The Business Side of Writing: An Honest Look at the Cost of Publishing

I began the first draft of this post as “Setting Realistic Expectations” of a publisher, but eleven paragraphs in I realized I’d have to split this up into multiple posts. Suffice it to say, there is a lot that people don’t factor in when they daydream about publishing a book. When a book doesn’t sell, publishers are the usual scapegoat. They’re selfish. They didn’t care. They didn’t do enough marketing. They didn’t get the book back to press fast enough. They didn’t distribute to enough stores. They gave away too many free copies. They worry first about their employees and writers come dead last in their priorities. Now, I may be an indie author, and the stereotype of us is that we don’t like publishers, but there I break from the norm. Usually those above accusations aren’t fair at all. I’ll examine each in turn in later posts, but for this post, I’m going to lay the groundwork for the discussion by enumerating the costs of publishing.

In short, by the time your book’s ready to ship, your publisher is in the red. They have lost money on you, so all of their decisions about how to proceed once the book is for sale are with an eye to getting back into the black. Publishing is a business, and it’s a business where many of the products lose money. Publishers, like any other businesses, have to cut their losses and maximize their profits. Very few authors produce bestsellers, so every publisher has, in their stable, a few names that they favor and give the royal treatment. That isn’t them being awful and judgmental, that’s them keeping their company solvent. Let’s take a look at the money a publisher spends up front for a book:

Author Advance: This is money the publisher pays up front to the author, before the author has generated a penny of revenue. Not all publishers, and especially not all LDS publishers, pay these. In generalyou want to walk away from a no-advance deal, because it shows a lack of faith in your book and demonstrates a lack of willingness by the publisher to invest money in the project – but that is not universally true. One notable exception is small niche markets, such as the LDS market. Just because an LDS house doesn’t pay you an advance doesn’t mean they aren’t investing in your project. Take a look at the other titles they put out and consider the costs I’ll list below. If they consistently pay those costs for all their authors, then I’d say give their offer serious consideration. One personal example is my own experience with Covenant. They didn’t pay me an advance, but they did invest in the book and gave it every chance to sell well. I ended up earning the equivalent of a very healthy advance; the only difference their spending decision made was when I got paid, not how much.

The Publisher’s Payroll: There’s a mantra here you need to memorize. Publishers employ people who work for a living. Thus their payroll will reflect that. Editors, in-house designers, in-house publicists, secretaries, etc. may not make a great living, but they work in a company with office space and furnishings and take home a paycheck with which to feed and house their families. Bear this in mind as we go down the payroll in the next few items.

Editing: The rise of indie publishing means a lot of authors hire their own editors and supervise the publication of their own book, and from this get a distorted view of what an editor costs. Indie publishing is a new industry, so the editors working in it are early career, operating at small or no profit margins in the hopes of someday building up enough of a clientele to make a living. Or there are some that are hobbyists. The amount you pay yourself for your own small business in this field is much less than what you’d expect to earn working for someone else. If you work for someone else, you reasonably expect to make a living, to get raises, and to reach a point where you make a very respectable living as a result of years of hard work.

Thus publishers’ in-house editors are more expensive than freelancers, and they are salaried employees. They get paid whether there are enough books for them to fill their time or not. My editor at Covenant said she was advised to spend no more than fifty hours on a book. People outside the industry gasp at how low that number is. I gasped at how high it is. Even if she didn’t make a lot, fifty hours at even a low wage, plus tax withholdngs and all that, is a pretty decent chunk of change for a book that is destined for a regional, niche market. (We’ll discuss the normal sales numbers for LDS books in a later post – but for now suffice it to say, many would not earn back this cost alone.)

There are also different kinds of editing, ranging from substantive editing of the story to line editing to copyediting, so one book may be worked on by multiple editors. An editor’s time isn’t just devoted to sitting with books and editing them, either. They often correspond with the author about changes and act as a liaison between the author and other departments of the publishing company. An author might never speak to marketing, or know who’s responsible for ordering extra cover flats and swag such as bookmarks because quite often, the editor is the one to pass messages along to these parties. Editors also appear at publishing fairs and read new manuscripts that may not even be accepted for publication yet, and this is all time they need to be paid for.

