Indie Writers & Social Media - Part 2

David Shaw © 2010

Know Your Audience

In Part 1 I said that social media could be used to support an existing brand, but not to establish a new brand, and that it was not a sales tool. I didn’t mention that social media is a collaboration tool. To me, this is the most important aspect, but I’ll leave that for the last article in this series.

The promise of the web is that it can amplify the presence of an indie, so that we all look as successful and well fed as the big corporations. Sort of. The problem of the web is that if you have a good idea, several million other people thought of it at the exact same instant, and you’ll be buried on page 42 of the search results.

Suppose that we decide to go for volume (low price) instead of niche specialization (high price) or an aggregation model (e.g., be a blog publisher, not a blogger). In Part 1, I posited a book for young American women ages 25 to 34. There are around 13 million on FaceBook. If we could sell to only 1% at $26 we would gross a cool $3.38 million.

Whooo hooo!

The difficulty is that as an indie, we are sales driven not market driven. We have to ‘work our network’ to make individual sales to family, FaceBook friends and Twitter followers. With a brand, you’re market driven: people come to you.

We could partially address this by buying an ad on FaceBook targeting our demographic. FaceBook has a program to do this that allows you to set a monthly advertising budget.

But we still have to convert people to a sale through a sales funnel. To do this, we could make the ad clickable to a shopping basket application. All that is left is processing credit cards, printing and stocking some books, packaging and shipping. In spare time, we could write the next book.

An alternative is to write a best seller and find a branded publisher to deal with the grubby nuisance of making money.

So let’s digress and look at the business model of book publishers and how the long tail creates opportunities for indies.

Be a Best Seller

This is how book publishing works.

Publishers have to print books from dead trees, ship copies to book stores, wait for the stores to sell some of them, and then remainder the rest while paying for designers, editors and other stuff, plus bricks and mortar. Obviously this is high risk, so the general-consumer business model revolves around best sellers more so than intellectual content. Book stores follow the same model. For an extreme example, take a stroll through your local HMV and see how restricted is the music and video selection.

In the printed-book business model a typical consumer book will be priced around $26 with 50% going to the retailer. That leaves $13 for the publisher, who will spend $5.05 on production and $4.05 on overhead and profit. That leaves $3.90 for the author. Obviously you have to have a best seller (high volume) to play in this game.

To yield a modest salary of $70,000 for you, your publisher would have to sell around 18,000 copies of your book (average in my town was an astounding $96,000 last year).

But if you could reduce the retailer from 50% to 30%, and keep the other costs constant, you could net $9.10 per copy. Now you only have to sell 7,700 to earn your annual salary. That starts to sound interesting, eh? We’ll explore a strategy to do that in Part 3.

An eBook is a bit better for the publisher but worse for the author. eBooks are selling around $9.99 to $12.99. Assume the best case with the retailer getting $3.90. That leaves $9.09 for the publisher who spends $1.28 on production and $5.54 on overhead and profit. That leaves $2.27 for you.

In this case we can’t reduce the retailer much, since it is already at 30%, but we can produce the book ourselves. So our net is $2.27 + $1.28 + $5.54 ($9.09). We’ll explore a strategy to do that in Part 4.

Both strategies will use the economics of the long tail.

The Long Tail

A rising tide floats all boats.

Think about that. It doesn’t matter if you have a huge luxury super yacht or a row boat, a rising tide will lift both the same amount.

The long tail is a special mathematical curve that has been facilitated in business by the Internet. In any product there will always be best sellers, lesser sellers and onesies trailing off into the sunset. This is the long curve, if you can picture it.

Before the Internet, book publishers couldn’t afford to print and distribute the lesser sellers and onesies, no matter how valuable the intellectual content. Book stores wouldn’t carry them.

But the cost of listing inventory on the Internet is close to zero. Amazon can list all the books in the world, even those that only sell one copy, at almost no cost. All that is left is fulfillment, which we will explore in the next few articles.

Engagement raises the participation level

However, the long tail has two peculiarities:

• It never goes to zero.
• Activity at the head of the curve (the best sellers), drives more activity in the tail (and vice versa). The overall level of sales rises.

This is why Amazon is a better place to sell your book than your own web site. Amazon is the big box store in the mall with all the foot traffic; your site is the lonely bookstore in the east end of town. People go to the mall to shop, they don’t think of tripping out to the east end. In other words, go to where the people are on the web, don’t force them to come to you.

Amazon also delivers point-of-sale services, shipping and delivery. All that’s left is production.

And Amazon, and now the Apple iBook Store and Google’s new eBook service can work the long tail to raise your indie sales tide.

Whooo hooo!

Next Time

Part 3 print strategy