The Reality Of Print On Demand Publishing Today

I've been advocating the use of print on demand for new publishers and self publishers for most of this millennium. I've wasted a lot of electrons on this blog fighting over definitions, like the difference between POD technology and the author services companies that have sprung up around it, but all that now seems likely to go by-the-by as the new POD may just be renamed "Amazon printing." Tomorrow may see the "Buy" buttons for all of my titles disappear from Amazon, and if not tomorrow, next week or next month. If and when that happens, I'll put my title "Print on Demand Book Publishing" into revision to prevent new copies from being printed and think about doing a revision or a new edition. I won't play any games looking to restore my "Buy" buttons through back doors, I'm too crotchety a coot to knuckle under to the Booksurge crowd. But I won't call for boycotts or tell other publishers, and especially self publishing authors, that they should put Amazon behind them and move on.

The reality of the business is that there are only two real outlets for the majority POD book published by self publishers or author services companies. The main outlet or retailer for most of these titles is the author. Authors who choose author's service companies often forgo Amazon and distribution access to save fees, and the only sales generated therefore come through the author purchasing and reselling books by hand, or through sending customers to the website of the the author services company to purchase the books. While the number of books sold is not trivial due to the huge number of titles involved, the quantities sold for the vast majority of authors are non-commercial. Most may sell under 10 copies, but whether it's under 10 or under 100 matters primarily to the author and the readers, not the IRS.

The second major outlet for these books is Amazon. Amazon lists all of these books for sale, and Amazon is the world's biggest book retailer. Most self publishers labor under enough difficulties; lack of experience, lack of marketing, non-commercial acquisitions process (ie, writing what they want) and limited resources. For a new self publisher to ignore the biggest book retailer in the world, and the one that will absolutely stock and sell your books if you play by their rules, would be self destructive. While some self publishers may be rejected as too small by Amazon's Booksurge printer, they can sign up through Creatspace for POD or go through Amazon Advantage and supply books printed any way they want. Even though Advantage requires 55% discount and the publisher pays for shipping, it's still a decent deal by industry standards. It's just a different economic approach than the short discount publishing I first described five years ago, but it has some compensations in flexibility of book design to offset some of the financial drawbacks for a serious publishing business.

But lest you read this a defense of Amazon's practices, there is the other side of the coin. While Amazon is not a monopoly printer of print on demand books, and I'd estimate they have a low single digit percentage of market at the moment, I believe they do hold a disproportionate share of the retailing of print on demand books. I'm one of the few self publishers using print on demand I know who has been able to get some stocking of a title in bricks-and-mortar bookstores by way of regular distribution channels (Ingram). Self publishers as a group are hugely dependent on online sales, with most of the self publishers I know getting 75% or more of their sales from Amazon. For publishers like myself who count on our own websites as our marketing platforms, we can certainly shift a proportion of our sales elsewhere, though we'll lose out on the multiplier effect that made Amazon our first choice. But most self publishers have no marketing, beyond their use of the Amazon platform. Not having their books listed with "Buy" buttons on Amazon and possibly disadvantaged in their visibility as well will be the end of any hopes for real sales success they may have. I cannot over emphasize that Amazon isn't just the world's biggest bookstore, in my estimate it is the dominant retail platform for the sale of self published books.

I'm confident that my own publishing business will survive with or without Amazon for as long as I care to continue writing and selling books, but that's because my business model has always been centered on my website rather than Amazon. If Google decided tomorrow that they were only going to send visitors to websites that paid Google to host the sites in order to "better serve their users", I'd be in serious trouble. Putting all your eggs in one basket may maximize chickens over the short term, but nobody I know would recommend Blanche DuBois as a business planner.

A New Amazon Mandate? Say it ain’t so, Jeff

The essential difference between modern publishing and the traditional publishing model that was in place from the Great Depression to the mid 90’s is the increasing power of the retailer. When the majority of books were sold to thousands of independent bookstores and libraries, the publishers were the more powerful party. Preceding the shift to the retailer as king was the merger mania of the 80’s and early 90’s, when a few mega-trade publishers were left standing where dozens of large publishers and hundreds of mid-size trades once stood. A new generation of book retailers took a lesson from the mega-trades and the bulk of the trade books are now sold through a mere handful of retailers. In 2001, the American Booksellers Association settled their suit alleging price discrimination against Barnes & Noble and Borders for a fraction of their legal costs. Amazon was barely on the radar when the lawsuit began. By the time it ended, Amazon was selling around a billion dollars of books a year.

