750 from royalties at 10 percent on a paperback book priced at $10, you would have to sell 750 copies.)

We`ve accounted for 15 percent of the 60 to 70 percent an electronic publisher keeps. The rest of it would go to pay for editing, formatting, maintaining a website and advertising, whether in a newsletter or on other sites. The big advantages you are paying for are most likely the editing and the established site where your book will not be the lonely only but will have company and will be seen by returning customers. It is also much easier and cheaper to promote a line of books than just one. The online bookstores provide the traffic and promotion, but not the editing. Which is best for you? Only you can decide that and I recommend that you do your own research before deciding.

Search tip.

1. Search on "e-publishing" and
2. "e-publishers" and
3. combine them with the genre you are interested in.