Direct Selling on Amazon - Advantage vs CreateSpace

If you are self-published, you of course want to be in the Amazon sales channel. I’ve mentioned before that subsidized alternatives such as iUniverse, LuLu, etc are not the best choice for the author since you don’t control price and you are only get a royalty as opposed to the full profit.

The two best options for a self-published author are:
Amazon Advantage – You supply the books
CreateSpace – They print the books on demand

NOTE: It may also make some sense to have an Amazon Marketplace account but I'll cover that separately since it will give you an "ancillary" sales avenue and not a main Amazon page.

In both cases the books can look exactly the same – i.e. no one will know that they are self-published you can use your own ISBN etc. But which one to choose? Let’s start by looking at price.

WHICH IS CHEAPER
While not the completely trivial it is actually a pretty easy thing to determine which will yield you the most $ in your pocket. The factors come down to sales prices and number of pages. Let’s look at some of the facts:

• Create Space has a $40 setup fee
• Create Space takes 40% of list price
• Create Space Printing is .85 + .012*pages
• Amazon Advantage has a $30 setup fee
• Amazon Advantage takes 55% of list price

I’m going to not worry about the $10 difference in setup fees over time they mean nothing. So the real question comes down to how cheaply can you get your book printed.

If we let:
w = your profit
x = # of pages
y = list price
z = printing cost (when printing yourself)

We have the following formulas:
CreateSpace w = y - .40y – (x*.012 + .85)
Advantage w = y - .55y – z

This results in the final equation:
z = .012x - .15y + .85

So let’s say you have a 300 page book you want to sell for $12.00
Z = .012 * 300 - .15 * 12.00 +.85 = 3.6 – 1.8 + .85 = $2.65

So if you can get your book printed for $2.65 or less then Amazon Advantage is the way to go. If your book costs you $3.50 each to print then you would by better off with CreateSpace as you would make $0.85 more per book.

For Michael’s 2nd book Avempartha the specifications are: 344 pages @ $12.95
Z = .012 * 344 - .15 * 12.95 + .85 = 4.13 – 1.94 + .85 = $3.04. Printing prices vary with quantity and I can get books from $4.00 each to $2.07 each so depending on my quantities would decide which would yield the highest profit.

OTHER THINGS TO CONSIDER
There are some other things besides price to consider. Books done through Advantage come from your stock of books – so if you are concerned with having a bunch of books you can’t get rid of using Advantage will decrease your books for each one sold where CreateSpace is going to make the books one at a time and not reduce your inventory.

With Advantage you are going to have to pay for shipping the books to the Amazon Warehouse. So you need to account for additional money there in postage and packing material.

In general, books listed through CreateSpace will always be offered to the buying public at full price. When going through Advantage since the discount is so high (55%) Amazon may offer your books at a 10% or even 20% discount which makes it more attractive to the buyer. Your compensation is based on list price so if they decided to discount it you are paid the same amount but it may offer a more attractive price for the consumer and increase sales. Whether a discount is offered is at the sole discretion of Amazon and you have no control over this.

WRAPPING IT ALL UP
Amazon has some pretty stiff fees associated with it but it is the 800 lb gorilla and you cannot afford to NOT have your books listed on a main Amazon page. The good news is it is remarkably easy to do and they provide some very flexible alternatives for self-published authors

Promote your Signings with BookTour

The release for Michael's Avempartha is about a month away and there is a lot of activity around the book signing tour that will be occurring April - June. There are some tools that I use that I thought I would share with the rest of you. I'll then have a post that "brings it all together". The first item I would like to cover is a great site called BookTour.

WHAT IS BOOKTOUR
BookTour is a site where authors can list their upcoming events: Signings, Lectures, Conventions, even virtual events. Readers who are interested in going to author signings register and get emails and RSS feeds whenever an event is near them. In addition, a number of other sites "pickup" the bookTour feed and you get free publicity by them posting events in their areas (More on this in a minute).

HOW MUCH DOES IT COST
As with many things like this on the Internet there is no cost. This may not always be the case (the site is actually "in Beta" at the moment but I've used it extensively since October 2008 and never had to pay a dime for it.

WHAT DO I DO?
The whole system is very easy the first thing you do (as with most sites is make your profile. They provide a number of places for you to provide "more content" about yourself that people will see when they click through. For instance:

• Your head shot
• An overview of you (Bio, Awards, Reviews, and "blurb" of each book)
• Book Trailers
• List your books (Shows cover and provides links to Amazon and local retailers)

After you have a profile, you simply add the events one at a time. It already has in the system most bookstores, but if you find a venue missing (say if you are doing a signing at a coffee shop you can add that

WHAT READERS SEE
When the reader receives emails, or RSS feeds about upcoming signings if they click on it they will see your profile page along with a listing of all your events. Here is an example from Michael's BookTour Listing:

WIDGET FOR YOUR WEBSITE
BookTour provides a great little widget (plug in) that you can put on your site so that your followers can know where you will be when. It provides "real-time" data that you have entered into BookTour so you don't have to update your website every time you add a new venue - simply add it to BookTour and it will show up automatically on your site. The blue box on the left is the widget as it appears on Michael's site.

