KaChing: How to Run an Online Business that Pays and Pays (18 page)
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Authors: Joel Comm,Mark Victor Hansen
BOOK: KaChing: How to Run an Online Business that Pays and Pays
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As we’ve seen, the length of an e-book can vary. Anything longer than a blog post can be turned into a PDF document and made available for download without users wondering why they can’t just read it in their browsers. Once you get to about 3,000 words, you’re either going to have to break up what you want to say into different pages—which gives you more opportunity to serve ads—or put it in a PDF e-book and let people download and read it when they want. You can find plenty of very short documents of even 10 to 12 pages on the Internet calling themselves e-books. Those kinds of very short documents are best used for viral marketing. You can offer them for free to people who sign up for your RSS subscriptions, or you can just distribute them as additional content that shows the value of your information. As people share them and talk about them on their own web sites, they’ll send you some useful extra traffic and help to brand you as an expert.
When you’re looking to sell an e-book, you’ll really want at least 50 pages. That’s still much shorter than any book you’ll find in a bookstore, but perceived value does still have an effect on sales. Fewer than 50 pages and customers will begin to wonder whether the e-book will contain enough information to have a meaningful effect on their lives. That’s the impression you’re always looking to create.
The same is true of maximum length. For print books, the more pages the book contains, the higher its apparent value. That holds true online as well, but be aware that when an e-book gets very long—more than 200 pages, say—readers stop reading and start dipping. They look at the table of contents for the particular information they want, turn to that section and pluck it out. There’s nothing wrong with that as long as they’re still buying the book, but if you are writing something very long, try to break up the sections so that they can stand independently. It’s likely that many of the people reading Chapter 7 of your e-book won’t have read Chapter 5.
When it comes to length, you have all the flexibility you could want. When it comes to pricing, you have more flexibility than you could want. If customers are prepared to pay $77 for a 60-page e-book about AdSense what would they pay for your e-book?
It would be great if you could price the book in the same way as any investment. If you knew that people implementing your strategies were going to add $12,000 to their income at the end of 12 months, then you could charge $1,000 and tell people that they’ll get their money back within a month.
But it doesn’t work that way.
While you can estimate what someone might make by implementing your strategies, you can’t predict their future earnings. Everyone will act differently, grow at different speeds, and see dif ferent levels of success. Try to claim a typical rate of return, and it’s just possible that you could even have the Federal Trade Commission on your back. More realistically, buyers won’t believe you. They understand that the amount they can earn after buying your e-book will depend on what they do with it. Charging a high price on the basis of predicted earnings could result in fewer sales.
So, be modest ... and look at the competition.
Even though your product should offer unique strategies, plans, and ideas, it’s unlikely that you won’t have any competition at all. You should read those other e-books that are available in your field to see what they contain, understand how the authors arranged their ideas, and stay up-to-date. Pay attention to the pricing of those books. If you charge twice what your competition is demanding for a book that also promises to help people make money as fashion designers, create a top-selling Etsy store, or save thousands by building their own kitchen, then you’ll need to show that your e-book contains something that delivers twice as much value.
Otherwise, your targeted readers will be able to buy the same benefits from your competitor at half the price.
While your competition will limit your ability to set prices, at least a little, they do make coming up with a figure a lot easier. (And don’t forget that you’ll be giving away a large chunk of that income to your affiliate sellers.)
So when you’re looking to sell your knowledge, you’ll want the e-book to be at least 50 pages. You’ll want it to contain solid, practical information that delivers real benefits. And you’ll want it to be priced in line with the competition rather than relying entirely on the perceived benefits the book will bring.
That should be enough to give you a simple information product that can deliver a steady chorus of KaChings.
When you can create an e-book that’s as short as 60 pages, charge as much as $77 for it, sell thousands of copies, and do it all on your own terms, according to your own schedule, and without having to ask anyone’s permission first, why would anyone want to create a print book?
That was the question that went through my mind when David Hancock, a former mortgage banker and the chief executive of New York publishing company Morgan James, suggested turning my e-book into a print book that would be published and distributed in traditional hard- and soft-cover versions through his firm.
We had met at a conference, and although we’d hit it off right away and I was flattered by his offer, my initial reaction was skeptical. The e-book was selling well. In fact, it was selling better than I could have hoped. Producing a print book would mean reorganizing the content, and worse, it would also cap the price. It’s unusual for a book to sell for more than $25 or so, and authors are usually last in line to get their share. By the time the retailer, publisher, and printer all have their take, traditional authors are usually left with a tiny fraction of the cover price.
Stephen King and Dan Brown might be able to fly around the world on their private jets, but for many of the names you find in bookstores, writing is a second job. According to Morris Rosenthal, author of
Print-on Demand Book Publishing: A New Approach to Printing and Marketing Books for Publishers and Self Publishing
Authors, a book with a sales rank on Amazon of 5,000 will sell around 90 copies a week on the site. The company’s sales of books, music, and DVDs totaled $5.35 billion in 2008, while Barnes & Noble and Borders together sold $8.35 billion worth of media. If every sale on Amazon represents another 2.5 sales in bookstore chains, then a book that makes it into top 5,000 of the world’s biggest bookseller will be moving a total of around 900 copies a month.