Amazon’s North American media sales ran neck-and-neck with the entire Barnes & Noble chain in 2007, with both leaving Borders in the dust. Perhaps more surprising is that Amazon’s overseas media sales are nearly on par with their North American sales, at $4.6 Billion. Put together Amazon’s media sales at home and abroad and they easily top the combined sales of the Borders and Barnes & Noble book chains. Amazon has grown from the world’s biggest bookstore in terms of titles stocked to the world’s biggest bookseller in terms of copies sold. Such a concentration of retailing power makes Amazon a “must have” outlet for publishers, and to date, nothing has been easier for publishers than getting Amazon to sell their books. The options were many, from a direct relation through Amazon Advantage for small publishers, to a hands-off distribution relationship, to having books printed by Lightning Source or Replica on demand and sold new through Amazon. The growth of Amazon to date has been a huge boon to self publishers, and as witnessed by my Amazon Associates account approaching ten thousand item sales, I’ve played my small role in their growth.

The most sophisticated book retailer in the US today in terms of vertical integration of publishing and bookselling has been Barnes & Noble. But Amazon has been building their internal media production capacity, with the acquisition of Booksurge for on demand printing, MobiPocket for ebooks, CustomFlix for DVD’s and most recently Audible, for audio books. Publishers have waited eagerly for Amazon to start offering competitive and creative services, and Amazon offers a number of flexible new options through their CreateSpace division. But there were also some early signs that Amazon’s increasing internal capabilities could lead to their eliminating existing options used by many publishers. When Amazon dropped Lightning Source ebooks a month after making the MobiPocket deal, I wondered out loud at that time whether Lightning Source on-demand books could be far behind.

It appears that Booksurge has chosen this month to make a push to grow their list of publishers, but the tactics used most closely resemble the Godfather’s “offer you can’t refuse.” According to Angela Hoy, Lightning Source publishers

"…are basically told they can either have BookSurge start printing their books or the 'buy' button on their Amazon.com book pages will be 'turned off.'".

What’s troubling about this and other stories I’ve heard of from Lightning Source publishers is that BookSurge reps have had the gall to hide behind the claim of better serving Amazon customers. Since Amazon can already have any of these books drop-shipped within 24 hours, the main benefit I can see would be for customers enrolled in Amazon Prime. When policy boffins in Massachusetts decided to push “universal health care” in the 90’s, they started by legislating away the availability of major medical policies in the state. The option for citizens became, join an HMO or go uninsured, with the expected results. The state later pointed at the very uninsured they’d created as a reason a mandate was required. I see the Amazon Prime program is a sort of HMO for book buyers, a luxury version of mail-order (2nd day delivery) on all orders for a flat annual fee. People who choose to buy into the Prime program have a high motivation to utilize the service and order as many items as possible through Amazon, since the bulk of the delivery cost is pre-paid. And that’s fine, as long as consumers and publishers have a choice.

By allegedly attempting to strong-arm publishers into using Booksurge, which is a losing financial proposition for many publishers compared to staying with their current printer, Amazon may well make a few more books available for Prime shipping. If they choose to see this as a benefit for their customers rather than an audacious attempt to build their own vertically integrated publishing operation at the expense of competitors, I suppose they may sleep easier at night. But Amazon is a huge corporation with plenty of room for mistakes, and I’d like to believe that some rogue operators in their publishing division have been overstepping their responsibilities. Otherwise, it bodes ill for the future of the publishing industry to see the new retailing behemoth so rudely throwing its weight around. I just hope that we’re seeing the behemoth’s grafted on tail wagging its body, and the head at Amazon will find out what’s going on and put the tail back in its place.

Interview with Mark Long, Publisher TSTC Publishing

Mark Long is the publisher of Texas State Technical College Publishing. He blogs about the industry at TSTC Publishing's Book Business Blog.

1) Academic publishing is usually a short-run business where POD makes great sense if the quality is sufficient. What percentage of your titles are currently POD vs. offset?

