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DIY Poetry Publishing Cooperative

April 01, 2008

In practical terms...

I thought it might be useful to show how Amazon's new requirements for POD books (see yesterday's post) will affect some small presses, using my own press as an example. (I realize not every reader of this blog gives a hoot about POD and retail distribution, but a lot of us micropresses and individual self-publishers use these services, so bear with me.)

My press uses Lulu.com for convenience and value. I could have the books printed more economically--I'd still be using a digital short-run printer to do it--but Lulu's distribution packages include the purchase of an ISBN, database listings for Books-in-Print (without which nobody knows the book exists), and availability via Ingram to physical and online bookstores, including Amazon. Lulu also offers online store space at Lulu.com (though personally I don't emphasize it, preferring to encourage people to buy directly from my press). In addition, with my Lulu account, I get a dashboard where I can maintain all my book files, and keep up with sales reports broken down by channel. That's one-stop shopping for me. Extremely convenient.

With Lulu, I get bulk discounts on the per-copy cost--the more books I order, the cheaper they are. I pay an additional flat fee per title of $99.95 for the ISBN, listings, and distribution network access. (Until recently in fact, this flat fee was on sale for more than a year at $50.00, so I took advantage of that. Periodically Lulu offers special bulk discount rates on top of their already discounted rates, and I take advantage of those when I can.)

Working with Lulu this way means I can release a book for less than $100 up front. It ends up costing me more than that up front because I order proof copies, author copies, review copies, and some stock to fill direct orders. (That's when I take advantage of the bulk order discounted rates.) Still, compared to buying a full print run from another digital short run printer (forget offset--a press as small as mine would be nuts to try to afford that), I'm paying less out of pocket up front--and eliminating any risk that I will have unsold or returned copies on my hands down the road. I'm also eliminating the potential cost of damaged copies, and saving quite a bit on shipping, since there aren't boxes and boxes of books being trucked from printing facility to warehouse. Once I place this order, the distribution network channels--Lulu's store, Ingram's customers-- take care of the rest. When a bookstore orders from Ingram, I do nothing. I just log in to view my reports on my Lulu dashboard, and each quarter they send me a check. When a customer orders from Amazon, same thing. I make less Ingram these sales than I do on Lulu.com sales, and I make the most on direct sales that I fill myself. Because I emphasize direct sales, I am able to clear quite a bit more than I would do otherwise.

Remember, we're talking relatively more here. This is still book publishing. I can't afford to pay myself a salary yet, but I can reasonably hope to recoup the cost of purchasing my bulk order as well as the cost of mailing supplies and postage associated with publicity mailings, etc. (2 out of 4 of the books I have released have already hit this threshhold, and I may get to pay myself a pittance after all in 2008.) Like many micropresses, I'm pretty happy to break even, thrilled if I earn beyond that. If I'm shrewd about how I promote the books (the spring tour is going to end up costing me only $200 out of pocket for instance, but that's another show!) I can potentially not only break even but generate enough sales to become profitable. (Again, note that I did not say "rich.") That puts me squarely in the DIY realm of doing this because I love it. While it may sound more like a passion or a hobby than a profession, thanks to the distribution reach and presence I'm able to create with Lulu's service, my books are just as available as Random House's (where I used to work). You can even get them outside the US.

Choosing this model allows me, so far at least, to be a staff of one sitting in my home office. And I have a nonpublishing day job. Compare that to the wages of 10 full timers, a couple of part-timers and a gaggle of interns we used to maintain at Soft Skull Press (where I also used to work), plus the expense of renting office space and paying associated utilities, etc., and you can easily see the how value and convenience make this a good option for me. If I were publishing something other than poetry the volume of sales might be too much for this pared-down scenario. If I had to spend much more time actively chasing down payment for orders, processing returns, coordinating with warehouses, etc. I'd not have time for my day job. Which means I couldn't afford to run the press at all.

On an 80 p. poetry book sold directly by the press, I can clear anywhere from $9 to $12 dollars, depending on how much of a discount I got on my bulk order and whether the customer is a bookstore or an individual. (That's how I can afford to do buy-two specials, etc.) I clear $7 on books sold through Lulu's store, which takes a commission in this case. I get $3.50 on books sold through Ingram, which supplies bookstores...and until this new policy goes into effect, Amazon. This amount reflects not only Lulu's commission, but Ingram's distribution commission and the retailer's cut of the cover price.

Additionally, on every book sold, I pay my authors a 7% royalty on the cover price. That's $1.05 on a $15.00 book. That means with my current set-up, the press retains a little less than $2.50 on Amazon and bookstore orders processed by Ingram.

You can see where this is headed, yes? My press currently makes $2.50 per book sold on Amazon. Amazon will (reportedly) be taking %48 of the cover price. Since there will be no additional Lulu or Ingram commissions on these sales, that translates to $7.80 (52% of the cover), minus the author's royalty of $1.05: $6.75. That's more than I make now on Amazon sales, but less than I make in any other way. But that doesn't take into account the $50 set-up fee per title. This is where it gets a little fuzzy and will affect every POD-based press a little differently.

$50 a year per title may not seem like much--except all that gets you is availability at Amazon, the channel where you make the least money. Even if you stand to make a bit more on Amazon sales, if your press doesn't do enough Amazon sales to reach whatever your total set-up cost will be (determined by how many titles you want to put into their system at $50 a pop), you're just paying more and not earning more. What this means for different sized and differently structured presses will vary. A lot of presses use Lightning Source in a manner similar to how I use Lulu. They print their in-house stock with them and then buy a distribution package to make additional sales possible through Ingram to bookstores. If a small press focuses exclusively on Amazon--through their Amazon Advantage program or as a Marketplace seller, for example--this could be an OK deal for them if they can consolidate digital printing with Amazon availability. My press can't give up Ingram--college course adoptions and bookstore sales for readings are too important. (See yesterday's post; these are two big factors that apply particularly to POETRY.)

