Have you ever wondered what an average romance author's financials look like? Well, search no further! Whether you're a reader who's curious why indie-published e-books are priced the way they are, an aspiring writer who wants to know what it's REALLY like in the trenches, or a seasoned author who wishes numbers weren't such a taboo topic, I've got you covered.
*Disclaimers: I say I'm an average author - neither a best-seller nor struggling (in my opinion, which may differ from yours). I have never made a list, never been named as an Amazon top seller; my books have sold beyond my wildest expectations, I recouped my investments on production, I have more than 200 (combined) reviews. This is my second fiscal year of being a published author, and to-date, I have 4 books available for purchase. And last, but most importantly, I never claim to have any idea what the heck I'm doing.
Without further ado, let's break it down.
2017 at a glance:
This was the first full year of being published, so the numbers seem unbelievable to me from what they were last year. (I'll show you adjustments for that later.) When I got my 1099 from Amazon, my eyes bugged out of my head. $30k is nothing to sneeze at. Sure, it's not the 6 figures my husband makes, but my family can't exactly call my writing a "hobby" anymore, either. (By comparison, someone flipping burgers at McDonald's full-time makes roughly $18k/year; a physician makes roughly $187k/year.) As much as I felt like I'd "made it" in some sense, it also didn't seem like those numbers were accurate. Where did all that money go? I certainly didn't pay off my college loans with it. Why did it feel like I had very little to show for that seeming financial windfall? The answer is two-fold. 1. Royalties are paid monthly, and like any other commission-based job, it seems to be either feast or famine. One month you might be sipping martinis and getting your nails done. The next, you wonder why you bother.
2. EXPENSES. Until I started gathering all my receipts and invoices for tax-filing, I had no idea just how much I had spent last year. Sure, there were the large bills which were a tough pill to swallow - like that time I ordered enough paperbacks for a signing. Like most budgetary indiscretions, though, it was the nickel and dime-ing which really added up, in the end. So, what could I possibly have spent over twelve-thousand dollars on?
~Professional services. Things like editing, cover art, and formatting. Bear in mind, this figure is for TWO books. That means it costs me roughly $1000 to produce a book. That is not including the hours, days, weeks, months of blood, sweat and tears poured onto the pages. The above estimate for the McDonald's employee? That's assuming a 40-hour work week. I put in approximately 70 hours of work per week. I actually logged my hours once. It was a terrific wake-up call.
~Trips. I attended RT in Atlanta in May and a signing in Chicago in October.
~Supplies. I pay out of pocket for all paperbacks to have signed copies available (for my website or for prizes or for signings). Printer ink, computer paper, mailing supplies, notebooks, fancy-colored gel pens to sign the pretty paperbacks, etc.
~Charitable donations. I had a short story published in an anthology last year. Most anthology profits go to charity. This one was no different. 100% of our proceeds were donated to The Bookworm Box. My series obviously deals intensely with the fall-out from sexual assault and rape culture. It was, and still is, extremely important to me to give back to the hard work being done to help survivors. In hindsight, and looking over the numbers all at once, I'm honestly ashamed I didn't donate more.
~Promotional/Marketing. This is the doozy. The mother of all expenses. You can write the most amazing book in the world, but if no one sees it, then... You get the idea. I'm going to break down this category further since I think it's the most informative.
~Mailing prizes. Yep. This is literally what I paid to ship swag, books, etc. Total: $1,224.67
~Website. Attached email, domain, and premium website services. Total $382.71
~E-book gifts. Think Facebook takeovers, release parties, pimping out fellow authors' new releases, etc. Total: $222. 05
~Gift-card prizes. Same as above. Total: $605
~Facebook/Instagram ads. These probably have the poorest ROI, but that's a post for another time. Basically, you pay out the nose for likes/views on your author page since visibility is non-existent without a boosted or paid post, with very few sales to show for it.
Total: $624. 39
~Graphic design program. Those pretty teasers don't make themselves!
~Newsletter placement. Think BookBub. A slightly better ROI than FB ads, but only if you get magically selected for the premium spots.
~Swag. Those bookmarks, t-shirts, tote bags, chapsticks, pens...ya know, all the fun little things you can collect at signings? They ain't cheap, let me tell ya. Total: $1,493.64
Grand total: $4,837.86
Huh. So, that's where all that money went.