Print-on Demand Book Publishing: A New Approach to Printing and Marketing Books for Publishers and Self Publishing
Authors, a book with a sales rank on Amazon of 5,000 will sell around 90 copies a week on the site. The company’s sales of books, music, and DVDs totaled $5.35 billion in 2008, while Barnes & Noble and Borders together sold $8.35 billion worth of media. If every sale on Amazon represents another 2.5 sales in bookstore chains, then a book that makes it into top 5,000 of the world’s biggest bookseller will be moving a total of around 900 copies a month.
If the book sells for $24.95 and the author’s royalty is 15 percent, he or she would be taking home no more than $1,350 per month—a nice additional income but not something to give up the day job for. And your book has to be among the top 5,000 of Amazon’s 4 million to earn it.
Of course, all of those are back-of-the-envelope calculations. Publishing is terribly complicated, and the figures can range all over the place, usually downward, but my experience is that they provide a pretty good guideline. When you’ve just seen an e-book generate $10,000 in two days, traditional publishing really doesn’t look very tempting.
But print books can deliver two things that e-books can’t. The first is distribution. Amazon might be the biggest bookseller in the world, and it is possible now to offer e-books and even your own Kindle books directly from the site, but it’s still only one outlet. According to research company IbisWorld, the United States had around 34,000 bookstores as of 2008. Although the number is declining, that’s still a massive market that an e-book can’t reach.
The other benefit of a printed book is even more important. Being an established author gives you prestige.
Becoming a traditional author is difficult. You have to create a detailed proposal that explains what your book is about, describe the competition, and say how your book will be different. You have to send it to publishers and agents and hope that one of them is interested enough to bite. As the publisher of a popular web site, you’ll have an advantage. Your site will give you a platform, a built-in audience that’s already keen to learn about your book. But you’ll still have to be prepared to absorb lots of rejection.
For publishers, every new book is like investing in a new business venture. They want to be as certain as they can be that the money they spend on the advance, on printing, and on marketing is going to come back. The safest response is always no.
This means that those authors who have made it through the process, whose names appear on the covers of books, and whose pictures can be found on shelves in stores have an unbeatable level of prestige. If a publishing company considers them expert enough to back with its money, then potential readers should trust them, too. Being able to say that you’re a published
author,
in the traditional sense of the word, immediately puts you head and shoulders above your competitors. It delivers extra traffic to web sites, increases the sales of affiliate products you want to promote, leads other entrepreneurs to want to partner with you, and can even give you a path toward a career as a professional speaker.
author,
in the traditional sense of the word, immediately puts you head and shoulders above your competitors. It delivers extra traffic to web sites, increases the sales of affiliate products you want to promote, leads other entrepreneurs to want to partner with you, and can even give you a path toward a career as a professional speaker.
So even though my AdSense book was doing very well without ever seeing the bottom of a printer tray, I wasn’t completely against the idea of creating a traditional book.
What really got me interested was Morgan James’s business model. Morgan James (
www.MorganJamesPublishing.com
) produces traditional books, but it doesn’t act in a traditional way. Instead, it produces “entrepreneurial books,” which bridge the gap between
traditional publishers
who produce books by taking all of the risk and in return giving authors a tiny share of the sales, and
vanity publishers
(aka self-publishers) who give authors all of the profits but also a giant financial risk (and none of the prestige).
www.MorganJamesPublishing.com
) produces traditional books, but it doesn’t act in a traditional way. Instead, it produces “entrepreneurial books,” which bridge the gap between
traditional publishers
who produce books by taking all of the risk and in return giving authors a tiny share of the sales, and
vanity publishers
(aka self-publishers) who give authors all of the profits but also a giant financial risk (and none of the prestige).
As with self-publishing, you will have to reach into your pocket to publish with Morgan James. You’ll have to pay for the design work, the editing, and the printing (although that also means you maintain control, whereas in traditional publishing, you don’t even get the last word on the book title). That might cost you around $4,000, give or take. But unlike the self-publishing companies, Morgan James hasn’t yet earned a penny. The company starts to make money only when your book starts to sell, so it won’t give you a pile of books and leave you to it. Morgan James helps you to market the book as well. Most important, it does that by using the Ingram Book Group, a wholesaler and distributor—and the main channel for any book that wants to reach mainstream bookstores (
Figure 4.2
).
Figure 4.2
).
Figure 4.2
Morgan James will publish your book, put it in stores, and help you with the marketing.
Morgan James will publish your book, put it in stores, and help you with the marketing.
Produce your book with Morgan James, and you will be able to see it in your local bookstore.
There are other benefits, too. Because you’ve taken on more of the risk, you’ll not only have more control, you’ll also have higher rewards: Royalties at Morgan James are as high as 20 percent of the sales price, much higher than anything you can find in traditional publishing. And you get to keep the rights to your book.
That’s very important. It means that you can put the same material on your web site, in e-books, and even turn it into a course if you want without receiving legal letters from a publishing company highlighting the clauses in the giant contract you signed that prohibit you from earning from your knowledge in any “unauthorized” way.
Morgan James, however, isn’t open to everyone. The company receives about 4,500 manuscripts each year... and produces about 163. In terms of rejection, it’s not too different from a traditional publishing company. But if you have a good idea, and if you’re serious about creating and promoting the book, then it can deliver some huge benefits for entrepreneurial authors-business-minded people who want to help other business-minded people succeed.
The print book that I agreed to create with David Hancock went on to become a
New York Times
best-seller, giving me the kind of prestige and profile that I could never have earned any other way.
New York Times
best-seller, giving me the kind of prestige and profile that I could never have earned any other way.
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