Sunday, January 18, 2015

To Make A Living

Most know my feelings regarding traditional publishing versus indie publishing.  I think the odds are far better to make a living through indie - profit margins are better, control over content is total, and you design the marketing strategy.  You could sell 50,000 books a year in traditional publishing - a number few authors, especially new authors, reach - and still not make enough to put food on the table and keep yourself warm during the winter.

However one thing I've never really discussed is just how much you need to sell in order to make a decent living as an indie author.  The answer to that really depends on what you want your lifestyle to be.

First and foremost, be realistic.  Yes, awesome writers like Hugh Howey and Joe Konrath make exorbitant sums of money and can live the life we all dream, but that's the top tier.  That's not to discourage you from shooting for that - after all, someone has to hit that level - but just to help you create expectations for yourself that don't result in suicidal thoughts if you don't reach them.

Two thirds of American households earn less than $75,000 per year, and the median income per US household is just a shade north of $51,000.  Therefore, let's assume that you want to make at least that much.  To do so, your income minus your expenses much come to $51,000 per year, so you first need to figure how much you will sink into the business each time the calendar flips.  Extravagantly, let's say that you will spend $6,000 per year on getting published through covers, copy editors, free copies for giveaways, etc.  Yes, I know just how much that sounds like, but when coming up with how you plan to live in a place not made of cardboard, it's best to be as high as possible/realistic when determining expenses.

So you need a book generating revenue of $57,000 per year, and there are a few ways to get here.  I've discussed previously that you need to spend some time figuring out what to charge.  For the sake of this analysis, let's just say that you will charge $3.99 per ebook on Amazon's KDP Select.  Since you get to keep 70% of what you sell this way, your income realization after sales is $2.793 per ebook, and if you sell 14,000 per year, you earn just north of $39,000.

Some folks like to go ebook pure, and so their sales range has to go higher in ebooks(20,409 to get to $57,000).  Others, however, like a mix of hardcovers using services like Lightning Source or CreateSpace.  Depending on extras, you can charge about $11.99 and earn a $5 per book profit margin.  At this rate, you'd have to sell about 3,500 copies to reach your goal of $57,000, or about a 4:1 ratio of ebooks to hardcovers(not an unrealistic ratio if this is your full time job).  Depending on how you want to live, adjust your goals upward appropriately.

Numbers like this might sound daunting, but they're really not, especially in the age of the ebook.  People are far more likely to download an ebook than to pick up a hardcover, and the lower price makes it worth the risk.  Most folks figure that if it wasn't worth the time, then they're out less than four bucks(of course, you can't do this long term and get away with it - readers don't become repeat customers if your work stinks).  And given the number of people in the US alone, some hard work makes this goal easily achievable.  Sure, you won't be a household name, but you can earn a living doing what you love - writing.  Even those making an exceptionally lucrative living at this, like Amanda Hocking, aren't known by most of the public.

Few reach the stratospheric levels of folks like JK Rowling, but you can make a damn fine living in indie by grabbing a small portion of the market.  It'll take work, as well as an understanding of the business world, but it's doable.  How much you devote to getting there depends on how serious you are about making this your career.

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