All of our books are done via POD. Right now we do three print runs a year-one each for the fall, spring, and summer semesters-based on the textbook orders for an upcoming semester. Ideally, sure, we'd like to get to where a significant amount-say, 25% to 50%-of our titles had the sales (and stable/fixed content) to justify offset runs because the lower per unit cost would increase profit margins. Then again, if it wasn't for POD we never would have gotten our operation off of the ground; many of our titles are custom work for particular programs at Texas State Technical College and/or need to be updated regularly because of ongoing curriculum changes based on industry needs. We'd have already gone broke printing 2000 copies at a time to sell 150 copies that needed to be updated the next semester or two anyway.

In a sense, that can be both the blessing and the curse of POD. Short runs are economically feasible and from semester to semester the text can be relatively fluid and organic because we're not printing 5000 copies that have to be sold before we can pick up corrections/updates in a reprint. (And you don't have the ongoing setup costs of making those updates via a series offset reprints.) But, with the number of titles we actively have in print-around 20-25 right now-over the last year I've seen that we're progressively spending more time on an upcoming semester's print run instead of putting more new titles together as we'd like. So, we're looking to deal with that issue over the next couple of semesters by getting on a fixed schedule to update any given title once a year at the most.

2) Is the acquisitions process for your textbooks driven by the needs of the college or an independent business model of your press?

Initially, because of the increasing price of off-the-shelf textbooks that didn't dovetail that well with the TSTC's programs, our plan was work primarily with faculty who had a desire to put a textbook or lab manual of some sort-especially in those cases where they had already been working on their own to develop those materials so that the development time on our end was relatively short-to produce books that generally fell into the $30-$50 range. We also folded in some other publishing the school had been doing on an ad hoc basis, technology forecasts in particular.

The thing that happened after the first couple of years was that we had a wide assortment of books in a lot of different areas: some health related, some computer, some developmental math, some philosophy, and so on. And some were strictly custom work-books for one program at one college-with no market for outside sales while others did have the potential for wider sales.

So, while we still actively look for projects inside and outside the TSTC System, we're also beginning to commission projects on a work-for-hire basis that we think have good sales potential. That's the theory behind a freshman orientation textbook specifically geared toward technical college students we have in development and a series of technical program career guides as well.

3) I think you started the TSTC Book Publishing Blog for internal consumption, yet your readership obviously goes far beyond that. Has the outcome of your blogging surprised you, and has it changed the way you work?

As an old college English teacher-I taught freshman comp for about ten years-the blog was a way to talk about the learning process all of us at the office are going through in becoming book publishers. I also had this idea that it would be-to use the buzzwords du jour-a Web 2.0 new media marketing vehicle.

As it's turned out, though, since the blog is more about the mechanics of publishing than the titles we've put together, I can't say we've ginned too many sales from it. On the other hand, we've made some good contacts. In particular, we found the writer we contracted with to do the freshman orientation textbook for us because of a comment she made on our blog about a publisher she had worked for I had written a post about. And it's good, given the high degree of transformation and flux in the publishing industry right now, to actively participate in the ongoing "conversation" about those ramifications instead of just lurking around the fringes.

4) Industry pundits often point to colleges and libraries as the primary market for ebooks, something I don't currently see, but I've always felt ebooks would make a great textbook replacement for weight and environmental reasons. What's your take on the future of ebooks in academic publishing?

On the one hand, I'm still unconvinced that there is an imperative reason to buy a $400 device to read an eight dollar paperback. It just doesn't make sense to me. And, as far as straight academic publishing goes-original critical research-I think it will take a long time for tenure committees to see ebook (or even a lot of POD) publications as "real" publications.

On the other hand, I think textbooks in ebook format could really be the killer app that ebook reader manufacturers have been looking for. Who wouldn't want to have all of their textbooks digitally stored on a Kindle (or whatever) instead of lugging a giant backpack of books around? And with the printing/distribution costs cut out of the equation, retail prices could be half of what they are right now while increasing profit margins, much like SafariX (I think they're CourseSmart now?) has done with Web-based subscriptions to select textbooks.

The biggest problem I see is with the digital rights management issues. I mean, if I want to read a Stephen King novel I don't really want to hunt around for a bootleg PDF on the Internet to read on a screen or print out and put in some giant notebook. But if I'm in a college class, I could probably care less how or where I get a book or what format it's in as long as I can access the information I need. Combine that with the fact that college students are infinitely tech savvy when it comes to cracking DRM protocols and permissions and you wind up with a situation where the potential market is huge but the potential to undercut yourself because of the nature of your typical consumer is almost equally as great. Basically, once ebook readers-whatever actual device comes out on top in the coming format wars-become ubiquitous enough that the price drops way down or have enough value added features-I went to an interesting session this week at the Publishing Business Convention & Expo about epaper-to make pirating more trouble than it's worth, etextbooks won't take off like they could.

