Thursday, September 3, 2015

Distribute Widely

This is the fifth post in an ongoing series about 5 Secrets Every Indie Author Should Know.  The first four parts of this series are:
 

Distribute Widely

Excerpted from Chapters 15 and 16 in DIY Publishing by Maggie Lynch

Print Book Distribution
This chapter discusses the two primary distributors of the print-on-demand (POD) books that most self-published authors and small presses use. The POD printing technology is primarily owned and operated by two large companies: Ingram, through its Lightning Source subsidiary; and Amazon, through its CreateSpace subsidiary. I will discuss the pros and cons of working with each company, and illustrate how to add accounts and upload your work at CreateSpace.
In addition to these two large distributors, there are hundreds of other “author services” companies which will format your print book, create a cover, and arrange for POD printing and distribution. There are significant fees associated with these services, and some will additionally take a percentage of each sale. Most of these companies use either Lightning Source or CreateSpace in order to get any type of worldwide distribution.
I highly recommend that you upload directly to Lightning Source (now Ingram Spark for most Indies) or CreateSpace yourself. You will receive the maximum royalty and control over how your titles are loaded and what data is associated with them.
Let’s begin by comparing CreateSpace and Lightning Source. Both are reputable companies that produce library-quality books using a print-on-demand model (i.e., books are printed and shipped to fulfill customer orders). While some services overlap, each company has its strengths and weaknesses. Your preference depends largely on your needs and objectives. In my opinion, the end product is equal between these two sources. In fact, CreateSpace often uses Lighting Source’s POD printers when volume overwhelms its own network. However, there are fans on both sides that will shout from the rooftops that their POD printer is better. Let’s look at the primary differences between the two:
CreateSpace
·      Nice array of trim sizes
·      Laminate finish on all covers
·      Paperback only
·      Setup fee is free.
·      Proof copy is your cost for the book. Typical author cost for a 350 page 6 x 9 inch book is approximately $5.00
·      You can make changes and reupload the book any time for free.
·      One time fee for distribution through Ingram and Baker and Taylor is $25.00.

Ingram Spark
·      Wider range of trim sizes
·      Choice of laminate or matte finish on cover
·      Choice of paperback or hard cover
·      Setup fee is $49.00
·      Proof copy cost is the cost of printing the book
·      Change fees range from $10 to $49 depending on the change
·      Author price for a 360 page 6 x 9 inch book is approximately $5.15
·      Fee for distribution through Ingram is $12 per book per year.

