Swimming Pool of MoneyWe all know that self publishing your book is straightforward and hence a very easy way to get your story out to readers. Whether you decide on an ebook version only or an additional paperback POD (Print On Demand) version, it takes only a matter of days or even hours before you book is ‘out there’.

Then comes the potential to fall into a trap. And it can be quite an expensive trap as well. Most authors will know that the most logical places to publish are with Amazon Kindle, Createspace and then to have your book available in electronic form via a number of other online retailers such as Apple, Sony and B&N, publishing with Smashwords is almost mandatory.

But here’s the rub. Now that you have your book on sale, you will have to wait until you sell enough books to reach the minimum amount before you can be paid. In Kindle’s case this can be complicated as there are different levels under different circumstances and vary from $10 up to $100. Smashwords at least have an option to be paid by Paypal. (Why Amazon cannot pay by Paypal is a mystery. Well, perhaps not. Read on.) However Smashwords’ payment conditions are just as complex and range from $10 – $75 minimum.

Then there is Createspace if you have published a paperback. The minimum is $20 -$28. However, if you live outside the US, direct bank deposit is not available,  nor is Paypal, and as a check can cost up to $25 to cash outside the US, all your money has gone. In fact you probably just lost $5. So by only publishing with the three main distributors, you will need to generate somewhere from $50 – $200 before you see a cent of your royalties. That is quite a few books to be sold. Then if you do sell enough books to get over the minimum and be paid, you have to do it all over again.

Why I mention this, is because I was recently approached by another online ebook retailer who wanted me to have my books listed for sale on their site. Good news one would think? Well, a quick read of their Terms and Conditions, (Now you all read those, don’t you?) clearly stated that that their minimum balance for the payment of royalties was $35. Added to this, royalties were only payable 60 days after the end of the month in which the book was sold. When I checked out the bestselling book on their site, I discovered it had only been viewed a few hundred times. So how long would it take to see any money? I said no thank you of course.

To be perfectly frank, self publishing was never devised to help authors. It was designed to make big companies bigger and richer. Of the now tens of thousands of books being self published, how many of their authors actually sell enough copies to get over the minimum balance before royalties are paid? Answer? Not too many. Just check the sales ranking of some books and it’s an easy calculation. Check the number of reviews some bestsellers on Smashwords have received and you’ll be surprised at the lack of them.

My point is that there are swimming pools full of money now in the hands of these self publishing companies that has not, and may never be paid to authors. I can also quite easily be persuaded that this was always part of the business model of these companies, otherwise, why wouldn’t they just pay authors by Paypal at the end of each month no matter what the balance?

Because the amounts are too small? No way! I receive payments from other sources, including very large companies, by Paypal for often very small amounts on a regular basis without a problem. As little as $2 in some cases. No, this is about Amazon, Kindle and Smashwords along with a host of other book distributors who do not have an author’s interest at heart whatsoever. Only in pocketing your unpaid royalties.

So you may have thought self publishing was such a wonderful idea. But for who?

The Self Publishing Money Trap

37 thoughts on “The Self Publishing Money Trap

  • 27/08/2011 at 1:23 pm
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    Hey Derek!

    I read this article a few times, part of me agreeing, part of me disagreeing. But in the end, I must say that you are quite right with the information here. Self publishing is a great option right now… but only for those who have it planned out.

    When you self publish, the first thing you need to realize is that you are now a business. Your product is your book and with any product and any business, there is expenses. An author must research all expenses and come up with a plan to make sure their book can and will be profitable.

    See, I live in the US, so I haven’t had any problems with the payment situations you’ve listed. I get my deposits monthly from KDP and Createspace, without a glitch. And Smashwords is nice because you can buy ISBN’s for your books without paying… they’ll deduct it off your royalties.

    I agree that the time length for most of the vendors is terrible. That’s why I prefer readers to go through KDP for my ebooks – Amazon at least pays in 60 days. But even then, remember, we have to learn how to budget ourselves to that point. The first two months a little rough, waiting for a payment. But once it comes, it’s a monthly deposit…

    But for those who aren’t in the US, I can understand how tough it could be. My hopes are that as self publishing grows, so will the opportunities for those abroad.

    NOW, one thing I have been tearing myself apart for for a while is the paperback costs of books. It’s basically free to upload to KDP. But for Createspace, there’s all these little costs that eat away your future revenues and profits. Right now, in my basement, I have a small inventory worth over $300 in paperbacks. I cringe each time I see it.
    Now, do I sell paperbacks? Yes. I get requests each month for authographed copies. I sell some on Amazon too.