Cost To Publish A Book

Yesterday I rejected a blog comment by "Miriam" asking how much it costs to publish a book. I didn't reject the comment because of the question, but because of where it appeared, on a recent interview post that had nothing to do with the subject. My contact information is all over this website, if you want to ask me a question, please don't tag it onto a random blog post, just e-mail it to me. I've written more about the costs of publishing than anybody else I'm aware of, so I did a little Google experiment.

If you Google "Self Publishing Cost", the top two results are both from this website. The first discusses in depth the cost of publishing a print-on-demand book with Lightning Source. The second discusses the cost of publishing a book on an offset press. Here's an old blog post that contrasts POD with offset, and here's one that looked at color on-demand economics. Another post goes beyond printing, to the cost of editing and book design, and here's a rather long post that got into the risks and profits in publishing.

But there are two costs that I don't often write about directly, because they involve putting a price on my own time. As a self publisher, I don't purchase the rights to manuscripts, I write my own. Long time readers know that I considered publishing a book version of this blog a couple years ago, a fact I was reminded of that early this week when it showed up in the Amazon catalog:-) If I were to publish a book of blog posts today, maybe taking the top 100 of the nearly 350 posts I've written, we could estimate my time investment at over 800 hours. The vast majority of that time would be attributed to writing the posts, but there would also be time spent on selection, cover design and web management overhead. I'll leave out time spent in correspondence. If I lowball the cost of my time at $25/hour, that's a $20,000 investment. Do I believe a collection of my blog posts could earn $20,000 in gross sales (let alone net), not to mention the cost of editing and proofreading? Not a chance.

A second example would be the cost of writing the laptop repair book I'm waiting to get back from my editor. While I've been writing about the subject for years, the book was basically written from scratch, starting last summer, and involved a good deal of research into esoteric problems to distill what I thought was necessary for mainstream readers. I'd put my investment at roughly six months, and I'll let you assign my salary. Do I think I'll earn it back with the book, which I'll launch as an ebook and which may never make it to paper? No. While it's possible, it's really an example of a writing project that got under my skin until I had to finish it, but given the approach I took to the material, I think the market will be limited.

The obvious point I'm trying to hit poor Miriam over the head with here is that the cost to publish a book isn't some one line answer. I could say that none of the books that I published through Lightning Source cost me more than $100 to publish, but that would only include the setup fees. The setup fee to publish a book by any methodology is the most inconsequential cost involved. And none of the above discussion even touches on marketing, though in my case, the excerpts on my website do all the book marketing. But I hear again and again from potential self publishers who explain to me at great length that they only have a very limited budget publish their book. They also don't have any time to spend researching or promoting title, so could I just whisper the secret of success in their ears. All I can whisper is, "Good Luck".

2008 Publishing Business Conference And Expo

I finally made it to a worthwhile publishing conference. I've written in the past about my ideal publishing conference, and I've attended a number of publishing industry shows that were a complete waste of time for me. I'm not in the market for a million dollar printer, offshore outsourcing or integrated inventory and contact management software. The only thing I want from a publishing event is information, and I'm always prepared to give in anticipation of receiving. That and I have a big mouth:-)

The 2008 Publishing Business Conference And Expo in New York City was a show I'd never been to before, put on by Publishing Executive and Book Business magazines. Thanks to a rare schedule conflict, I only made it in for a half a day, the second afternoon of the conference, but what I saw was enough to make me want to return. The mix of attendees was excellent, ranging from small publishers to large trade publishers, consultants, and people seriously involved in book production. The floor show was primarily taken up by printers and binders, many of whom catered to smaller publishers, or at least smaller print runs.

