Grow Your Marketing Part 5: Increasing Your Margin
Your ‘margin’ as a writer is the amount of money you make on each book sold.
Typically, an author might receive an advance and 10% royalties on net profit from each book. (Clarendon House offers a generous 50% royalties on net profits for its selected authors.) If a book retails at £15 per copy, the profit might be £5.00, which means the author would make 50p per copy sold. That means that he or she would need to sell more than 17 books an hour, 8 hours a day, all week, in order to generate the UK minimum wage.
So how do you increase your margin as an author?
Your initial thought might be, in this world of independent presses and self-publishing, why not just put the retail price of the book up? If you boosted the price to £25.00 and made a profit of £15.00, this means you would make £1.50 per copy sold. So now you’d only need to sell about 6 books an hour to make that minimum wage — ‘only’ six books an hour, 8 hours a day. Most self-published or independently published authors sell less than 6 books a week…
All this arithmetic isn’t helping. And you can’t really raise the retail price of a book very much — the long-established market for books has determined an average price, and readers simply won’t pay outside that range unless it’s been signed or is a collectors’ edition of some sort.
These are the facts of life for writers: they sell products which only need to be purchased once to provide multiple consumption; they have to sell tens of thousands of copies to achieve viability; and the price per unit has to be very low in order to fit with market perceptions.
It’s a tough business model.
So how does a writer make money?
Increasing Your Margin
If you’re selling less than 6 books a week — sometimes far less — but you’re aiming for a viable career, you probably need to rethink your business model.
So far we have established that a successful marketing strategy for writers is composed of a set of Activation Offers — in a writer’s case, that means lots of well-written short stories circulating in a carefully chosen marketplace — and a brilliant Portal Product, a purchasable item which acts as a gateway to wider work. The Activation Offers get the writer’s name out there and trigger impulses to buy; the Portal Product creates actual paid readers. Neither of these stages makes much money, if any.