How Does Your Publisher Make Money?

Posted on Jul 24th, 2012 | 85 comments home title

If you read the publishing blogs and follow industry Twitter feeds, you’ve no doubt gathered that there’s a firestorm of controversy over Pearson, the parent company of Penguin Books, purchasing a company called Author Solutions (ASI), a well-established self-publishing company. You can read numerous diverse opinions on this acquisition and plenty of astute commentary (links at the end of the post) but here, I want to focus on one tiny aspect.

What is the most important thing for an author to understand about a traditional publisher entering into the self-publishing fray?

As it happens, I addressed this very issue over 2½ years ago on the blog (December, 2009). Much of what follows is what I said back then.

Self publishing represents a completely different business model from that of traditional publishing.

The business model of publishers has always been to make money from READERS. Readers pay their twenty bucks for a tangible product – a book. And an intangible – a reading experience. They’ll either like a book or they won’t. Either way, they’re only out their $20.

But self-publishing is different. This is a business whose bottom line is to make money from WRITERS. And that opens up a whole can of worms, because it’s no longer about $20. And it’s no longer about simply purchasing a product, knowing you might like it or you might not. Instead it’s about a writer’s lifetime of hopes and dreams. It’s about expectations that are often unrealistic. And it’s about laying down a chunk of money that’s anywhere from hundreds to thousands of dollars, with little chance of recouping it.

I think the switch from making money from readers to making money from writers is huge. It sells hopes and dreams more than it does a tangible product. It opens up the possibility of exploitation, even if the publisher’s intent is not to exploit but simply to increase bottom line and keep their doors open while giving both readers and writers want they want.

Here is the point I think authors should digest:

→ Traditional publishers make money by selling your book to consumers.

→ Self-publishing companies make money when YOU write them a check.

To me, that’s a pretty important distinction to understand.

Is your publisher motivated to sell copies of your book? Only if that’s how they make money.

Authors should be aware that when they decide to go with a self-publishing company (something I am NOT disparaging), they’re going in a whole new direction. They’re working within an entirely different business model, and THEY are the source of revenue for their “publisher.”

Does this distinction in business models concern you? Does it matter how the different publishers make their revenue? As an author, do you care?

Further reading:

Porter Anderson’s Extra Ether

Jane Friedman’s comprehensive look at the issue.

Victoria Strauss’s excellent overview.

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Tags: Publishing Facts | Self-publishing

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http://blog.rlcopple.com R. L. Copple

That is probably a valid comparison to make in contrasting traditional publishing and what is more appropriately called “vanity publishing.” Of which Author Solution falls into that category. But the bulk of self-published books don’t tend to go through those, but presses/distributors like Createspace, Lightning Source, and the various ebook channels like KDP, PubIt, Apple, Kobo, Smashwords, etc. Of the ebooks, there is no “check” sent to them (they only make money when the book sells), and small ones for the the paperback self-publishing, but the bulk of their money is made when the book sells to readers as well.

Another distinction to be made is the publisher, whether traditional or self, have cost to bring a book to market, whether that is cover expense, editing expense, formatting, etc. So even those cost a self-publisher has, it isn’t any different than a traditional publisher. One could feasibly make the case even in using a vanity press, which isn’t a publisher more than it is a press and distribution model that the publisher, the author/self-publisher, is paying for.

So, I guess I see your point on the distinction you made, but perhaps isn’t so much self-publishing that you are comparing traditional publishing to, but a more outdated vanity press route. That used to be the only way to get self-published, but that’s not been true for several years now. Obviously a lot of people still use it if it is doing the business it says it is, but I don’t personally know any authors who are using it to self-publish, and the few I know who have, regretted it.
- http://pjcasselman.wordpress.com/ P. J. Casselman
  
  CreateSpace and similar presses are an alternative to the self pubs of years past. Companies like C.S. offer an author an alternative to the old buy in bulk and hope to sell model. Books are made per order and shipped directly to the purchaser from sites like Amazon. In a way, they remind me of Avon. “We make it, you sell it.” There is no money up front and you can buy as little as one book for around six dollars.
  The major drawback is that the author becomes the sole person responsible for getting out the word about their book. Marketing power is the major plus of the big pub co’s. Still, after a wall of no’s to queries on a few books, self-publishing and self-marketing don’t look so bad.
  Ding-Dong, P.J. calling.
  - http://nowthinkaboutit.com EnnisP
    
    Like you say, P J, marketing power is a major plus.
    