I only had time to sit in two sessions, but both were worthwhile. The first was titled "Digital Strategies: Getting the Most Bang for your Buck" with Laura Dawson presenting. Laura publishes The Big Picture newsletter, and showed an expertise in book industry systems. A good deal of the discussion turned on the practical application of ISBNs to ebooks, with the current industry position coming down on the side of assigning an ISBN to any text that a publisher wants cataloged for sale. I got involved in the discussion (from the floor) pointing out that Amazon offers a work around and reporting on some of my own ebook experiences. I didn't let slip that I know publishers who not only update books without changing the ISBN but actually change the copyright date as well, because I was afraid of giving her nightmares. It's clear that the traditional publishing industry bases their systems on the sanctity of ISBN numbers, while up-and-coming publishers just want to sell their books and ebooks, and the devil take the hindmost.

The second session I sat in was titled "Choosing and Implementing a New Content Management System" with Joeseph Bachana presiding. The panel discussion participants were Aiden Colie of Time Inc, Interactive and Larry Tunks of The Congressional Quarterly. I'd expected a hum-drum "why choose this platform" type lecture, like a dog-and-pony show for Joomla I'd attended a month or so ago. Instead, Joeseph led a very interesting discussion about the challenges and compromises involved in creating a large scale content management system, with Aiden and Larry offering real-life examples from their websites. In one case, the choices that the publisher made in adopting their content management system actually let them out-compete and acquire their chief competitor. None of the participants even hinted at the existence of a turn-key solution that could meet all the needs of a publisher, which may have come as a shock to some of the audience. These guys weren't selling dreams, they were talking turkey.

What I missed at the Publishing Business Conference was a chance to talk with people, because I literally ran in, walked the floor show, took the free lunch to eat in the first session and left from the second session directly to the train. However, I didn't come away empty handed, as you'll see in the video, shot on a fire escape for that New York City ambiance. I even arranged to have a loud truck drive by!

Interview With Steve Weber

Interview with Steve Weber of Weber Books.

1) You have the best batting average of any self publisher with four or more titles that I know, essentially hitting 1000. How do you select the topics you write on?

It's a combination of my personal interests and what I think will sell. I couldn't motivate myself to write about something that I'm not obsessed with. The first book I wrote was about bookselling (selling used and collectible books over the Internet), which had been my full-time occupation for the previous five years. It was virtually the only thing I thought about. Everyone accused me (and rightfully so) of talking about nothing but bookselling, so eventually I decided it would be smart to write a book about it.

So I have to eat, sleep and breathe something to even start writing. However, I've had some book ideas that I dropped because I didn't think the book would sell. For example, I recently had the idea to write about expatriation -- how to relocate to a foreign country to work or retire. By chance, I heard a radio program about it and got excited about the topic. Dozens of people were calling into the show with all sorts of interesting questions. I had enough personal interest to write it, but when I looked at the existing books on the topic, I discovered they were horrible sellers. So it would have been an interesting book to write, but I don't write books for free.

I've also dropped book ideas because I realized I didn't have enough experience to write on the topic. For example, this year our family adopted a toddler from another country, and I got the idea to write about international adoption. After reading a few books on the topic, however, I realized I couldn't be credible. The existing books are by eminently qualified people with decades of experience in the field.

So I guess I need three essential ingredients write: an intense interest in the topic, the confidence that I can do it well, and an expectation that I'll make money at it. And of course, I'm talking about how-to books. Fiction is a whole other kettle of fish, and I leave that to the people with real talent.

2) Of all the techniques for online marketing you discuss in Plug Your Book, which is your favorite, in terms of both the doing and the results?

It's so hard to know exactly how people decide to buy your book. But if I was going to make a hunch about what has been most effective for my books, it would be asking people to review them. And I'm not talking about mailing out 1,000 review copies to a list of "book reviewers." I tried that and I know for sure that it didn't work. What I'm talking about is personally asking people to read and review a complimentary copy of your book, and to post an honest review on Amazon. Finding reviewers is a very tedious process, I don't enjoy it at all. You've got to figure out who might be interested, then approach them. But if the book is good, I think the effort pays off, so the results are enjoyable.

Like most authors, I wish that book marketing was a simple process -- that you could just place advertisements everywhere, then people would discover your book and buy it. But the ugly truth is that unless you're famous, advertising doesn't work, and if you don't do a good job of promoting your book, nobody else will.

3) Given your online presence and track record, I'm sure you get many requests to act as a publisher for other authors books. Have you ever been tempted?

Actually nobody has asked me to publish them. What happens all too frequently, though, is I get fiction manuscripts from a would-be novelists. They want me to critique their work and help them find a "real" publisher. Why on earth they think I'm qualified to do those things, I'll never know.