Cover design: Here again, the market is skewed. With the rise of modern computing technology, Adobe’s shift to offering its software at an affordable subscription rate, and people able to work from home, there are a lot of freelancers who design covers for cheap. I am one of them. Again, as stated above, we are all early career. Many of us are hobbyists. Many of us (myself included) do not hold a degree in graphic design. The designers used by publishers are usually much more skilled, experienced, and work with more expensive source material. A freelancer can make a cover from stock photos obtained from any number of sites online.

That’s the cheap option, and a publisher does not want a bunch of covers that use the same photos and fonts as indie cover designers. Hence they often use art that is exclusively commissioned, a custom photoshoot or an original painting, and those don’t come cheap. Covenant trimmed costs by sometimes using their own employees as cover models, but even still, they had to use a professional photographer – and they only did this when appropriate. You can’t tell which covers they did this for. On top of that cost is the cost of hiring a professional designer at a living wage that reflects their extensive education and skills. If the designer is in-house, again they will be on salary, paid even when an author runs over schedule on signing a contract and thus pushing back the start date of the next cover design project.

The designer will also be in charge of designing swag, ads for the book in print and electronic publications, the company logo and website look and feel, etc. Sometimes the publisher will employ a mix of in-house and freelance designers to get all of this work done. Even when a publisher uses freelance designers, though, they pay a higher, living wage.

Publicity: Again, a publisher uses professional publicists who earn a living wage, not little home based blog tour companies or the other forms of publicist indie publishing has produced. Furthermore, the wage paid to the publicist is only a small fraction of the publicity budget. Most of the publicity budget goes to the printing and shipping of Advance Review Copies (ARCs) of the book, and we’ll talk about the expenses of printing and shipping below. Suffice it to say, they usually eat the entire publicity budget for a book, and that isn’t because publishers are cheap about it. On top of this expense, the publisher may also pay for ad space – and even an indie author should appreciate how expensive that is – catalogue listings, and renting bookstore shelfspace.

What’s that? You didn’t realize publishers rent space in bookstores? Bookstores don’t stock the shelves just any old way? Well, they do, but then publishers come in to pay for upgrades. Next time you walk into a bookstore, I want you to look around. You’ll  sometimes see the shelves towards the front of the store are dominated by one publisher. They pay for that. I.e. look at who’s got the front shelves in a Deseret Book. Look at the end displays on the shelves, little plastic displays that highlight one book. Who chooses which book goes there? Quite often the publisher, by paying for that space. Unrented space is used at the discretion of the bookstore. Look at the front of the store and see if you can find cardboard shelves printed with the book design and holding copies of a bestselling book. Those are called “dumps” and the publisher pays to rent the floorspace they stand on and the cost of design and printing of those custom shelves. The cost of space right up by the registers at a chain bookstore is significant. I managed to get one bookstore in Montana to display my books by the register – that was a bookstore owner being VERY generous. That’s prime real estate. (I traveled up there and hand sold all of the books, and would do so again in a heartbeat.) Look around for posters of books and signing events. Now a lot of authors do signing on their own dime, but for a well established author, the publisher pays the travel and accommodation costs.

Managing editors, secretaries, janitors, etc. I don’t lump managing editors in with janitors to make some sort of statement. I merely listed, there, people who are paid to keep the company running and whose salary can’t feasibly be based on the number of books sold. Companies need directors and support staff, and you can’t ask a secretary to accept a wage based on a percentage of books sold each week. He or she will work for a salary agreed upon when they’re hired and increased as they continue to work at the company.

Office Space: Publishing companies have offices, and here authors are often surprised. They imagine a publisher in a fancy place with wood panelling on the walls and glass doors, like an upmarket law firm, for example. The reality is that publishers are usually as economical as possible. A lot of editors work in cubicles, not offices, and it is possible for one person at one desk to hold multiple titles, i.e. they might be an editor for Simon & Schuster’s Pocket Books and for Atheneum, one of S&S’s many subsidiary lines. Different publishing companies may rent communal space in an office block that shares things like maid service and xerox machines and break rooms. Even when they economize, this doesn’t come cheap. Check into the price of commercial real estate and calculate how many books you’d have to sell to pay for it.