    A book can be the greatest treasure in the world but failing to market it well is expecting people to find it without a map.
  - http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
    
    Maybe authors could band together to use the Amway business model..?
    - http://4broadminds.blogspot.com/ carol brill
      
      Hi Andrew, I think you may be onto something wth authors using the Amway model.
      using the “home Party” approach like Tupperware, Pampered Chef, etc. is one of my marketing plans. I write for women, and women tend to be the ones who attend these parties where you invite 10-12 friends, family and neighbors to buy something. It seems like a comforatable, intimate, way to meet readers and get the word out about my novel.
      - http://www.joannaaislinn.com Joanna Aislinn
        
        What an interesting idea/approach to selling books. My issue with that is the same when I attend any ‘party’ of that sort: I feel compelled to buy.
        
        And what confirming ebook sales? How do you handle that at a ‘party’?
      - http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
        
        I write mainly for women as well. It’s a model I’d love to use, but the following makes me a bit reluctant -
        
        1 – I’d feel a bit out of place at my own event, being likely the only male there!
        
        2 – 26 dogs. I could issue ear defenders and give a talk in ASL..?
        
        Seriously, what’s attractive is that it allows for a couple of readings, and some give-and-take about the philosophy behind the book. Most people love to hear a book’s backstory – I’m no exception.
      - http://kristinlaughtin.blogspot.com Kristin Laughtin
        
        Serious question: what would be the appeal of this over a more traditional book club? In this scenario, people will feel pressured to buy the book. In the book club scenario, there’s at least discussion and follow-up, etc. (I assume both scenarios have discussion time and snacks.)
      - http://4broadminds.blogspot.com/ carol brill
        
        Kristin, visiting book clubs is on my list, too. What’s the appeal of the “party” concept. Think of why it works with tupperware, baskets, candles, etc.
        It’s a social outing-a group of friends in another friends house sipping something?? and munching cookies. The draw over the book club is it reaches the many, many women who are not in book clubs. Gives them a chance to spend fun time with friends and family and meet an author! pretty cool, No?
    - http://pjcasselman.wordpress.com/ P. J. Casselman
      
      Andrew, it’s being done and it can be quite beneficial. The greatest example in entertainment might be United Artists. When the studios mistreated them, Charlie Chaplain and his gang formed a powerhouse. Here’s three ways fellow writers could do it for free (off the top of my head)-
      
      1. Have a single web site that branches to all individual sites. This page will be highly promoted by all of the crew and should contain book promos and catchy headlines.
      
      2. Create a book of short stories that all members of the group cross-promote. This gives a larger audience an introduction to the writers.
      
      3. Work on places like Amazon as a team. Review each others works and become a recognizable unit when you review other writer’s books (e.g. Andrew from United Writers). It creates a buzz–”What’s ‘United Writers?’ what do they do and how do I join?
      
      These are off the cuff, but I’m sure you have many more ideas.
  - http://talesfromtheredhead@blogspot.com Jennifer Major
    
    I see you’re coping well without me, carry on….
    - http://pjcasselman.wordpress.com/ P. J. Casselman
      
      Coping Jennifer, but not thriving. We make an OK pizza, but you’re oregano.
      - http://talesfromtheredhead@blogspot.com Jennifer Major
        
        Thanks PJ. EXCELLENT trip so far, quite a learning curve.
  - http://www.josephjpote.com Joe Pote
    
    I’ve been very pleased with CreateSpace.
    
    I’ve not made any money to speak of, off of this little venture, but I’m also not out any money.
    
    I did all the work, and CreateSpace/Amazon provide a means of providing the product to the consumer on a Print On Demand (POD) basis.
    - http://pjcasselman.wordpress.com/ P. J. Casselman
      
      That POD is quite helpful to us hand to mouth guys!
      - http://www.josephjpote.com Joe Pote
        
        Absolutely!
        
        I’m only risking my time and effort, not my retirement fund…
  - http://einefeistyberg.wordpress.com Cherry Odelberg
    
    Publish on demand is the only (relatively) risk free way to go for self-publishing….
  - http://einefeistyberg.wordpress.com Cherry Odelberg
    
    Publish on demand is the only (relatively) risk free way to go for self-publishing.
    
    I think there is a huge difference between vanity press, intelligent self-publishing, and print on demand. Subsidy publishing is kind of a chameleon.
    
    The big dream would be to sign to a traditional publisher and have them believe in the manuscript so much that they took the risk of printing and wholehearted marketing and I could focus on writing the next book.
    Self-publishing, vanity publishing, subsidy publishing and print on demand, you get what you pay for – just like a cafeteria. And yes, they are always trying to sell the writer something.
- http://AskthePublishingGuru.com Jason Rutherford
  
  I agree with Mr. Copple. I encourage self publishing authors to stay away from Vanity Publishing Services. However, self publishing with Lightning Source, CreateSpace, or KDP, has become a viable option for authors.
http://bbebooksthailand.com Paul Salvette

I would like to follow up with Mr. Copple’s excellent observation. This is just my $.02, but I think “self-publishing” is defined as an independent author taking on the risks and responsibilities normally associated with the publishing house (e.g. finding an editor, book design, marketing, etc.) It basically means the author becomes a small businessman. This a serious decision for the author to make if they want to go this route.