But I probably will try publishing some nonfiction written by others in the next couple of years. If someone dropped a good manuscript in my lap, I'd do it now. What I'll probably have to do, though, is identify a good idea myself and hire someone who can write it.

4) Given your success, if you haven't received an attractive trade offer to buy out your list as an imprint, I'm sure you could get one if you looked. Do you have an exit plan from self publishing, or do you plan to keep going for the indefinite future?

I haven't had any offers. I've had one nibble from a trade publisher, so I said "make me an offer" and that was the end of it. I'm either flying so far under the radar that nobody knows about me, or publishers don't bother because they know they can't offer me half the money I'm making already.

So I'm going to keep on doing exactly what I'm doing, just more of it. My only possible exits from self publishing are coronary disease or Alzheimer's.

Healthy Fear Of Rejection Or Self Fulfilling Prophecy

I've been reading the Waverly Novels by Scott, and laughed out loud when I came across the following exchange from The Antiquary. An older, somewhat experienced writer is questioning a young friend about his literary ambitions, who states:

I have no instant thoughts of publishing.

The antiquary responds:

Ah, that will never do, you must have the fear of the public before your eyes in all your undertakings.

One suspects this line reflects Scott's own view on the subject. If you love classic literature, it's informative to read the autobiographies of the the authors. There's none of this modern or post modern baloney about the purity of art and blah, blah, blah. The authors who wrote the great works of English literature did so with the public before their eyes. In many cases, as with Scott and Trollope, the author may address the reader directly from time to time, explaining how the story is being arranged in a manner the author estimates will best please the public.

A healthy fear of rejection is a necessity for any self publisher who is publishing as a business rather than as a hobby. But too much fear of rejection leads some writers to go into a defensive mode, where they try to protect their egos by predicting their own rejection by the public before the public ever gets the chance to read them. To paraphrase briefly from an e-mail I received the other day:

I'll understand if you think I'm nutty or don't want to be bothered looking at my website. Don't bother responding if you're busy. I'm not going to pester you if you don't want to answer this email, nor get angry if you think my book stinks. I've become entirely inured to rejection.

I answered, in part:

Don't write strangers and go on about how maybe you're a crackpot. I assume you want your work to be taken seriously, so take yourself seriously. Nobody else will if you don't. It sounds like you're deep in some defensive crouch so your feelings won't get hurt, but it makes your attempts at communicating your work a waste of time.

While it's important to take your ultimate audience into account, if you have something to say that they might not want to hear, you just have to plan your business accordingly. Not every book can be a great success, or even break even, but there's no point in publishing at all if you're going to approach your potential readers (or publisher) with some passive aggressive twaddle about great ideas or artistic integrity. Explaining to readers why they won't like your book is a sure way to prevent them from trying, and is on the same order of cosmic value as explaining jokes.

Publisher TV vs Book TV

I finally gave up on TV a little over a year ago, which may be part of the reason I started my own publisher TV on YouTube. I don't think I'd watched a half dozen Internet videos in my life before I went cold turkey on "the real thing", whereas now I probably average one a day, to the tune of a couple minutes. Ironically, one of the things I miss about television is the old Book TV shows (Booknotes) with Brian Lamb that I used to watch for a couple hours on the weekends if I wasn't out timber framing. It turns out that over 50% of Book TV episodes are online, but I'll admit I have yet to watch any.

My publisher TV channel has been drawing far more viewers than I expected. The stats as of this morning were:

Videos Uploaded: 13
Video Views: 7,105
Channel Views: 949
Subscribers: 15

It's gotten to the point where there are enough videos to create a custom embedded player that plays only my videos, as opposed to letting YouTube display a selection of possibly related, possibly spam videos when the current video gets to the end. I couldn't figure out how to paste the HTML code into the page without producing the player itself, but if anybody wants to add my self publishing TV channel to their blog or web page (don't ask me why you'd want to do this) drop me a line and I'll e-mail it to you. It also plays all of my videos straight through, so if you're at work on salary and want to stick it to the man, just hit the "play" button:-)



The new player led me to skip through all of my videos for the first time, and it really reminded me of the difference between self publishing and running your own business, versus working working for a trade publisher. For one thing, a trade publisher would have been highly unlikely to want me serving as the face of the corporation, especially when I forget to comb my hair. Instead of choosing a subject and ad-libbing for a few minutes, there would have been scripts, script writers, and editorial boards to determine if the script represented the corporate view. There would have been endless retakes to get it "right", and months of discussion to determine what "right" means. There would have been a media consultant, if not multiple consultants, and a budget. I doubt that a NY trade could have produced 13 videos totaling less than 45 minutes without spending more than I net in a year.