The above are the basic setup and distribution costs.  In addition there are other differences that may impact an author’s decision, particularly if you wish to work with a large number of bookstores.
CreateSpace sets the wholesale discount at 20% at the CreateSpace store, 40% at Amazon, and 60% in expanded distribution. Most small bookstores refuse to order print books from Amazon as the actual discount to them is only 25%. Later in this chapter I discuss the math behind expanded distribution and what a self-published author can do work more effectively with bookstores.
Ingram Spark sets the wholesale discount at 55%. Bookstores regularly purchase books from Ingram and have their full catalogs in the store. The normal bookstore is discount is 40% which is what they expect.
CreateSpace does not accept returns. However, Amazon does. Ingram allows authors to determine if they wish to accept returns.  Returns mean that if the book does not sell within a particular period of time the bookseller is able to return it to the publisher for a full refund, minus shipping. If you accept returns and are selling regularly this isn’t a problem because the returns are deducted from your total sales. However, if your book is not selling well and you accept returns you can find yourself in the position of having to purchase those books yourself because your account will be in the negative. I personally do not accept returns.
Time to distribution is dependent on where your book is being distributed. CreateSpace electronically transfers your finalized book information immediately to all Amazon stores you’ve elected. Making your book available in the expanded distribution network takes approximately a month. It appears at Barnes & Noble within a week, but other bookstores take up to a month. That’s because the files are sent to Ingram and Baker & Taylor for loading and then to Lightning Source for POD printing. 
Ingram distribution to all bookstores supported by Ingram appears in the catalog with 24 hours. It appears in Baker & Taylor catalogs within two weeks, and at Amazon usually within one week.
Customer service is also markedly different between the two companies. Ingram is set up to deal with medium to large professional publishing companies. There is an expectation on their part that you’ll understand how to navigate the site, what all the selection options and terms mean, and how to upload a book  without mistakes. As a result, Ingram customer support is slower to respond to individual author difficulties with the system. They respond only by email. There is no phone support. If you are set up as a publisher and have multiple titles, then you can opt to go directly to Ingram Lightning Source (instead of Ingram Spark). You will tlhen have a publisher representative assigned to you who becomes your liaison with the company. Note: With the advent of Ingram Spark which was developed for indie authors, Ingram is slowly getting better every day with their support of individual authors.
CreateSpace, on the other hand, was built with the self-publishing author in mind. It has instant phone and email support 24 hours a day. Is CreateSpace sometimes frustrating to deal with? Sure. Not all reps are created equal. Customer support groups have a diversity of talent and people skills among the staff.
Given my analysis of both companies, I’ve chosen to use CreateSpace for uploading direct to all Amazon companies. And use Ingram Spark for expanded distribution. This seems to be the best of both worlds. I purchase personal copies at CreateSpace because it is less expensive for me. (Note: This would probably not be true for those who live outside of the U.S.). If at a later date I am selling significantly larger numbers of books, then I may switch to Lightning Source who can also do offset printing in quantity. To sufficiently decrease the unit cost of books, I’ve calculated it requires a minimum order of 1,500 books to do offset printing.
Even with all the above steps to make sure bookstores can get the maximum discount (40%) and use their usual catalog services (Ingram), the majority of bookstores will not order my books except when specifically asked by a customer.  However, I know many New York traditionally published authors who also cannot get their work on local bookstore shelves. The reality is that there are far too many books for any bookstore to stock them all. With shipping within 2-3 days for any book, it doesn’t make sense for bookstores to carry everything.
This is where forming relationships with bookstores makes a difference. Many stores like to carry titles by local authors, or authors who have a tie to the area.  Bookstores where I live typically agree to carry two to five of my books at a 40 % discount rate.
For authors who are new in the market, or the sales are unknown, some stores will take self-published books on consignment. This means they agree to carry the books for a specified period of time and at a specified discount (e.g., 40%). If the books sell within that period of time you are paid for those sales. If they do not, you must take them back and the stores is unlikely to provide shelf space for that title in the future.
I began selling my indie published books on consignment—at first through in-person signings and store events, then through cold calls. Once a title proved to sell regularly every month, the bookstore will take me off consignment and purchase the books directly from me or Ingram. This resolves the issue bookstores have of ordering from an Amazon affiliated company, or for the limited discount offered. For local stores I simply replenish their stock as needed, driving to deliver the books in person, signing the stock, and reconnecting with the owners. For stores that are not local and pay me in advance, I drop ship the books from CreateSpace to their store.  When I’m in the area I always stop by to sign stock. For bookstores out of the country or in areas where I am unlikely to visit, they order direct from Ingram.
To summarize, CreateSpace and Lightning Source/Ingram are the two largest POD printers and distributors. There are other smaller, independent companies that will handle print formatting and distribution for you, as well as other author services for a fee. Some of these companies are excellent partners. Many of them are not.
Should you decide to use an author services company instead of doing it yourself, be sure to investigate the company carefully. Unfortunately, there are many companies that take advantage of unwary authors and charge outrageous fees for little benefit and no guarantee of getting your books anywhere.


As I said earlier, 70% of my print sales come from my relationships with bookstores. Because of that I definitely believe it is worthwhile to undertake direct print distribution. This means I purchase books from CreateSpace at my cost and then deliver them to booksellers based on their orders. I do this in two ways. For local bookstores, I keep an inventory of my books at my house. I then deliver them in batches of four or five as their stock depletes and they order more. For bookstores that are not local, I again purchase the books from CreateSpace at my cost. Then I drop ship them to the bookseller. Depending on volume, the bookseller may pay for shipping.
This scenario requires two elements: a bookseller discount of at least 40%; and a relationship built on proof that your books can sell and that you can be counted on to deliver on time.  The discount is the minimum I’ve found that is acceptable to booksellers and allows them to make a profit. The relationships are built one store at a time. Once you have five or six stores working with you, it expands more quickly. Booksellers belong to organizations. They talk among themselves about authors they like, and authors they don’t. If you’ve been a part of helping a bookstore succeed it will get passed to others and then those stores will contact you.
Working one-on-one with booksellers also means we can plan special events together. I can partner with them on sales and promotion. The more I do to help them, the more they do to help me. It is a win-win scenario.
There is a downside to this arrangement. The more stores you supply, the  more time consuming order fulfillment, event planning, and promotion becomes. Also, this is not something you can do when you feel like it. Nor is it something you can put off because you are on deadline to get the next book out and will be hiding in your writing cave for a month. Booksellers expect to receive a book within three days of ordering. This means you need to be on top of orders and fulfillment every day, not once a week or once a month.
By this time, it would be natural to wonder why bother with print books at all. For me there are several reasons.
       1.         Some readers prefer print and being able to satisfy them is important to me.
       2.         Many reviewers, bloggers, librarians, and bookstores take you more seriously if you have a print edition available.
       3.         When the print book is listed on Amazon, the cost of the ebook next to it looks like a great bargain. My $4.95 ebook is a good deal next to the $14.00 print book.
       4.         If you enjoy book signings, you need a book to sign.
       5.         If a book takes off, your print need will go up. If you reach bestseller status, both booksellers and librarians will be purchasing books in high enough numbers to get free shipping and realize some profit—even on POD. 