This is how you do this

1. Make a 2 column table on your website. In the first column put something simple like "aaa" in the second column put all the content you currently have now.
2. From BookTour do a search to find yourself, and get on your "profile page". On the right directly below the red "Request a visit from this author" button click on the "on my website" link.
3. Decide how many events you want displayed at a time (depending on how long your page is).
4. Where you currently have aaa replace the aaa with the data from the first box. The "number" identifies "your" page as opposed to someone else.
5. Take the code from the second box and paste it directly above the "/body" of the page.

ANCILLARY BENEFITS
I'm sure you google yourself or your book from time to time. One of the great things about using sites like BookTour is you get more exposure on the Internet. First there are the listing from BookTour itself and since it is a fairly large site with lots of links it gets a high SEO ranking. This alone is worth listing your venues here.

Another benefit is many newspapers and other websites are "hooked" into BookTour and take content from it. For instance for this article I did a google and found 5 newspapers that were linking to events I had in BookTour and Goodreads also pulls events from it to present to its millions of online readers.

WRAPPING IT ALL UP
I'm the first one to admit that book signings are not the best way to spread the word about your book - they are time consuming for the amount of exposure and number of sales you actually get. However, they are great for "establishing creditability" for your work. If you are going through the time and effort you need to make the best of it and using BookTour is a great resource to utilize.

Amazon: Making the 800 lb gorilla work for you

I love Amazon! They really know how to do things right. What they have done for book buying is in short amazing. Today's post will be an "overview" of some great things to take advantage of through Amazon. Each of these will take a "deeper" dive but I wanted a top level summary first.

YOUR BOOK MUST BE AVAILABLE ON AMAZON
If you are published traditionally, this should not be a problem. I know of know legitimate publisher that doesn't use this channel so it will be automatic. If you are not-self published and you are not available through Amazon this is a huge red flag - make sure your publisher rectifies this immediately.

When selling through Amazon there are two different ways: Directly through them, or through one of the "marketplaces". Marketplaces are "mini-stores" (you can even make one yourself it is really easy) If you are only being sold through a marketplace - that also is a problem you need to be listed on "Amazon" otherwise you risk not looking legitimate.

SELF PUBLISHERS
If you are self-published, you need to make sure you are in this channel. You have two choices: CreateSpace and Amazon Advantage. I highly recommend CreateSpace because there is just a 40% discount rate whereas Amazon Advantage has a whopping 55%. Even if you have a few thousand books printed up and stored I would send your same print file to CreateSpace so you can get the 15% savings in "Amazon's take". You can find more about CreateSpace in my post about publishing 101.

PRODUCT DESCRIPTION
It goes without saying, but I've seen enough without them to make it a point here...make sure your book has a product description. A product on Amazon without a description is practically useless. How can you buy a book when you don't know what it is about? Using the blurb from the back of the book is usually fine. But feel free to augment it with information such as age appropriateness or whether the book is part of a series. The description is controlled by the publisher so work through them if you don't like what you see. For instance if there is too much "given away" of the plot you might want to negotiate with them changing it.

SITB - SEARCH INSIDE THE BOOK

This is one you can do yourself (if your publisher has not). Notice the two product pictures to the left - The Crown Conspiracy has SITB enabled Avempartha does not (it will as soon as it is released). This allows the reader to get a "sneak peak" inside the book and read the first few pages. Sample chapters are an invaluable selling took (arg....another future post - I should make a list ;-)) people will read a bit and if they like what they see they are more willing to buy.

I'll go in full details later as to how you do this but in a nutshell you submit your whole book to Amazon and they make sure that only a few pages are exposed. Once you have enabled this feature they can see the cover, table of contents, copyright page, and 6 - 10 pages of the book.

BLOGGING ONTO YOUR AMAZON PAGES
Getting "your" message on your product page is a huge advantage and Amazon provides a mechanism for writers to talk directly to their audience through Amazon Connect. To use this feature you will have to verify you are the author. An online form provides you a way to specify the publisher contact information and then once they have verified you are who you say you are you can post information in the form of blog posts directly to any products you are the author of. Here is an example on Michael's "The Crown Conspiracy" product page.

