This Modern Writer: “Let’s get down to brass tacks, here…how much for the ape?” by Pablo D’Stair

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the first is a series of investigations of costs and considerations

for the indie author

INTRODUCTION

I just saw it again, a particular comment about reasons not to set up through POD channels—it is an argument I have seen more than any:

“If you set up that way, the bulk of your profits are going to the POD while you are left with your measly bit.  Sorry, I’d rather not give away my work—I’ll go through a real printer so I am in control.”

There are about ten million iterations of this, of course, and as I have always come down on the complete opposite side of the coin, I thought I would take a moment to put some ideas out there, see if there is a hole somewhere in my thinking or if someone knows something I don’t know (this will not just be a response to this particular statement, but an investigation based on personal data and investigations made by me over the course of several years).

But, we will begin with the comment, as the germ is in there.

First, the idea of what a POD is needs some clarity, I don’t think it is what it was even five years ago—a POD functions no different than an offset printer other than it is digital or, to put it maybe a tick more correctly, can function as a printer, solely, but with the options of “POD Publishing/Facilitating” atop it.  The POD option, today, means simply this: the book does not have to physically exist until it is ordered, a run does not have to be printed in anticipation of filling orders.  Full stop.  Storefronts do not have to be set up through PODs, the books do not need to be made available through the services, they do not need to be made available publically, at all, and IT IS NOT necessary to cite the POD as your publisher.  One could print up a run and then sell them on their own, handling everything about shipping, etc. in effect just using a POD as a printer.

(A key difference: with a POD a book can be printed in far smaller quantities for far less money than through a printer—one at a time, in fact, though shipping per item that way slightly moots the point—no need to ship it yourself, one at a time, and then reship it, this would be silly)

INVESTIGATION

So, let’s run a scenario:  (Create Space is the only POD service I toss my hat in with, so POD will be altered to CS throughout)

We use the following spec example for this scenario:

The book: 190 pages, trade paperback, 5×8: natural (not white) paper stock, full colour cover (gloss—alas, the one thing I have not found in a POD is matte covers)

Cost per unit (based on CS Pro Plan pricing): $3.13

NOTE: for the sake of this exploration, we’ll assume the prices are the same for CS and short run, when in reality CS would be less expensive than a short run printer for sets smaller than 500 copies—Just to have it out there as this goes on, I have not come across a short run printer that hits CS Pro Plan pricing nearly, most short runs for the above 190 page spec example charge at least $5 per unit, the equivalent to CS Non-Pro Plan pricing.

POINT ONE: What are the parameters of the investigation?

  1. Person A Short Run prints a set of 50 copies through a printer to sell by himself (handling fulfillment, shipping, etc.)
  1. Person B sets up a POD title, no copies produced until sold.

At this point:

Person A has invested: $156.50 to print the 50 copies (we’re allowing no initial set up fee for the sake of balance and because of the wildly differing policies on this printer-to-printer) and $20 to ship them.

Person B has invested: $39 to set up with Pro Plan and $6.74 to get the required proof copy produced and shipped.

NOTE: I will add another $10 to Person B, because they have purchased an ISBN from Bowker via CS that is assigned to their Personal Publisher name, not to the POD (the publisher is listed, for example, as Ajax House and not Create Space)—I will add this same $10 to Person A, though to individually purchase an ISBN tends to cost somewhat more–$35-80 unless bought in sets)

Person A Invested: $186

Person B Invested: $55.74

In red I am going to break down what Person A would be spending if set at average Non-CS Pro Plan pricing:  $5 per unit for 50 units plus $20 shipping plus $10 ISBN: Person A Invested: $280

Point Two:  Both individuals set their price point at $10.  So, how do profits break down?

  1. 1. Person A: When an order comes in for a book, Person A fulfills it personally.  This requires the following general costs:
  1. 1. shipping envelope (there are ways to minimize this, such as just shipping in multiple sheets of paper or buying shipping envelopes in bulk, so to simplify, we are going to call this cost at $0.50)
  2. 2. postage (for a book the weight and size of the one we are working with, a shipping fee of $2.57 is possible, so we will go with this).

Additionally, and this must be pointed out, this individual must invest the time to package up and ship these items, personally—we will not put a dollar amount on this, but it is a factor to mention.

Also additionally, Person A has to set up a method of receiving customer payment, which in this example we will say is Paypal, (but to minimize this out, we will say that they have set the shipping cost option on Paypal to compensate for the slight percentage per order Paypal takes)

So an order comes in: client paying $10 plus shipping ($13.25—to cover shipping and Paypal deduction) and so, really, only the cost of the book needs to be subtracted from the $10 remaining—a profit of $6.87 per unit.

(Non-CS Pro Plan price subtract $5 from the $10 remaining–$5 profit per unit)

NOTE: It of course needs to be pointed out, again, that when an order comes in for Person A, it is up to them to find time to fulfill it—this varies person-to-person, but depending on the time of day an order is placed and the circumstances of this individual’s life, it cannot be absolutely set when an order will ship—this is not the focus of my breakdown, so we will estimate shipments go out within 48 hours and take 3-5 days to arrive to the customer.

  1. 2. Person B: When an order comes in for Person B, it is simply a matter of CS fulfilling it, nothing physically needs to be done by this individual to fulfill the order or to collect the profit.  So, we move on to the financial breakdown.  For an order placed on a $10 book (orders ship in 24 hours; for 3-5 day shipping the cost through CS to a customer is USPS standard $3.61—this sent with sales receipt in sturdy cardboard sealed packaging) Person B would receive $4.95 per unit.