One of the joys of self publishing is the DIY aspect, do-it-yourself. Too many self publishers go into (and out of) the publishing business thinking they have to do business just like a large trade, but on a small scale. That's not just a recipe for losing money, it's a recipe for always running in the rear of the pack. In a competitive world, one of the few benefits accruing to the small is the ability to move rapidly, to venture into new areas without having to fight a corporate culture, to be able to focus on what works rather than what looks good.

So, here's looking at at me, kid.

Interview WIth Mike Piper

1) You publish books about small business structure; how is your own company structured?

For the moment, my publishing business is a sole proprietorship. I generally think that publishing is one of the businesses with a fairly low exposure to lawsuits. Of course, I try to be pretty careful by including a legal disclaimer on everything I write (including one on my site). I do this for two reasons. First and most obviously: I want to protect myself. Second: I really *do* think it's a good idea for business owners (publishers included) to discuss the more complicated tax decisions with a professional. I'm of the opinion that many business owners are scared into forming an LLC (or incorporating). I'm certainly not saying that forming an LLC is a bad idea, per se. I just think that it's important to evaluate the source of anything you read. For instance, if you find yourself on the website of a company that provides LLC creation and incorporation services, don't you think that it's at least possible that the information they provide is slightly biased?

A second reason that my publishing business is a sole proprietorship is that, at this point, the revenue from my publishing business isn't high enough that I would save any money by forming an S-Corp or a C-Corp. (My first book is generating approximately $800 in monthly revenue at the moment, which, while perhaps decent for a first foray into the publishing realm, doesn't exactly equate to a huge sum of money.)

2) How can a corporate structure help a small publisher lower their tax burden?

There are two possible ways that a publisher might save on taxes via incorporating. A publisher might save on taxes by forming an S-Corp as a result of the fact that profits from an S-Corp are not subject to Self-Employment Tax. However, before any profits can be distributed, the publisher would be required to pay any owner/employees a "reasonable salary." This salary would be subject to social security and Medicare taxes (which would end up totaling the same amount as the SE Tax). In short, S-Corps can help business owners save on SE Tax, but not until they're making some pretty serious money.

It's possible for a business owner to save on taxes by forming a C-Corp and using a strategy known as "income splitting." This strategy is only helpful once the business owner is earning enough money that she doesn't plan to use all of the business's profits to help pay for her own personal expenses. The essence of income splitting is to annually pay out a portion of the profits to the owner of the business in the form of salary, and leave the remaining portion in the corporation's bank account. This results in the taxable income being split between the corporation and the individual, thus leaving them each in a lower tax bracket than either would be in if they were taxed on all of the income.

3) Were you led to your publishing topic by market research or did you write your first book in the dark?

I did do a small degree of research before actually beginning the writing process. I wanted to make sure that there was sufficient potential for sales to justify the effort. My research consisted of tracking sales ranks for competing books over a period of about 7-8 weeks, then using the information on your site [For reference, this is how I originally found your blog and book.] to estimate their sales. After looking at each of the websites of the competing publishers/authors, I didn't see any reason why I couldn't do at least as well, provided that I had a way to differentiate my book.

4) What have you learned about online marketing since you started?*

Oh my goodness, where to start. I realized right away that I'd need to learn as much as I could about search engines, and in the process I've become absolutely fascinated by them. At this point, I regularly read two blogs about search marketing: seobook.com and seomoz.org. Once a book is selling steadily on Amazon, Amazon's recommendation systems will keep it going nicely. But you need something to get that first group of people to your book's Amazon page. For me, search engine traffic to my website plays that role. (Thanks for the business model by the way. :-)

5) You've started out as a short discount publisher. Do you envision changing your approach and targeting bookstore shelves at some point in the future?

At this point, I really don't. The entire point of my books is to cover a given topic in as concise a manner as possible. As such, they're rather thin. They look nice from the front, so they can do well on Amazon. But I suspect that—unless they had front-facing placement—they wouldn't be as successful in a bookstore setting.

Mike Piper
www.SimpleSubjects.com/tax