TAGGING
This is an area that deserves its own separate post and I will go in more detail in the future. But for now let's just point out that tagging is very important. It gives you (and others) a way of classifying a product into various categories so that when they search within Amazon for a particular subject your book shows up. In order to tag you need an Amazon account associated with a credit card, but you don't have to buy the product (or any product for that matter) to make a tag. You have up to 15 words or phrases that you can identify with your book. For instance Michael's books has tags such as: fantasy, fantasy series, wizards, magic, etc. If enough people have tagged your book you will get a ranking (the top 100 books in each category are designated as shown here)

There is a great blog on tagging that I highly recommend click here if you want to learn more about tagging before I can post in more detail.

REVIEWS
The number one thing that sells books is good reviews and thankfully Amazon makes it easy for your readers to tell others what they thought of your book. I bump into people all the time both in person and online that say how they loved Michael's book. EVERY TIME I hear that I remind them to go post a review on Amazon. Even with all my nagging there are only a fraction of the people who actually go do it. Why? I have no idea. The most interesting thing is that even those closest to us rarely post and it is the single biggest thing someone can do (besides buying a book) to help support you. At the time of this blog we have 27 Amazon reviews (21 5-star, 6 4-star) and only 4 of them are from people we actually know (and none of them are family)!

Personally, I say the author should avoid reviewing their own book. Sure you can vote for yourself if you run for public office but that is private and many people take offense at writers "blowing their own horn". It is particularly problematic if there are only 1 - 3 reviews. Bottom line about reviews...ask everyone you meet and you'll get a small fraction of those actually posting.

AUTHOR STORE
This is a new initiative for Amazon and it is still in beta. It allows for an area dedicated to a single author where their books can be grouped and it offers: a bibliography, and can include a biography, author photo, and discussion board. I only recently discovered this capability and after I learn more I'll make another post.

KINDLE VERSION
Another item that deserves its own post but for those not familiar...a Kindle is a small electronic device that stores hundreds of books and allows Amazon customers to buy books formatted in a special electronic format usually for a significantly less than the standard cover price. Making a "Kindle version" of your book is easy (again I'll take you through it step by step in the future). It is important because Kindle users generally have "given up" on printed books. If you don't have a Kindle version it is unlikely they will buy the print version so if you don't have one for them to download you'll loose a particular market segment.

More Amazon Tracking

In one of my online social networks (can't remember if it was GoodReads or Shelfari) but someone mentioned another site other than titlez. It is called BookAlert. The advantage is BookAlert does its tracking hourly where titlez does their's daily. I just started using it and it looks really good. I'll let you know more after I've had a few weeks worth of data.

Show me the money – A bit about Royalties

Many people are confused by just how much an author can expect for each book they sell. The reality is “not too much”. And of course every contract is a bit different. I thought I would highlight a few aspects about royalties in today’s post.

ADVANCES
The reason I bring up advances is you will not receive any royalties until you “earn out” your advance. An advance is exactly that “an advance” against future royalties. So if your contract has a $5,000 advance and you earn approximately $1.00 per book then you will receive no royalties until your 5,001st book is sold. Beware of multiple book contracts that do “joint”

So what happens if you only sell 2,000 books? Well you get no royalties but you also don’t have to give back $3,000 worth of the advance. That being said, an author that does not earn out his/her advance is likely not going to be offered a second book deal. Sometimes it is worth having a smaller advance as you have a short bar to hit.

JOINT ADVANCES
Be wary of multiple book deals that specify the royalties as “joint”. For instance a 3-book deal with a $15,000 joint advance is significantly weaker than a 3-book deal with a $5,000 advance for each book. It may sound better because you get more money “right away” but think about the case where your first book passes the $5,000 threshold. It would start earning royalties at this point where in the “joint advance” situation you would have to sell 3 times the number of books before you get the first royalty check.

NET or LIST
Usually your royalty is based on either net sales or book list price. NEVER sign a contract that bases a royalty on profit. Any company who writes a contract in such a manner probably has a number of ways to account for all kinds of expenses such that the book does not make a profit and hence they owe no royalty.

Royalties on list price are the easiest to calculate and typically run about 10%. So a $12.00 book will yield the author $1.20 for each book sold regardless of where it is sold or how much it sells for (For instance Amazon may discount it by 10 – 15% but that does not matter the “amount off” comes out of Amazon’s share not the authors).

Royalties based on net sales are usually higher and will vary depending on where the book is bought from. A typical royalty on net sales would be 25% and since most sales will be made by bookstores buying through the wholesale chain the royalty works out to the same as a 10% list price. But in the rare cases where the book is bought directly from the publisher, or from the wholesaler, or certain online venues it may be higher. For instance books sold by publisher would yield a $3.00 royalty, those sold by the wholesaler $1.80, Since bookstores pay typically 60% of list to the wholesaler the royalty on these would be $1.20.

Check very carefully what the royalty is based on. A contract that is written as 10% net sales is actually a very low percentage.

AGENT FEES
If you have an agent then you will usually have a 10% to 15% agent fee. So your $1.20 royalty will actually put $1.08 - $1.02 in your pocket while the agent gets $0.12 to $0.18.