Finally, I admit I love having a print book to hold in my hand. Though I read ebooks almost exclusively, I do pay for print books on occasion. What is more special than your own book?

Pricing. It is important to first erase the comparison of trade paperback to mass market. They are not the same product nor are the printing costs the same. Mass market is printed in lots beginning at about 10,000 units. That is how the price is kept low. Trade Paperback for most independent writers is printed on demand, one at a time. 
Instead compare your price to book to New York trade paperback books. The list price for most trade paperbacks falls between $13.95 and $17.95. Do not look at the sale price on Amazon. Compare the list prices. Should you charge the same price as a bestseller? Probably not; you don’t have the following. Aim for a couple dollars under trade paperback book pricing in your genre. Charge enough to make at least $2.00 per book.
Pricing low is making a statement about how you value your work. You are saying that your book is not as good as those from New York. If you believe that, then your book is not ready to be sold. If you know your book is ready and it is comparable to the average traditionally published book, then don’t price low out of fear. Price based on value—a comparable value to other trade paperback books in your genre. 
Finally, determine what your expectations are for your print book. If all you want is something to show your family and friends, and perhaps take to a bookstore signing. Then don’t do expanded distribution at all.  This means your print book will only be available through Amazon and their companies. However, you can still purchase your own books through CreateSpace and take them to book signings on a consignment basis. For many authors this is enough and you can price lower because you are not doing expanded distribution.
Personally, I like options for worldwide distribution. I don’t like limiting my print distribution to one vendor. I also adore bookstores and want to support them as much as possible. But those are my choices. Do what is right for you, your goals and values, and your economic philosophy.

Ebook Distribution

Unlike print books where the majority of POD printing is handled by only two vendors, ebooks have a plethora of distribution options. In fact, it seems that a new vendor pops up weekly.
This chapter discusses the variety of distribution channels available to the self-published author. I will illustrate how to add accounts and upload your work at the following large distributors, and discuss the options each offers.
·      Amazon
·      Barnes & Noble
·      Kobo
·      Apple

In addition to these large distributors, there are hundreds of other possibilities. Some are genre specific such as ARe (All Romance ebooks), while others are simply e-commerce portals that purport to offer better discoverability than the large distribution options. I will also cover options that are not available for direct upload but can be accessed through aggregators—a type of middleman distributor that feeds products to larger companies (e.g., Amazon, Apple, Kobo, Sony, etc.).
In my opinion, the only reason to use a middleman for distribution is if that entity has access to markets you do not. For example, Sony only allows larger publishers to upload direct. In order to upload directly to Sony you must have a minimum of 110 titles. It is unlikely that most self-publishing authors will meet that criterion. In order to reach Sony’s market, you would need to use a middleman distributor.
Other distributors also have minimums or other access restrictions. For example, Overdrive (the leading library distributor for lending ebooks) requires a minimum of five titles before you can upload direct. Apple requires that all titles be uploaded from an Apple computer. If you don’t have one, you either have to find a friend who will do it for you or go through a middleman or other service to have access.
Some authors believe the percentage a middleman takes (ranging from 5-25% depending on the company) is worth it. These authors don’t want to take the time to upload to each distributor or to monitor sales at each distributor. They prefer to have a person or company handle it centrally and report combined sales. Personally, I prefer the control I have over distribution channels. Things tend to be processed more quickly from direct loads than from a middleman company, and I can track where I’ve made changes and where I haven’t. I don’t like giving up another percentage to yet another company.
You can determine what works best for you and what you are willing to pay for convenience. If you do decide to use a middleman, make sure you know the contract terms, understand the payment schedules, and have a complete detailing of all fees and percentages the company takes from your sales.

