John Locke recently became only the eighth author to sell a million Kindle ebooks (and the first self-published author to do so).
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Has this idiot just underpriced a million books?
This caused Carolyn Kellog in the Los Angeles Times to ask at what financial cost to himself Locke did this.
[At 35 cents' royalty per book] Locke makes less money with his 99-cent gambit than he would selling the same number of books with a traditional publisher.
At 99 cents per book, Locke is making 35 cents. Less, Kellog points out, than he’d be getting from a traditional house that was selling his book for a price of 10 to 15 times as much:
In general, [for] authors with major publishers… a $15 e-book brings them $1.50 to $3. Drop the price of the e-book to $9.99 and a traditional author might make about $1 to $2.
(It seems no one has told Kellog that at at $9.99, the self-publisher makes $7 so her traditionally-published author is actually doing a lot worse than John Locke would be at the higher price.)
Now I speak as a journalist when I admit that facts often screw up a good story, so let’s put this quibble aside and commend Kellog on some breathtaking mathematical analysis.
Big numbers are bigger than small numbers
To recap, we’ve learnt from the LA Times that:
1,000,000 x $1-$3
is greater than
1,000,000 x $0.35
Who would have thunk that a million times a higher number would be more than a million times a lower numer!
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Is this your royalty rate?
While Kellog is prepared to give us a flash of her superior grasp of simple multiplication, like all the best magicians she isn’t prepared to give away all her secrets.
Most tantalizingly, she doesn’t tell us what economic formula or publishing industry abacus she’s using to argue that John Locke, humble self-publisher, could only sell one million books at 99 cents while a traditional publisher could have sold “the same number of books” at 10 to 15 times that price.
If [Locke] sold a million Kindle e-books at 99 cents, he’d clear $346,500 — nice work if you can get it. But if he were working with a traditional publisher, that $346,500 might be a lot closer to $1 million.
I didn’t study economics after high school so I’m no Nobel laureate but I was taught that people tend to buy less of something when it costs more.
If it turns out you can actually get the same number of customers while charging 1,000 per cent more, I need to consider a lawsuit for lost earnings against my high school economics teachers.
But I was at school a while ago so maybe things have changed or Californian book-buyers are an exception to prove the rule.
Earning $1 million in LA-LA Land
For a traditionally-published author to be earning $1 million in ebook royalties in Kellog’s universe, his or her publisher would have to be selling:
- one million copies at $9.99 if paying the author $1 per copy sold
- 500,000 copies at $9.99 if paying the author $2 per copy sold
Like vs Like
We should remember that Kellog is talking about a homogenous product: she talks only about ebooks in her article.
That means John Locke and his notional traditional publisher would be selling exactly the same thing: the same words in the same format.
Kellog also doesn’t suggest there would be any difference in the marketing or other expertise applied.
The only differences she talks about are price and royalty.
The world comes down to your oysters
If you read the article, everything — and I mean everything — in Kellog’s mind comes down to the numbers: price and royalty rate.
In Kellog’s economic/publishing theory all that separates the publishers from the self-publishers is that the traditional boys have the stones to ask for 10 times the money.
And the worst that happens to them when they do is that only half of the potential readers drop out, which isn’t a commercial problem because the author is still making three times more money in absolute terms.
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My royalty rate can beat up your royalty rate
In Carolyn Kellog’s world, therefore, real men don’t accept 35 cents a book. (Although, oddly, they will meekly accept $2 a book while the self-publishers are making $7 a book but I’m quibbling again.)
Close your eyes and don’t ask questions
There are a couple of questions you don’t want to ask at this point because they might ruin the illusion.
So don’t under any circumstances ask:
- If it’s just a question of charging more, why wouldn’t John Locke do that himself and earn $7 per book rather than the $1 or $2 he would get from a traditional publisher at the same price?
- If charging 10 times more only costs you half your readers, wouldn’t the self-publisher of a million-seller have $3.5 million-worth of sand ($7 x 500,000 books sold) to throw in the face of the traditionally-published weakling with his mere $1 million in royalties ($2 x 500,000 books sold)?
- How long would it have taken John Locke to find a publisher to agree to publish his book and get it to market? The trifling $350,000 Locke has made so far — “nice work if you can get it” — he made in five months. It would have taken him that long to get his first rejection letter, so he’d have been losing $70,000 a month waiting for traditional publishing. Over, say, a year waiting for traditional publication, that’s $850,000 right there.
Image may be NSFW.
Clik here to view.![Money bag]( "Money bag")
All in favour say ka-ching!
Still, I like the sound of this world in which authors can sell the same number of books or no less than half as many after increasing the price tenfold.
What say you? Has the LA Times convinced you to up your ebook price to $9.99 immediately?
If you’re interested in more success stories, John Locke is featured in our free Inspirations Series (a weekly shot of self-publishing success stories).
Image may be NSFW.
Clik here to view.
Image may be NSFW.
Clik here to view.
Rate this post at: John Locke is an idiot – LA Times
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