BOOKS SOLD BY AUTHOR
I have never seen a contract where books sold by the author receive a royalty. What happens in this case is you buy your books at an author’s discount (typically 50% but can be as low as 25%) and the money you make is the difference between the price you sell an the price you bought the book for.

BOOK FORMATS
Many contracts will have different royalties for different formats. For instance mass market paperbacks typically only have a 6% - 7% of list price so for a $6.99 paperback the author gets $0.42 - $0.50). Royalties may be different for trade paperback verses hard cover. Royalties on e-books are typically very high, for instance 50% since the publisher has significantly reduced production costs on these formats.

QUANTITIES SOLD
It is also common to have different royalties based on quantities sold. For instance you could receive 10% List on the first 5,000, 12% on the next 5,000, and 13% for anything over 10,000 books sold.

FREQUENCY OF PAYMENTS
This is another aspect that will be spelled out in the contract but the most common is quarterly. There is usually some amount of time between the end of the quarter and when the check comes (typically 30 – 45 days) while they tally up the sales and write the checks. Some publishers will pay twice a year but this is not standard. I have yet to see a contract that pays monthly as the accounting overhead would be pretty high.

BOOK PRICE
I have yet to see a contract where the publisher lists the anticipated list price of the book in the contract so the reality is you are signing a contract with no clear idea what your actual payments will be. While they may not put it in writing you may wish to discuss with them “their plans” (not contractually binding of course) for production and suggested list price. I highly recommend you look at other books they carry and how they do most of their selling (online, through bookstores, through Amazon etc) and find “comparable” books (similar length and genre) to get a “ball park” so you can at least get a feel for your anticipated royalty.

MORE IS NOT BETTER
If the publisher generally sells for a high price is that good for me? Absolutely not! On the surface of things you might think – ya I’ll make twice as much royalty on a book selling for $24 rather than $12. But ultimately it is the buyer (the invisible hand of the market) that determines the value of the book. A highly overpriced book will not sell well (or at all). Sales are inversely proportional to price. So you might only sell 200 books at $24.00 where you could sell 2,000 books at $12.00.

In fact this brings us to a subject that is the worst atrocity in the publishing business - PublishAmerica. (I’ll do a whole post on them at some time). They claim to be a “traditional printer” and in some respects they are in so far as they don’t ask the author any up-front money to get the book in print. But…they place their list price WAY beyond what the market will bear. A typical example is a 156 page paperback for $24.95. This book will NEVER sell to anyone except the author’s friends and families and at that price they only have to sell a few to make up the costs they put into the book for cover design and layout. Where they actually make their money is authors who buy copies from them to resell on their own (at a dismal author discount – I think 35% off). This means that if the author buys 100 books they get $1,746.50 which is more than most vanity press books would charge. The author ends up selling the books “at cost” so say $17.50 a book which is at least “fairly reasonable” and they make nothing. I even know some PublishAmerica authors that sell their books at a loss – For instance $15.00 while paying $17.47 to buy them just to get a “following” for a second book published through someone else.

BREAKING IT ALL DOWN
So given what we have learned here, and assuming a book is sold through a bookstore who uses a wholesaler (most common) and the author has a agent with a10% commission, let’s examine where the money goes for a $12.00 book:

• $4.80 – Bookstore (40% of list – buys book at 60% discount)
• $2.40 – Wholesaler (20% of list – diff between 40% and 60%)
• $3.60 – Publisher (30% of list – pays wholesaler and author)
• $0.12 – Agent (10% of author’s 10%)
• $1.08 – Author (90% of author’s 10%)

Of course the book store, or online retailer may receive less if they decide to put the book on sale etc. It is common for Amazon to discount books 10 – 20% do the consumer would get a bit of that money back in their pocket.

I hope this helps explain royalties at a very high level. If you have any questions please feel free to add comments below.

Marketing #1: Author Websites

In today's post I thought I would cover your website. I've already blogged on the #2 Marketing tool -- bookmarks so today I thought I should do #1 - Websites.

I was giving a seminar a few months back and one of the authors in the audience said ... you don't really need a website you needs a web presence. I'm afraid I'm going to have to respectfully disagree. Every author needs a website. Period.

THE COST
The cost of websites is minimal. There are generally two aspects to the cost

• Registering a URL (required) - the name of your site
• Hosting (optional)

I use GoDaddy.com and to register a name it is $9.99 a year. And with that you can get free hosting. The hosting costs $4.74 for 12 months ($56.88 for the year). The only difference between free hosting and paying the $57 is that you will have a few adds at the top of your screen when you have a free account.

Here is an example of a website with ads (i.e. free hosting). Everything above the dark bar is put on automatically by GoDaddy. If you pay the $57/year that disappears. I personally think it is worth that small fee to be free of ads.

