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.
But now we’re talking about cash.
To make cash as an author — excluding the remote possibility that your one book suddenly becomes a best-seller — you might need to reimagine what it means to be a writer.
What does that mean?
It means that you might have to have more than just books to sell.
You might need to have a range of products and/or services which you can ‘upsell’ to the reader. ‘Upsell’ means to persuade a customer to buy something additional or more expensive, usually during the initial sales process.
Most successful businesses have a number of ways they can increase the value of any initial transaction with a customer. You will have encountered this yourself, from buying extras in fast food restaurants to acquiring bolt-ons for your phone to purchasing additional materials when you sign up for something online. Many, many companies make more money from these ‘upsells’ than they do from the initial sales, including some of the wealthiest companies in the world: Apple, for example, makes far more money from accessories than it does from the iPhone or iPad; Amazon makes packets of money with their ‘Customers who bought this also bought….’ links. Camera shops, supermarkets, car dealerships, appliance manufacturers — all of them have ‘bolt-on’ products which generate income from the original sale made to one customer.
These upsells fall into several categories:
You can add to quantity (‘Buy one, get one free’, ‘Customers who bought this also bought….’).
You can upgrade.
You can add on accessories, including associated merchandise.
And so on.
‘Merchandise?’ you might protest. ‘But I’m a writer! I don’t produce merchandise!’
Remember the thing about money?
If you want to write just in order to get your work out there and feel satisfied that a few readers have encountered it and you’ve made a few people happier or created a few emotional effects, fine — stick with the first two parts of the marketing strategy and don’t bother doing anything else. But if you want to make any kind of viable money, you need to use your imagination differently.
What kinds of upsells could you offer?
There are at least 6 kinds of upsell which might apply to writers. You might be able to think of more:
1. Premium Versions
Offering premium versions of your books, including arrangements that are sold at several levels of quality.
Optional added features like maps or audio versions or illustrated editions or even videos, depending on the type of thing you write.
Allowing a reader to customise the design or look of a book such as type of cover or design of interior pages.
Could you offer support or professional services? Teach others how to write like you? These kinds of offers might establish a close relationship with the reader that may lead to extensive future business.
5. Popular Items
You might be able to offer popular further items that aren't necessarily complementary to your book. For example, a range of posters, pens, car door or fridge magnets, letterhead, hats, business card magnets, mousepads, t-shirts, or even foods.
6. Priority Items
Could you provide some kind of club membership? Being a member of ‘Such-and-such Author Fan Club’ might cost an initial fee but then provide savings later.
Every offer would need to be relevant to the reader’s initial purchase. Every offer would have to be consistent with the original intention to add value to the reader’s experience.
Every offer would be intended to increase margin.
What’s going to happen if a reader starts down the checkout process for a £9.99 book from your website?
First, they might be offered a premium version, then added features like maps or audio versions or illustrated editions and so forth, then the option to customise the design or look of their book, then maybe support or professional services, then a range of posters, pens, car door or fridge magnets, and perhaps a club membership. Not all of these things might fit with you; you might want to tailor them down to something that you feel comfortable with and which offer your reader an enhanced experience. But each step upsells the reader so that your margin is increased. Now, instead of making just 50p a book, you might end up making much more — depending on how you priced each of these steps, of course.
A premium version might yield an additional £10.00; optional added features could provide a further £5.00 profit; customising the design or look of a book could be priced at £20.00 or more.
And so on.
You get the idea.
Of course, not every reader will opt for these upsells, but without any upsells you are guaranteed to make only 50p per copy sold. With the optional upsells, you might make an additional £50.00 or more occasionally.
If you’re interested in such things, you could expand upon your club membership or professional services and end up charging customers thousands of pounds for valuable items or knowledge or experiences which you could build into the single action of buying one of your books.
Ask this simple question: ‘What else can I sell to the readers I am acquiring?’
It might open your eyes to new possibilities.
None of this may interest you. You might want to continue to picture yourself as a simple writer, sitting in a quiet room writing books, and more or less depending on luck when it comes to money. But if you want to become Cause over making money as a writer, these things are worth considering.
And there’s more.