Typesetting and formatting: Now here’s a part of the industry that indie might make a lot cheaper – but cheapER doesn’t mean cheap. I do typesetting and ebook formatting on the same software as the big six publishers and can use templates pre-designed by a publisher’s in-house designer. Even if a small press goes the cheaper route and hires me, it’s not that cheap. It takes me a lot of hours to get a book from manuscript format to launch ready. The typesetting is several hours, and then the correspondence and final edits afterwards take more time than you might think. For an indie author, my services take up a significant portion of their publishing budget, sometimes equivalent to what they paid their editor.

Ebooks are a whole new area that require some specialist knowledge to make up to the standard that a publisher will want. Again, they have to hire a professional to make them.

Printing: Ah, now we’re on to the actual producing of the books! Traditional publishers don’t usually print books on demand. They could and sometimes do these days, but those that know the business well can save a little money by doing print runs, which means the pay a big chunk of change up front for a certain number of books. Each book on its own is significantly cheaper than a POD book, and it has to be, because this kind of printing runs up its own additional expenses, specifically:

Warehousing: Publishers keep a stock of all the books they have in print, and often quite a few that they don’t. They’ll warehouse as cheaply as possible, of course, but it’s still an expense to have books stored in a clean and dry place. The publisher also needs to pay for an inventory system so that they know what they’ve got and where to find it if they need to ship it out.

Shipping: Before I provided indie publishing services, I was a jeweler with my own little home based business. Shipping wasn’t a huge percentage of my budget because jewelry is small and commands a good price. Heft a piece of jewelry in one hand and a book in the other. Books are WAY heavier and nowhere near as expensive to the end buyer. Hence shipping is a major expense for the publisher. Also, consider the number of times the publisher has to ship. They need to pay for shipping from the printer to the warehouse. Then the cost from the warehouse to all the different bookstores. Then they may also run a direct order business through their website, and need to pay for the shipping to individual buyers. Last of all, someone has to pay for the cost of shipping unsold books back from the bookstores. This amount might show up on the bookstores’ balance sheets, but the publisher will need to absorb this cost to stay competitive, by lowering the cost of their books accordingly. Add all these costs to the list of other expenses we’ve accrued already.

Distributers/Wholesalers: These are the services that distribute print books and get the publisher’s stock into bookstores. They get their cut too.

Website Maintenance: One of the commenters below disclosed that at her publisher, a third of the staff worked on the website. Since this is the face the publisher shows the world, it makes sense that a publisher would invest serious money in this. And again, all of these people need to make a living.

Library Maintenance: Or in other words, making sure all the books are up to date and in the warehouses or bookstores they should be in. Whenever a writer writes a new book, all future printings of their other books need the new one added to the list of “Other Titles.” Ebooks need to be updated with new sales links. This is an ongoing maintenance expense which, again, is borne by the publisher.

ISBNs, copyright registration, legal fees for the drafting of contracts and advice on infringements, etc., etc., etc. There are a ton more little expenses that: 1) may not be that little and 2) are great in number. Add them to the list.

Okay, so that’s as comprehensive of a list that I can pull together right this moment; take a good look at it. Over the next few posts we’ll discuss how to be fair in your expectations of your publisher, and we’ll refer to this list again and again. The bottom line, publishers don’t have infinite resources. They have to pick and choose what they can pay for, and if they don’t pick you, it isn’t because they’re evil or hate you or even that they don’t care. They may simply not be able to do it, no matter how badly they want to.

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8 Responses to The Business Side of Writing: An Honest Look at the Cost of Publishing

  1. Jonathan Langford says:

    Great post. Most of this is stuff I already knew, but it’s easy to forget when you’re trying to drum up a list of reasonable expenses.

    • Emily Tippetts says:

      Thanks, Jonathan! Yeah, all of this is pretty easy to figure out, even if you just sit down and think about it, but a lot of people don’t, so it seemed like a good place to start.

  2. Marny says:

    What about costs for distributors (or wholesalers) and for Web editors and programers? (People involved with our Website are about a third of our employees at the publisher where I work.)

    • Emily Tippetts says:

      The web maintenance is new information that I sincerely appreciate. Not all small presses use distributors – though perhaps in the LDS market they still do. Some of the major houses in LDS publishing own much of their distro network – so essentially those costs will vary. I’ll add those, and those who work on the website, to the post along with any other items people point out in the comments here. I was planning to do a re-edit next Wed to include any such info.

      Another group I left off, that is pretty obvious, are the accountants and those involved with getting royalties sent out to the authors, getting tax documents prepared, etc. So yes, not an exhaustive list, but with the help of sharp eyed commenters, I hope to get it more complete!