YOUR URL
I personally recommend that you pick a URL based on your name not your book's name. Even if you have only one book now you might have more books in the future. If you really want to you can buy 2 URL's (your one for you and one for your book). I wouldn't recommend doing up separate pages for both - just have one website and "redirect" to the other. That way you have only one site to pay hosting on and only one site to maintain. To do the redirection make a file called .htaccess and place a line like the following in it:
Redirect /path-of-file-to-be-redirected URL-of-page-to-go-to
So if your names is Johnathan Strange the best URL I would recommend is www.JohnathanStrange.com. Unfortunately there are several authors with Michael's name so we were not able to get that URL because it was already taken - we opted for http://www.michaelsullivan-author.com/. When picking your URL remember that only letters, numbers, and hyphens are allowed.

WHAT TO PUT ON YOUR WEBSITE
In general I recommend you have pages for at least the following:

• Books
• Reviews
• News
• Author Bio
• Contact

THE BOOKS PAGE

Above is a portion of the books page for Michael's website. The books page should have the following:

• The cover of the book
• Back of the book "blurb"
• Reviews or testimonials
• A link to buy the book (either direct from you or Amazon)
• A sample chapter
• Book Trailer (optional)
• Your ISBN #'s

Of the list above - the most important (IMO) are your sample chapter, the "buy link" and your ISBN's. Having a place where people can "try before they buy" is important. When you meet a "resistant" buyer telling them to go read a sample chapter on-line is a great way to convert them to a sale. The reason you want your ISBN listed prominently is that only the most successful authors have their books sitting on the bookstore shelves. For most they will have to be special ordered and coming in armed with the ISBN will make that process easy.

THE REVIEWS PAGE
Reviews sell...period. One of the things you need to do as an author is encourage those you talk to that enjoy your book to post reviews on-line. Then you need to repeat these testimonials on your website. After about 3 months after release Michael's site had 49 reviews (24 from Amazon, 19 from GoodReads, 6 from Shelfari). I made a table on the review page with the date of the review, its source (including a link so people could go to it) what the ranking was (5 star, 4 star etc) and either all or some of the posting. If the person made a long post - I took the "best paragraph" and posted a link to it so they could read the whole thing if they wanted.

NEWS PAGE
This is an important page to show how active you are. If you are not currently doing press releases....start it is a way to generate some 'buzz' about your book and there are a lot of free sites to post your press releases to (again more in another post). Here use the table format like for reviews and list things such as:

• Awards you were nominated for or won
• Author interviews you did (with links to then of course)
• Book Bloggers who reviewed your book (with links of course)
• Upcoming Events - including Conventions, book clubs, and book signings
• Recent News - A summary of all your press releases - did you expand your website, post a free chapter online, make a trailer, go to a conference - these are all things to highlight in your news area.
• Previous Events - Especially important if you don't have any recent book events - this way people can see where you have been in the past and it helps to establish "legitimacy" to your book.

One thing to note - if you use BookTours (Again more on this in the future) - you can put a "widget" on your news page that will automatically list any book signings you have entered on that site. I have one running along the left side of Michael's News Page.

CONTACT PAGE
Always leave a way for readers, reviewers, or others to contact you. This can be as simple as listing your e-mail address or having a form where people can sign in and leave their information and notes. Encourage people to tell you how they liked (or didn't like) your book, or post typos etc. If filling out a form - make sure you store their email address and send them a personal thank you afterwards.

So that's about it for Websites - I encourage you to go out and look at Michael's Site to see how I did his - be sure to "steal" as necessary. I'll talk more in another post about SEO (Search Engine Optimization) but this should be a good amount to get you started.

Intro to Direct Selling

Every author should offer the ability for the readers to buy directly from them (unless your publisher strictly forbids it). If not self published make sure this is fine with your publisher but I've yet to hear of one that does not allow and all encourage this practice. Most publishers sell books to the authors at a discount with the expectation that they will sell them direct.

WHAT YOU WILL NEED

• A good supply of your books (100 - 300)
• A way to accept credit cards (PayPal or Google Payments)
• A "buy now button"
• A promotional offer
• Shipping material (see post)
• Sales Tax

BOOKS
If you are published through someone else. The "author discount" varies greatly from publisher to publisher. I think iUniverse has a 35% discount, Michael's publisher offers 50% discount and pays for the shipping. When signing a contract you should consider carefully what "your cost" to purchase one of your own books should be. Instance, Publish America is well known for high list prices and low author's discounts making it nearly impossible for an author to sell their own books directly (Publish America is a whole topic on itself that I will blog on at some point.

NOTE: if you are published by someone like iUniverse you might still be able to print yourself from what I can see their contract is "non exclusive" so if you can get a print ready .pdf from them no reason you can't have 100 - 300 books printed independent from them - or at least that what it looks like to me - I don't know I would never use one of these firms (we'll discuss that more in the future too).