Each vendor offers different options for distributing your ebook. It is important to understand these differences, their markets, and to make informed choices. Only one vendor, Amazon, provides certain options that require the author to only use Amazon for distribution.
Finding good statistics on the market share for each of these distribution vendors is difficult. That is, in part, because it changes all the time. The appearance of a new company in the market also changes the dynamics of sales.  Some newer players, like Kobo,  are adding many new distribution points every year, while others are falling faster than ever. This year Barnes and Noble went from three countries back to two. However, that doesn’t mean you should write off any companies quite yet. New leadership, new vision, and new direction can turn them around.
Also, ebook market share statistics are reported in different ways. For example, some surveys rate ebook market share by the number of devices sold (e.g., ereaders, tablets, phones) by a vendor. In this scenario, Apple wins every time because it has sold the largest number of devices worldwide. But that doesn’t necessarily mean Apple is selling the greatest number of ebooks. Other surveys rate market share by the number of titles downloaded from a company’s e-store. That makes sense, except that many companies do not offer this information in formal reporting. For example, though Amazon provides annual public reporting of its profits and losses, it does not break out ebooks as a line item to be evaluated. In fact, the sales of ebooks is a minor part of their entire product sales portfolio. This means that those statistics are gathered from a limited number of resources (e.g., Commercial Publishers and Bowker), and that self-published titles that do not use an ISBN are not counted anywhere. Other statistics are gathered from aggregators like Smashwords. This provides insight into a certain number of self-published titles, but the revenue numbers are skewed to those formats distributed via Smashwords. For example, most authors do not distribute to Amazon via Smashwords. Others only use Smashwords to distribute to Apple.
Ebook companies keep their numbers very close and report them only in press releases that interpret the data in their favor.  An organization like Bowker can only report on the ebooks which have an ISBN. The Wall Street Journal reports on apps used to download books. Publisher’s Weekly can only report on those ebooks that are reported to data resources primarily in commercial publishing. Amazon does not report, which means that numbers related to Amazon may be skewed based on “best guesses.” 

Certain upload requirements are common across all vendors. They all need metadata that describes the book. They all need regional pricing. You, as the author, must determine in which of the global markets your book should be sold. Each vendor offers different payments for books based on different rules. This may impact your pricing decisions. Finally, the vendors require you to upload your ebook file in a format that each of their different ereading devices can recognize and render effectively. Different vendors have specific restrictions on how well your file must be formatted to be accepted.

Aggregators

An aggregator is a company who acts as a middle-man to distribute your books to numerous vendors. Smashwords and Draft 2 Digital are the two most common aggregators used by indie authors because there is no fee to upload, and the fees they take for distribution are not too large—Smashwords (10%), Draft 2 Digital (15%).
There are also many others like Book Baby and Vearsa that have even wider reach. But these come at a higher cost either in per book set up or in a monthly fee arrangement. The trade off with companies like Book Baby and Vearsa is that you get wider reach, often to thousands of vendors around the world instead of to a selected five or ten.
All of these aggregator companies are happy to distribute to the big 5 vendors mentioned above. Each also regularly adds additional vendors as possibilities for distribution. These might include subscription services like ScribD and Oyster, or library services like Overdrive and 3M Cloud. They also tend to get contracts into foreign country-specific vendors like Flipkart in India or Weltbuilt in Germany.
The ease of using an aggregator is appealing. It allows you to load one or two files to them and then they put those files everywhere else for you. They also report all sales in one place for you. Of course, there is a cost for this and you need to determine if that cost is worth it.
The other downside to using an aggregator for the big five vendors, is that it also gives you little access to sales and promotional opportunities offered by each company. For example, Kobo has several opportunities for being featured as a debut author, a series author, or for a book you have discounted or made free. However, those opportunities are only available to you if you are loading direct. They are not available if you are using an aggregator who is distributing to Kobo for you. The same is true of Apple. 
In other instances, there are markets that you can only get with an Aggregator. That’s because those markets are set up primarily for large publishing companies to access with large datasets of books and information. Your decisions on when to engage an aggregator and which one need to be considered carefully based on your career plan, your book sales, and your income.

Resources

There are several classes coming up with All Writer Workshops that deal specifically with Distribution.  You may want to look at these and decide which ones will be most helpful to you.

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