  3. Joe Vasicek says:

    Wow, I’m a self/indie/whatever published writer and my costs look nothing like this. To wit:

    Substantive editing: use alpha readers.
    Line/copy editing: barter for services, hire freelancers (usually at $.005 per word), get a college student to do it (in order to build her portfolio).
    Proofreading: barter for services, exchange with other writers, find a college student, or do it myself.
    Cover art: Do it myself, hire a freelance artist online. The most I’ve ever paid for original art is $300.
    Publicity: I’ve never spent anything on publicity, except $5 to enter a group promo that netted me thousands of downloads and probably over a hundred sales. Instead, I make a few of my books permanently free and let my books sell themselves. Unlike bookstore co-op, Amazon’s algorithms favor no one and give highest priority to the books that actually sell. And my books are selling.
    Managers/secretaries/janitors/CEOs and other pesky office staff: Nothing. Does not apply. I’m a one-man show, run entirely off my netbook and PC.
    Office space Nothing. I typically write in the library, which is free.
    Typesetting and Formatting: I do this entirely myself, using free and/or open source software. It only takes about an hour to format an ebook (half an hour if I’m in a rush), and typesetting takes maybe a week or two.
    Printing/warehousing/shipping: Does not apply, since all of my books are either digital or print-on-demand.
    ISBNs: Whenever I’ve come across a part of the process where I need an ISBN to continue, my retailer/distributor has provided one for free.
    Other legal fees: Haven’t yet grown to a point where any of that is an issue.

    So yeah, as a self-published writer who’s doing it all myself, I can circumvent almost all of these costs, produce a product that is on par with just about any traditionally published book, and have access to all of the same distribution channels as a large publisher, without having to give up control over any of the process. Oh, and I get to keep a lot more of the money, too.

    I assume you’re going to talk about that in later posts, though. The question in my mind is what value does going through a traditional publishing house really give? What can a publishing house offer that I cannot do myself?

    • Emily Tippetts says:

      Yeah, I will discuss that in future posts. Your indie economics doesn’t contradict what I outline above. Yes, you pay less. To be honest, you also get what you pay for. If your books were indistinguishable from trad published ones, your point would be absolutely valid. Only a few indies manage to look trad and keep the lower costs, though. Most are easy to spot even at thumbnail size. Every day I peruse the BookBub listings and try to guess based on cover alone if a book is indie or trad. Every now and then I get tripped up by a trad cover so bad I think it’s indie. I rarely mistake an indie cover for trad. Even the good ones are usually spottable – they’re just up against designers with more experience and better resources.

      • Joe Vasicek says:

        I don’t think most readers care who publishes a book, though, as long as the story is good and the book-as-product isn’t terrible. In fact, I’ve come across a lot of readers who prefer self-published books. So long as I can make a living, that’s what I care about–and with self-publishing, I practically already am.

        • Emily Tippetts says:

          They don’t care who publishes it, no. Publishers did a very poor job of branding themselves, which opened the door to the indie movement.

          But your question was what could trad publishing do that you couldn’t do yourself. There are several things it can do for you that you can’t do yourself, but that’s irrelevant if none of those things matter to you. However, FWIW they could, 1) get you better covers, 2) get you more professional formatting – especially for your paperbacks, 3) increase your print sales substantially, 4) have access to advertising and review venues that you don’t, and 5) sell more books, to name a few things.

          But I think what you mean to say is that trad publishing doesn’t interest you and you feel you don’t need it. I’m an indie author too, and at this point I don’t know that I’d ever go trad with my romance novels. Nevertheless, it’s foolish to make comments like “What could they do for me?” with the assumption that the answer is “nothing.” Their role is changing but they aren’t out of the game by a long shot. According to Amazon’s rep at the London Book Fair, indie books hold an average of 26 slots on the Kindle Top 100. That’s up astronomically from four years ago when self publishing was barely known. And yet, trad publishers control the other 74. Even if traditional publishing is in decline, they’ve got a long way to go before they’re obsolete, and even if they drop off the radar in ebooks, they dominate print and print distribution.

          It’s great that you’ve found a publishing situation that works for you. It doesn’t work for everyone. No publishing option does, which is why I’m outlining all the options in these posts.

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