If you are self-published and using CreateSpace and/or LightningSource to get your books into the distribution chain POD (print on demand) DO NOT buy your "direct sales copies from them. They are setup to do books one at a time and this model by its vary nature leads to a higher cost per book. You already have a digital file - all you need is a bunch of books printed. I highly recommend Apex Book Printing. Let's do a comparison. Let's say you have a 320 page book and you want 100 to sell directly (trust me you can sell this much EASILY). The choices are:

• LightningSource = .90 + .013(320) = $5.06
• CreateSpace = .85 + .012(320) = $4.69
• Apex (from a recent quote) $411.36/100 = $4.11

You will save $0.95 - 0.58 on each book - enough to pay for credit card processing. If you increase the order to 300 (my recommendation) it gets even better:

• LightningSource = .90 + .013(320) = $5.06
• CreateSpace = .85 + .012(320) = $4.69
• Apex (from a recent quote) $1,000.97/300 = $3.33
• McNaughton & Gunn (from a recent quote ($4,356.33/2,000) = $2.18

A savings of $2.23 to $1.36 per book - that is much more than most royalty payments!!

CREDIT CARD PROCESSING
Many people are intimidated by the complexities of setting up an "online store". There are many choices out there and the fees and costs seem intimidating. If you have investigated an "online store" you are over complicating things. I'll make this real easy on you...You don't need an online store - you need a "buy now button". These are as simple to implement as falling off a log. Don't be intimidated. Both PayPal and Google Payments offer "the little guys" access to credit card processing without all the hassles of setting up a merchant account. I've used both and I'm going to focus on PayPal only because it is what I currently use and am most familiar with.

CREDIT CARD FEES
Again if you had a "on-line store" there are all kinds of monthly fees and fees for getting a merchant account and so on. But if you use PayPal there is $0 setup and $0 monthly fees. This is HUGE! Yes their "per transaction fee" is a bit high - but if is more than worth it to have a way for people to buy right away. They don't need to have a PayPal account - they can use any credit card to buy from you.

Okay so what are the transaction fees? If you sell less than $3,000 a month (a pretty safe bet) the fees are $0.30 + 2.9%. So if you sell your book for $15.00 you need to give PayPal $0.74. Not too bad - and trust me it is worth it - you WILL see the difference if you offer this option.

ADDITIONAL BENEFIT OF PAYPAL
When you use the PayPaloption they have a really nice "merchant center" - you come in each morning see your orders and can print shipping labels right from there. It makes it easy to address your orders and you will can add tracking for $.018 and it does MEDIA MAIL labels - again worth the price of admission right there.

NO FEE PAYPAL TRANSACTIONS
There is a way to use PayPal and have no transactions - basically both parties need to have a PayPal account and you transfer money between them -but you can't do that automatically like you can with the other method and it means a number of emails going back and forth between you and your buyer you'll waste more time than the $0.74 it is much more convenient to just check your PayPal account in the morning and find 3 - 10 orders just sitting there waiting for you to process.

BUY NOW BUTTON
Again I'll do a full step by step on this in a future post - but it really is very simple. You go into your PayPal account. Specify some simple settings like the price of the book, various options (signed/unsigned) additional fields for users to tell you more - like if you want to have it signed to someone in particular etc. This gives you a piece of .html code - you just copy and paste it into your site - and presto - people can buy from you immediately with any credit card and you'll get an email and have an order waiting for you to process in PayPal. See I told you it was easy!

PROMOTIONAL OFFER
People always like "getting a deal" and a special offer will bring in more sales then selling list price. The good news is that since you are selling direct you have much more margin to play with and still make a good profit. Plus you have something to offer them that they can't get anywhere else - your signature!

Two choices
Usually I recommend that you offer either free shipping or 20% off the cover price. Either one will work out well for you. If you charge shipping make sure it is not too high. I suggest $3.00 for standard shipping and $5.00 for express. Again see this post for full details on shipping costs.

Signed copies
By default you should "sweeten" your offer with a signed copy. This costs you nothing and adds significant value to the purchase. Some people have asked if they should charge more for a signed copy - I say no. It sends the wrong impression, after all most people here are not household names and they want to create a relationship with their customers. Asking for an extra $1.00 or so just makes you look cheap and "self-important". Take the high road and give it for free.

That being said..you should also offer the ability not to sign. Some people are "funny" about having stuff in their books so give them the option either way. Also add a field (easy with PayPal button) where they can specify "who" to make it out to so they can buy a signed copy for their friends and family - it makes a great gift.

SHIPPING MATERIALS
This is covered pretty thoroughly in this post. The bottom line is budget $0.27 for shipping materials.

