Eric Makes an Ebook: 4 – How Much Does It Cost

All right (alright?) we are moving through our questions now. We know a little about copyright, and have selected our retailer. In order to do this we had to make a few business decisions about how to distribute to the consumer. This leads to question #2. How much does it cost?

Ebook Questions For Smart Beginners

  1. Who sells ebooks besides Amazon? Kobo, BN, Tolino, Apple, Smashwords and Draft2Digital; + lots of other places
  2. How much does it cost?  
  3. Do I need a bank account, EIN or DBA? 
  4. Do I need a ISBN?  Mostly not. To control my book's message, here's why I did buy ISBNs.
  5. Do I need copyright?YES you should but you don't have to. You need to read this book to understand copyright. But get legal advice if the word "contract" is mentioned.
  6. Do I have the rights to my work?
  7. What about previously published work? Find Contracts! Usually, you retain reprint rights.
  8. How do you format an ebook?
  9. Do I need a print book?

For a full explanation, you may need to read the previous post about "who sells ebooks". But whether you choose a retailer, or a distributor (who then sends your ebook to retailers), each company will take their profit off the top for each book sold. I think this is totally fair.

Why? First of all, you are not paying a setup fee, or some other nonsense, for the pleasure of letting a company sell your work. Instead, the retailer is taking a cut of your royalty. You only pay them if you sell. That means they are motivated to help you sell your book.

Secondly, the retailer is absorbing alot of the hidden costs and annoyances. Bandwidth costs money. Credit card transactions cost money. Returns cost money. Housing and transferring your products costs money. Developing an interface and keeping it safe from malicious code costs money. Reviews? Money. These are things I don't want to do, so I farm them out to a retailer. I could easily sell from my website... but who would ever find it? It's why I love living in a capitalist economy. I have choices.

If you don't like the royalty options for one particular retailer, don't use them. If another retailer has websites written in Estonian, and you have a big audience in Estonia, you can use them to sell your book. They already know how to speak and write in Estonian. You don't have to learn that. But don't be naive. They are not going to work for free.

These retailers operate on consignment*, and only get paid if your work is good. If your work is bad, you won't sell, and nobody gets paid (but there's minimal costs to you). So by using a retailer for an ebook, you are minimizing risk. And there's always the chance that someone buying one book, will see yours, and decided to take a chance. That's the benefit of selling with an existing bookstore platform. *Now, if you are investing heavily in ads, the retailers will get paid, but why are you advertising if you only have one book?

So what are the costs? To upload a book to amazon costs me $0 (+ my time). I designed the cover for $0 (+ my time). And every copy I sell will get me 70% of list price. That is a good deal. Other distributors have larger reach (more retailers) and they take more of the list price. It may be worth it for you to pay this extra cost. Say for example, they charge you an extra 5%, but you don't have to sign up and maintain accounts at Kobo, BN and Amazon. So now you only get 60% of list, instead of 65%. What is your time worth? How many changes are you making for each title? How much control do you want, and how much can you manage?

So if you want to know how much it costs, the answer depends on what your time is worth. Or basically:

Cost of a book = prep cost per book + retailer take of each sale

where prep cost per book is: total prep cost/ estimated # books sold

and where total prep cost = (value of your time X hours spent) + copyright + cost of whatever tasks you farm out (cover, layout, ads, ISBN, etc.) 

As you learn new skills in publishing you can determine which tasks you can complete cost effectively, and which you should farm out to others. But you won't know until you try it.

So get out there and start making mistakes! It's not the only way to learn, but it is the most interesting.

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