I think the real sticking point is this: before this new policy, Amazon availability was already a benefit of distribution via Ingram. I was the press, Lulu was the printer, Ingram was the distributor, and Amazon the retailer. Amazon is changing the terms of the relationship. Amazon, unlike retailers and distributors in the rest of the industry, is taking itself out of an integrated network and creating a closed loop. Because they can. And presses have to pay to play.

My press make the least money at Amazon already, and Amazon doesn't count for the majority of my sales. While my calculations above show that I could clear a better margin per sale with Amazon, running the numbers that way doesn't accurately reflect what I'm getting for <$50 and 48% x number of sales>. For my press, and probably for many others, when I project how many sales I'm likely to do via Amazon, the value of the "service" goes down. If--and as of this morning there's still no word from Lulu--Amazon's new policy affects my press, I will have to decide whether or not to pony up. Even if it's not worth it financially, finances are not my only concern. What will my authors think if they are no longer available on Amazon?

I'm leaving in the morning on the book tour, and won't have much time to think about this (yay!) while I'm away. But when I get back and see how things have shaken out, I'll probably be removing all Amazon links from the press site and encouraging customers to avoid them, even if my books remain available. In my house we've instituted an Amazon ban. I already didn't buy books from them unless I had to, but my husband shopped with them quite a bit, for both book and nonbook things. Not anymore.

There's a petition here. I never really know if those things are effective, but it might make you feel better.

Labels:

11 Comments:

  • F Amazon.

    Have a safe trip.

    By Blogger Jilly, at 10:50 AM  

  • Shanna, thanks for sharing. & have an amazing tour!

    By Blogger shannon, at 12:08 PM  

  • Thanks for the overview. That should help non-publishers understand the plight.

    By Blogger WorldClassPoet, at 12:42 PM  

  • thanks, y'all!

    allen, i tried to email you yesterday but couldn't find an address. which site should i link to--the blog or your main site? (might not get to it till i get back, but let me know and i'll do it asap.)

    By Blogger shanna, at 2:03 PM  

  • http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-printondemand

    hey shanna, wondering if you've seen this yet? anyway thanks for all this info. it's seeping in slowly.

    By Blogger Barbara Jane Reyes, at 5:59 PM  

  • yeah, i saw that last night. (see the final update to yesterday's post.) nice soft spin, ain't it?

    By Blogger shanna, at 6:45 PM  

  • I'll join the amazon ban.

    By Blogger sst, at 10:22 PM  

  • It's Microsoftian pretzel logic
    and a gouge out. Seems like
    the ipetition thing wants to
    take a minimum $2 contribution,
    though. For an electronic
    transac?????? What a world!

    I am going elsewhere for books
    when possible. And radios, cameras,
    used books. Shoes.

    By Blogger JimK, at 10:06 PM  

  • My stepmother likes to give me Amazon gift certs for my birthday & Christmas ... I guess I should tell her to knock that shit off.

    By Blogger Glenn Ingersoll, at 9:53 PM  

  • Shanna,

    Question: Why don't you buy ISBNs on your own? You can get 20 for $200, and you automatically get in Books-in-Print when you register them. Do you opt for Lulu's package because of the distribution? You can get into Amazon easy enough on your own. The same is true of Barnes and Nobles online.

    By Blogger bill, at 9:27 PM  

  • yeah, i could do it that way; we did it that way at LIT, for instance. jack kimball has a comment in the thread above about doing that, and how it doesn't work for faux press.

    basically, for a micropress without a staff, it's a huge pain in the ass. amazon will only take a couple of books at a time, which have to be shipped each time at cost of postage and time, and they take 55% of the cover price on top of that. when they sell out of the 4-6 copies they get, they make the book "currently out of stock" and there's a lag time while you ship them more, etc. with ingram-available POD titles, they can either order some to have in their warehouses (which they do for bloof, based on sales of the authors' previous books) or let them be ordered POD. no unavailability lag times (though the shipping times are about 3 days longer with the POD option).

    i use the LULU distro package because it gets the books availability via Ingram (including but not limited to Amazon and Barnes & Noble), which means any bookstore in the US can order them without my having to process the orders--yay!--or hound bookstores directly for payment (um, sometimes they seem to simply forget?). in addition, i get distribution in the UK and Australia, via Bertrams and Garnders. i can track all sales through only two channels--the lulu dashboard and my the presses direct sales records. basically, it doesn't cost me a whole lot more than doing it directly, and in the long run i benefit more in terms of both time & money from the convenience of having the order fulfillment, bookkeeping, accounts payable, and shipping processes outsourced. i also don't have to keep much inventory on hand (um, in my house), which cuts down on damaged books and returns (and means fewer boxes in my front hallway).

    it just works best for what i am trying to do. i have very few complaints about lulu's service. if you accept their limitations and work within that scope, it can serve quite well. my gripe is with amazon for attempting to capitalize and act the bully. not that it's all that unsual for a corporation, duh, i know; but i don't have to like it.

    anyway, lulu's service has not been impacted in any way that affects us yet, and it may not be. which is great. i don't expect either of the companies to behave benevolently toward small publishers--that's not my point. i'm just annoyed that some of us had found a way to work the system only for amazon to come along and fuck it up.

    By Blogger shanna, at 12:17 PM  

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