SALES TAX
You only have to pay sales tax when people from your state buy your books - out of state sales do not have sales tax. Again PayPal will do this automatically for you (i.e. add it to the order and charge the customer) you just pass this money directly to your states revenue department so there is no effect on the overall profitability - it is just a "pass through" expense.

EXAMPLE PROFIT SCENARIOS
Okay let's take some examples. I'll start with Michael's book which has a 50% author discount and sells for $11.99. When a copy is sold Michael receives a royalty of 25% of the net price paid to the publisher. Since most distribution chains have a 40 - 55% discount this means he gets a royalty of $1.80 to $1.34. (Another common royalty model is 10% of list price or $1.20)

20% discount option + $3.00 shipping
In this option the customer pays $9.60 + $3.00 = $12.60 - just a tad higher then getting in the bookstore but it is signed. Michael's costs would be:

• $6.00 for book (paid to publisher)
• $0.67 for Credit Card Processing
• $2.58 for Media Mail
• $0.18 for Confirmation tracking
• $0.27 for shipping materials

His profit is $12.60 - $9.70 = $2.90 which is 160% - 220% more than his royalty.

Free shipping option
In this option the customer pays $11.99 - exactly what they would pay if they went to the bookstore and a little less than if they did Amazon and had to pay the $3.99 for shipping. The credit card charges change from $0.67 to $0.65 all else remains the same. His profit is $11.99 - $9.68 = $2.31 which is 128% - 172% more than his royalty.

Self published options
If we would have gone the "self publishing" route the equation gets even better. The price per book goes down from $6.00 to $3.33 so the 20% discount option would have a profit of $5.57 and the free shopping $4.98 which is potentially more than four times the royalty.

Selling direct
When selling direct - for instance to friends, co-workers, people at book clubs, people at book fairs the equation gets even better because you usually take cash and don't have the shipping fees etc. I usually recommend a 20% discount when selling direct. For Michael's book I make it an even $10.00 (when selling in state I make it $9.52 so with tax it comes to an even $10.00) this means he pockets $3.52 for each book he sells and would have pocketed $6.19 if self published.

WRAPPING IT ALL UP
Direct selling is the most profitable way for an author to get money in his pocket he receives much more than sales done through bookstores and Amazon where his royalty is a small in comparison. With PayPal there is no setup fees or monthly fees and there is more than enough profit to account for their transaction fees. It is simple to setup and easy to process the sales - simply click to print a label, stick it in a bag, and drop it in a mailbox. If you are not direct mail selling make sure to get this on your to do list right away.

Demystifying the Amazon Sales Rank

I’ve been asked this many times, most notably today on a Shelfari Writer’s Group. How can I tell how many books I’ve sold on Amazon from my sales rank? The answer is simple – you can’t. The formula is a proprietary and a highly guarded secret of Amazon. There are many minds larger than mine who have spent months and sometimes years studying this subject and they can’t tell you either. But that doesn’t mean you can’t find out some good information from your sales rank.

WHAT IS THE AMAZON SALES RANK
The picture to the left was taken from my husband’s book “The Crown Conspiracy”. The arrow indicates the current sales rank is 57,194 which means quite simply that at this point in time there are 57,193 books that are “better” selling then his at this point in time. Sounds pretty bad huh? Not really when you consider the number of books on Amazon (The worst rank I have seen is 6,958,847 (and I’m sure there are larger ones) which means his book sells better than at least 6,901,653. Not too bad in that context. The number really has the most to do with how long it has been since your last sale.

I DON'T SEE A RANK WHAT DOES THIS MEAN
It means that you have not sold a single book through Amazon yet. As soon as you buy one book you'll get a rank.

VOLATILITY
Now keep in mind that the rank is “at that point in time” and the numbers are updated regularly (I did some experimentation and it seems to change once an hour). The best rank I’ve ever seen for him is 27,873 the worst is 527,890. The number can vary wildly even over the period of a single day for instance on Feb 8th the ranking varied from 70,891 - 321,204).

SEASONALITY
Remember to take seasons into account when assessing your sales rank. Students buying for the upcoming semester can clog the top spots with textbooks and paperback classics in the late summer and midwinter seasons. Likewise, books without gift appeal will probably see a significant drop in the holiday months.

HOW IT WORKS?
As mentioned earlier, as soon as a single book is sold you get a ranking. Then the clock starts ticking. For each hour that goes by without a sale you climb a bit higher in the ranking (remember low rank = good, high rank = bad - you would rather be ranked 100 then 10,000). This change in ranking indicates that while you had no sales other people that were higher than you sold and they filled in the spots pushing you further up in the ranking. Then comes the time when you make a sale. When this happens there will be a dramatic change in the ranking. How far you fall depends on your past sales history and "rate" of sales. (How often you sell). Then the process begins again. This forms a series of peaks and valleys and it is the numbers on these extremes that really give you an idea of your sales. Any number "inbetween" is really just an indicator that it has been awhile since your last sale.