Okay, that's depressing, albeit necessary. Let's talk about something more fun! How the HELL did I earn almost $30k??? I hate to say this, but... KU. Enrolling my books in Kindle Unlimited was the best business decision I ever made. Have you ever wondered why on Earth authors would willingly make themselves beholden this way and put all their eggs in one basket? Read on to find out.
There are generally four major e-retailers which indie authors can avail: Amazon Kindle, Apple iBooks, Barnes & Noble Nook, and Kobo. Unless you're traditionally published or one of the biggest names in the indie ocean, paperback sales are negligible. Many authors also choose to use a distribution service like Smashwords or Draft2Digital, which offers a wider variety of platforms for a small fee. When I published my first book in 2016, I uploaded them to the big 4 without the aid of a distributor. My books have always been priced at $2.99 on all retailers. (More on that later.) By the time I was ready to publish Third and Long in 2017, I realized being wide wasn't necessarily doing me any favors. Here are the numbers.
Kobo: (for some reason doesn't break sales down into yearly charts, so this number is for both years)
~Units sold: 10
Barnes & Noble:
~Units sold: 9
~Units sold: 8414
I'm going to stop there before I tell you the royalties. By now, you can see why choosing to sell exclusively with Amazon was a no-brainer. I wasn't selling anywhere else, anyway! No harm, no foul. So, in April 2017, I pulled my books from all other e-retailers and joined KU. Amazon pays KU authors by pages read, not by books sold. You can still estimate how many books are "sold" through this program by dividing the total number of pages read by the average number of pages in published works. Here's what those numbers look like. (Keep in mind, this is only for 9 months of 2017.)
KU pages read: 5,362, 501
Yes, you're reading that right. Over five MILLION pages read. So, what does that work out to in "book sales," you might be asking yourself? Assuming between the four books in my series that the average number of pages per book is 404, then that works out to roughly 13,274. I "sold" over THIRTEEN THOUSAND books in KU. That's more than all the other options combined.
TOTAL Amazon Royalties: $29,715.38
This number includes e-book sales, KU pages read, and paperbacks purchased through Amazon. Crazy, right?
Now you know why authors choose Kindle Unlimited. We can't afford NOT to, for the most part.
So, obviously, I wanted to see how things had changed from my debut year. Not only was I a published author for all twelve months of 2017, but I also had twice as many books out.
2016 at a glance:
No, these aren't exact figures. My debut novel was published in June of 2016, so really, these are only half-year numbers, anyway. Adjusted to assume steady sales throughout the fiscal period, it looks more like this:
So, what's the takeaway from all these mind-numbing numbers? The pattern was clear for me: in any given year, plan on spending approximately HALF of what I make. The caveat being, there's no way to predict in advance what royalties will look like for any given year. Correlation doesn't provide for causation and vice-versa, but in this case, dollars invested are more than likely linked to dollars earned. The royalties also approximately doubled along with the number of published works. Don't get me wrong - I still lay zero claim to knowing what I'm doing. I'm sure there are better, more cost-efficient marketing strategies out there. (I've been playing around with Amazon ads, lately. Have you seen them, perhaps? Yes, that is a shameless plug. No, I'm not even a little sorry. See? I'm learning.) And in all fairness, not every penny I spent was a purposefully executed marketing scheme. I love my readers. I enjoy spoiling them. I'm eternally grateful (and somewhat confused) to anyone who takes a chance on my books.
I know I've probably mentioned this before, but the greatest joy I've had on this journey can't be measured in monetary gains. Emails from readers who claimed I helped them get through chemo treatment, or who had dealt with sexual assault and appreciated the realistic portrayal of its fall-out are the blessings I will carry to my grave. My daughter asking her principal to start up a Sing Out chapter at her middle school means more than any paycheck ever could. Yes, I'm well aware this is a business-oriented post, but these things bear remembering EVERY. SINGLE. DAY.
Now that I've made the above point crystal clear, let's go back to number crunching. No, I don't like it, either. The difference, however, between being a writer and being an author is running your own freaking business, which means switching from letters to numbers...once a year when taxes are due. (Just kidding. No, I'm not.)
Do you see any other discernible pattern in the above units sold vs. royalties numbers? If you average them out, there is approximately a 1:1 ratio. What does that mean in non-math terms? For every book I sell, priced at $2.99, I make approximately one dollar. That's it. Just one. The e-retailers keep the rest. I already mentioned it costs me around 1G to produce a book. That means, in order to break even on the cost of production (not even accounting being paid for actual hours slogging away at the computer), I have to sell at least 1000 books. Sounds easy, right?