    But my plan is this: for my next book, it will be released as an ebook only. Once the ebook profits are enough to cover the initial cost of the ISBN, upgrade fee, and a small order of books to have, I’ll sign up for a paperback. This way I’m not sitting on my own money.

    But you are right, self publlishing can get expensive, and fast. Those who want to do it – who read the stories of all the authors making money – need to pump the brakes and look at the potential cost of everything too.

    -JB

    • 27/08/2011 at 2:01 pm
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      Great points Jim.

      Indeed if you are serious about self-publishing, you are in business, and it involves damn hard work. The writing is the easy part I think.

      Also your point about releasing an ebook first is very logical in the current market. Although I have released both at the same time up until now, I really think the next will an ebook first.

      Thanks again for your contribution to the discussion.

      • 27/08/2011 at 2:19 pm
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        I think some people feel you just upload a book and wait. And that’s where the pesky expenses and costs can sneak up and bite them.

        This is all about a long term strategy.

        The fact of self publishing does not make it easier then going the traditional route. Both are tough. Both have ups. Both have downs. It all depends on what the author wants today and tomorrow.

        -JB

  • 31/08/2011 at 6:41 am
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    Great post, as always, Derek. This is something I actually wasn’t aware of, and I’m currently in the final stages of editing my book for release in October. I’m living in the UK, and so this definitely applies to me. And as much as I can respect the genius from a business sense, I’m shocked at the reality of it.

    I think I may have to start researching US bank accounts and TINs.

    • 31/08/2011 at 10:45 am
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      It’s always glossy on the outside Daniel. All the nasty stuff is hidden in the fine print of the terms and conditions. Which of course we usually only read when trouble strikes. Good luck with your book. By the way, I’m not sure, but I believe by working with Amazon UK, you might get an easier ride. Worth checking out.

  • 06/09/2011 at 8:45 pm
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    Anyone who has written a book already has put many, many hours into the project. What’s another few hours to upload the thing to a few e-book sites? I guess I just don’t see the downside. Most of us have family and friends who would love to read our books, and I’m very glad that Amazon and Smashwords are making this possible without the ridiculous costs charged by the vanity publishers — now, THERE’s a target for your indignation, if you like!

    You can’t expect a business to run itself like a charity. Let Amazon (or whoever) keep their ten bucks (or whatever) — I think, quite frankly, that they have earned it.

    That being said, I must confess that I have had eight novels and a novella published by Penguin Putnam. So I have absolutely no right to complain about anything.

  • 29/09/2011 at 12:30 pm
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    Smashwords is not too bad. you need $10, and you get that fairly quickly if you have a reasonable book. The big problem is if you do not live in the US, and then it is the IRS that makes it hard to actually get that money without them taking a 30% chunk out of it.

  • 30/09/2011 at 12:50 am
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    As with most things in life, nothing is set in stone. Self-publishing is not for everyone. As a matter fact, it is for the minority. But there are several forms of self-publishing and benefits of each one. Additionally, there are several paths to traditional publishing and benefits to each.

    For example, my first book was self-published. Between Amazon, local book stores where I travel, and back of room promotions where I speak, I have sold over 8000 books in 2 1/2 years. With my percentage of profit being just over 80%, that makes my income from those sales very substantial.

    On the other hand, from the average per-book royalty from traditional publishers for first books, I would have to have sold somewhere between 100,000 to 180,000 books to have the same profit.

    But few will promote at the levels that I do, so as I say, it is not for everyone. But there are good reasons for self-publishing.

  • 10/11/2011 at 8:13 pm
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    Thanks for bringing this to my attention. Never would have thought of this otherwise. Didn’t even sound like a problem till the end of the article. Good points!

  • 10/12/2011 at 12:59 am
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    You were right. I’m ashamed to say it but my book was 99 cents on Amazon and I didn’t sell enough copies to even surpass the $10 mark before I finally pulled it. At the 99 cent price point, it just wasn’t selling enough fast enough for me to ever get paid. I was going to revise it but it’s on the back burner for now. Anyway, Amazon kept the money I made from the sales.

    You were right.

    • 10/12/2011 at 3:45 am
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      If you’re not doing anything else with your book, why on earth did you pull it? More people are buying Kindles and other e-readers every day. Their relatively small percentage of the book market is going to jump this Christmas when everyone opens their Kindle Fires. If I were you, I’d put it back up and be patient.

      You can read about my own self-pub journey at http://www.bestbyfarr.com. It has been amazing – at least to me.

      Diane Farr

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