NOTE: Again, it has to be pointed out that this process is automatic—orders arriving anytime are processed and shipped, Person B does not even need to access their account, accumulated profits are deposited each month directly to their bank account—if profits are below the $20 mark, a check has to be requested)

At this point:

Person A Profit: $6.87 per unit

Person B Profit: $4.95 per unit

So, Person A comes out $1.92 ahead per unit!  Very nice.  Both Persons do alright, but a 2 buck lead is considerable.

Non-CS Pro Plan Person A comes out $0.05 ahead per unit

But…

POINT THREE:  How long does it take to earn back investment?

  1. 1. Person A was invested $186 at set up.  At $6.87 per unit he will break even at 27 Books Sold.

(Non-CS Pro Plan Pricing: at $5 per unit from a $270 initial investment, Person A will not break even)

Projecting a sold out run of 50 copies, Person A would clear a profit of $158.

(Non-CS Pro Plan: Person A is under by $30–$250 earned but $280 invested)

  1. 2. Person B was invested $55.74 at set up.  At $4.95 per unit they will break even at 12 Books sold (actually, they will be a few bucks ahead, but it’s silly to say they will break even at 11.26 books sold).

Projecting that they also sell 50 copies, Person B will clear a profit of $188.10

At this point

Person B, at the 50 mark, all things being equal, comes out $30 ahead of Person A.

(Non-CS Pro Plan Person B comes out $218.10 ahead of Person A)

NOTE: It must be pointed out, of course, that if Person A stalled out at 15 or 17 or 20 books sold (CS pricing), they would still be in the hole, while Person B would already be making clean profits.

POINT FIVE: Let’s follow this through one more cycle, though, because it continues to be interesting.

  1. 1. Person A (up $158) purchases another set of 50 for $156 and $20 to ship: this means their profits from the first run go toward the new set, leaving them at a starting point of investing $18.

(Non-CS Pro Plan, Person A (down $30) pays in another $250 plus $20 shipping, leaving them at a starting point of investing $300)

  1. 2. Person B has no new investment and needs to pay no new set up fees etc.  He continues to profit at $4.95 per unit, beginning this second set Up $188.10

At this point

Person A Invested: $18

(Non-CS Pro Plan: invested $300)

Person B Invested: $0 (Up $188.10)

  1. 3. Person A again sells out the run of 50 at a profit per unit of $6.87, earning at total profit of $325.50 ($343.50 minus $18 invested)

(Non-CS Pro Plan pricing they sell out a run of 50 at profit per unit of $5, earning a total profit of $0 ($250 minus $300 invested–$50 under)

  1. 4. Person B: Projecting Sales of 50 at a profit of $4.95 per unit, earning a profit of $247.50 for a total profit of $435.60 (247.50 plus Up 188.10)

At this point

So, at like-rates, after two rounds Person B is up $110.10 over Person A.

(Non-CS Pro Plan pricing Person B is up $485.60 over Person A)

And so on through as many rounds as you want to go.

NOTE: Again it needs to be pointed out that at the purchase of the 2nd set of 50, Person A has to sell at least 3 books to reach zero loss (earn back the $18 investment) while if Person B sells 0 books they remain Up $188.10.  Therefore, in the 2nd round, for Person A to reach even with person B they have to sell 30 copies (188.10 plus 18)—in other words, by this point Person A has to sell 80 copies to Person b’s 50 to be on even profit ground.

CONCLUSIONS**

Based on this scenario, in my way of thinking the POD (CS) method is clearly the way to go to maximize control and profits while minimizing hassle.  However, there may be some method I have overlooked—I do my best, in all investigations, to work with data and prices with no preference in mind, to base my preferences on the conclusions of investigations: if there are other basic methods of set up I have overlooked, I would be indebted to anyone taking a moment to point them out.  Likewise, if someone sees a way this method might be tweaked for the better (for either method investigated) I would love to know these thoughts.



**Alternative Method for Person B (CS):

Not wanting to interrupt the flow of the above investigation with too many lines of thought going at once, I include this following alternative method for Person B, here.

If Person B opts to fulfill orders personally, this can be done through CS without having to print a set in anticipation of orders.  If Person B were to collect customer monies through a Paypal account, they could then use their CS Personal account to purchase copies at their AT-COST rate, which would play out in the following way.

Still working from the $10 per book charge with shipping added in by Payapl, a customer would place and order, paying $13.25 (to keep with the above examples for Person A).  We will reduce this to $12.75, factoring in, perhaps excessively, the Paypal deduction per purchase.

Person B would then utilize CS to place an order, shipping directly from the printer to the customer.  In this case, they are paying, per book, only the exact cost of production ($3.13) and the exact cost of shipping ($3.61) for a total of $6.74 (the order still ships 24 hours from when Person B places it, still takes 3-5 days to arrive, still with receipt and in sturdy packaging).

So, per unit, Person B would be profiting $6.01 instead of $4.95.

In this case, from their initial investment of $55.74 they would break even after 9 books are sold (that is, once the 10th book is sold, they are ahead $4.36—technically they would have to sell 9.26 books to break even, but this is an impossibility, of course)

The profits at 50 copies sold then become $240 and at 100 copies become $540.



Pablo D’Stair is a novelist and founder of Brown Paper Publishing and its forthcoming offshoot Brown Paper Side B.  He is a regular contributing essayist to Montage: Cultural Paradigm, the literary supplement to the Sunday Observer, Sri Lanka’s largest English newspaper.