DID I MAKE A SALE?
As mentioned earlier, when your rank falls dramatically a sale has been made. What is more difficult to determine is was that a single sale or multiple copies. Presumably if you sold multiple books you would fall lower than if you sold one but there are two many factors related to other books to look at a single drop and say - oh that was a 1 book drop and this was a two book drop. Just because you "fall far" does not mean that a bunch of books were sold.

So, by tracking your ranking often one thing you can do is see when a sales is made.

ONE OTHER INDICATOR
When your book is first published Amazon will, as a general rule, order 2 copies. When you look at your page it will show “In Stock” and below in red there will be a message” Only 2 left in stock--order soon (more on the way). If you watch your Amazon page frequently, as I do, every once in awhile you will see that message come back then go away which means Amazon just went to the distributor to buy more books. If that message comes back and does not go away…then your book is not selling well. Many “older” titles will have both this message and a high sales rank (say 1,000,000 or more) these books are probably selling only a few a year and Amazon will only be buying them in 1’s and 2’s as they sell.

TRACKING HISTORY
While doing my research I ran across a fantastic site - Titlez (it is free) it shows the sales history for your book over time. From this I was able to determine for instance that I sold at least one book today (1/13/2009) and prior to that I sold at least one on (1/08/2009). I also can see there was a large period of time: 10/29/2008 - 11/20/2008 when I sold none ;-( I found this very interesting information. For comparison I tried this on a friend of mine book's Griffen's Daughter: Again it is quite clear when her sales are being made. 12/26/2008, 1/5/2009, 1/10,2009, 1/11/2009. This site even has the capability to compare your books to others. It is a great site.

CALCULATION MODEL CHANGES
Like search engines, who change their algorithms used to find content on web, I’m sure the calculation of Amazon Sales Ranks is revised from time to time so it is difficult to say which of the information I’m about to tell you about is “applicable” at the time of this blog. For instance, I found some data that was obviously old (for instance one post mentioned that rankings for books in the 100,000 – 500,000 range were only updated once a day but I personally saw this not be the case. In a 2008 post from Foner Books they state:

On October 14th, 2004
Amazon made the first major change to their ranking system
that I'd seen in five years. The new system is actually more transparent than
the old system. The new rank is preceded by a # and appears right on the sales
page for any book. There are two main differences between the old system and the
new system. First, the new system includes sales of both Marketplace books (used
and new) and e-books. Second, the new system is based almost entirely on "what have you done for me lately." Historical sales only have a small impact on the
decay rate.

The next few sections are taken not from my “personal” observations but from posts by others. I tried to indicate of the data when possible.

ROUGH ESTIMATE OF SALES
On August 10, 2006 the author of “Math You Can't Use: Patents, Copyright, and Software” (one of those “bigger minds” that I mentioned) wrote an automated script to take sales ranks every 20 minutes. After some analysis here is what he concluded:

1-10	Oprah's latest picks
10-100	The New York Times's picks
100-1,000	topical rants by pundits/journalists,"classics"
1,000-500,000	everything else (still selling)
500,000+	everything else (technically in stock)

SALES RANK TO COPIES SOLD PER WEEK
In a 2008 post from Foner Books they presented the author proposed a logrithmic chart that allows you to approximate the numbr of copies sold per week. If we use the sales rank of approximately 60,000 from the example above then this graph estimates about 10 copies per week are selling. He mentions: "I've seen ranks as low as the mid-three millions for books that have sold a single copy, the line would be completely vertical by around 4,000,000. I cannot stress enough that checking the rank twice and looking at this graph means nothing. You have to get an average rank for at least a week for it to have any meaning at all."

EFFECTS OF TAGGING, REVIEWS, and PAGE VIEWS
Whether good reviews and number of page hits have a direct effect on the sales rank formula is unclear. I have heard that adding tags can "temporarily" effect the ranking, again I'm not sure if this is true or not. My guess is that any effect of "tagging" is short lived and the momentarily spike of good ranking corrects itself.

SOME PARTING THOUGHTS
The most important thing to remember about your sales rank is its temporary and relative nature. The Amazon rating is more like a popularity contest than the litmus test for a book’s success. The number you see on the page is merely how you’re selling compared to other titles in a very brief period. Two or three purchases of the same book within an hour can send a title skyrocketing up the rankings. Sure it’s exciting to leave a few thousand of your competitors in the dust, but unless the buying continues at a good pace, you can slip from the higher rankings fairly quickly.

But in the end, the sales rank is meant to be, in Amazon.com’s words, merely “interesting.” Don’t sweat it if you can’t figure out why your number is exactly where it is. Instead, focus your energy on making your product page as informative and consumer-friendly as possible.