Uh, no. Look at those retailers that aren't Amazon. It's not easy. And without the marketing investment? It's darn near impossible in this overly saturated market. I've been LUCKY. I'm fully aware of that. But, luck doesn't hold forever because she's not usually the lady she's proclaimed to be. Business is business.
Which brings me to the next topic: price points. I see this all the time. I'm sure you do, too.
Readers: Why do authors charge so much for e-books? I'm not paying it. I'll wait until it goes on sale...they all eventually do.
Authors: You pay more for a venti macchiato at Starbucks than I charge for an e-book! And your coffee only takes a few minutes to make!
Hold up. Don't bring out the pitchforks. Hear me out.
The price of an e-book is not always up to the author. In the case of traditionally published authors, the publishing house determines the cost. Those $7.99 and above e-books you can't even imagine buying? The author didn't choose that price point. Why do the publishing houses charge so much? Easy. To drive up the demand of print sales. If you can buy the paperback for less than the e-book, you would. Right? Of course.
That being said, indie authors DO have control over what they charge for their books. To an extent. Let's not kid ourselves. This is a capitalist market like any other. Supply and demand, and all that economics mumbo jumbo. How does that break down from the author's POV? It's...complicated.
A debut author wouldn't dare charge much for their books. That's too high risk. Think about it. Who are you willing to pay the big money for? Authors you already know and love, right? You want a guaranteed good product if you're going to spend your hard-earned money and invest hours of reading time. How do you know if a book will be good? History. You've read that author before. You know what they're capable of. Hence, the term "automatic one-click." Where does that leave the new author? On the least risky end of the price point, my friends. But, wait. If it takes money to make a book and money to promote a book, then how will the new author hope to, at the very least, break even?
Ahhh, there's the catch 22. Price too high, and no one will buy it. Price too low, and you'll have to sell more books than you're capable of with little or no marketing funds. (This is why bloggers are the unsung heroes of the indie publishing industry. They get the word out for FREE by the sweat of their brows and the love in their hearts for all things book world. Mad respect for y'all. Truly.)
But, what about the high-performing authors? Those one-click goddesses (and gods) who are landing on best-seller lists left and right? They're not exempt from the meat market, either. Remember those patterns I mentioned in the numbers? Plan to spend roughly half of what you will make. If you want to make the big money, then you have to cough up the big marketing. They started at the ground, just like every author. Every penny they earned, they put back into marketing. To be sure, it's all about the books, but again...people have to see them. They have to know they're available. That means throwing money at promotion while growing your backlist. (Another indisputable number pattern.)
There's another pesky little detail to consider. Bias. Both readers and authors alike have preconceived notions about quality. You're all familiar with the phrase, "don't judge a book by its cover." Yet, we do it all the time. Indeed, the industry revolves around that tenet. Covers matter. Blurbs matter. There is no possible way for you to decide whether to purchase a book without these things. But, here's something almost no one realizes. PRICES matter.
Think about it. Seriously.
When you see an indie e-book published at $4.99, with a great, professional (probably very expensive) cover, a catching blurb, and more than 200 pages? You assume it's going to be quality, right? You're more likely to buy it, yeah?
I know I am.
What about the $.99 books? I'm not talking about a sale, either. (Come on, be honest. Sometimes you think when a book goes on sale, the author is desperate. It's okay to admit it. I think the same. Depending on the situation, of course.) If the book is priced low, is a full-length novel, and maybe has only an average cover? You're going to pass it up for something that looks like more of a sure bet.
Then, there's the stuff in between. You pay $2.99, everything looks okay on the surface, the blurb grabbed you, and....holy crap! This is a novella with only a hundred pages! WTF?
So, you see my two-fold point. Price matters. Charge accordingly.
That's why I decided to price my books at $2.99. As a new author, I couldn't charge much and still expect readers to pay. On the other hand, these are very long books (T&L clocks in at 135k words) with high-end, expensive covers. It took me longer to break even. Going forward, I'll have to charge more. (Because we all know the chances of me writing a 70k novel are slim to none.) ((See what I did there?))
So, that's it. My attempt at transparency and maybe shedding some light on what the business side of authoring is like. Feel free to contact me with any questions, comments, or suggestions. LOL, God knows I need them.
Happy tax season, friends! ;)
*My husband decided to read this post and made me change all the "wrong" words. Profit should have been revenue. I dunno. He started blabbing stuff at me, but I'm like, "Honey? Just hand everything over to the accountant now."
I told you I have no idea what I'm doing. LOL