However, I would characterize Author Solutions as a “Vanity Publishing” outfit, since they take royalties and sell overpriced package. Our company, BB eBooks, provides eBook design services to authors and self-publishers, but I hope people won’t lump us into the same category as Author Solutions. We’re more like the plumber that comes to your house to fix the toilet for a one-time fee, and we never go near author’s royalties. A lot of services providing solutions to authors (editing, marketing, distribution) don’t operate with the same model as Author Solutions. Penguin’s move to acquire this company is a very desperate attempt following their Book Country program, which was not received very well by the indie community.
- http://tnealtarver.com TNeal
  
  Paul,
  
  As one who has gone the “self-pub” route, I appreciate what you’ve written. I was surprised by how the royalties were split between my publishing partner and me. I thought I would be carrying the risk and paying the bills then receiving 100% of the royalty check. That is not the case.
  
  My first full quarter was April-June so I’ll see my first royalty check soon.
  
  Thanks though for educating the masses.
  
  Tom
- Sheila
  
  Agreed. I think a distinction between self-publishing and vanity presses should be noted here.
http://bbebooksthailand.com Paul Salvette

Ms. Rachelle, do you have a link to the post you mention when you say “I addressed this very issue over 2½ years ago on the blog (December, 2009)”? I’m very interested in reading it.
- Rachelle Gardner
  
  I purposely didn’t include the link because frankly, the post IS over two years old and reads like it! The opinions I expressed are outdated now. But here’s the link.
  http://www.rachellegardner.com/2009/12/where-the-money-comes-from/
http://www.gabrielle-meyer.blogspot.com Gabrielle Meyer

While I realize that even traditionally published authors are being called upon more and more to promote their books, I’m still convinced that there is a lot to be said about a publishing house marketing an author’s work. I’m interested in producing a great book – not going into the small business of also marketing and selling that book on my own. For every best-selling, self published author out there, there has to be hundreds of thousands who never receive their investment back. If my writing is excellent – as all self published authors must truly believe – than I’m willing to fight to have it traditionally published – if for nothing else but the pure joy of knowing I’ve “arrived.”
- http://pjcasselman.wordpress.com/ P. J. Casselman
  
  Keep plugging away, Gabriel. Whereas I’ve not read your book, I have read blog. You’ve got a good voice and plenty to say.
  - http://www.gabrielle-meyer.blogspot.com Gabrielle Meyer
    
    Thank you, P.J. I appreciate you stopping by my blog and encouraging me to keep plugging away.
- http://jackiesbackporch.blogspot.com Jackie Layton
  
  Gabrielle I agree with you.
  
  I’ve worked so hard on learning to write a good story that it seems like it would be overwhelming to learn the entire process of publishing my story too.
  I’m on board with promoting a book. I’ve watched other authors do blog tours, book signings, etc.
  I would love to know my story was worthy of a publisher. If for no other reason than to know somebody was in my corner cheering me on and hopefully giving me ideas on better ways to promote my book.
- http://kristinlaughtin.blogspot.com Kristin Laughtin
  
  This is exactly my viewpoint and the main reason I plan to pursue a traditional publisher as my primary goal. It’s a big enough challenge getting my writing up to snuff, and I’d prefer to have at least a bit of help with all the other tasks that go into making a published book successful.
http://keepingsane.com/ Kat Ward

I would have loved to have signed with an agent, been taken on by one of the big six with a slew of professional editors, packagers, designers, marketers and promoters, but after querying for a while, I had an opportunity to start a small indie publishing company with two writer friends. Yes, now I have to be all the entities listed above, but I loved my partner and I designing my book, not having to give in to the professionals who “know” better because I don’t have the experience or clout to put in my two cents. Not every book taken on by the big guns—and which may become a mammoth bestseller (my personal favorite example is “The Bridges of Madison County”)—is a well written book. I was at a writers conference and an agent got up and went on and on about how aspiring writers’ writing must be excellent. But then she went on to use as an example one of her clients, Maeve Binchy, whose books I consider hardly digestible. But the public loves her books and Binchy makes this agent money. I think there are so much incredible writing that gets passed over by agents and traditional publishers. I’m just glad that these days authors get a chance to see their story in print and as an eBook. It gives writers more options and the possibility to fulfill their dream of being an author, even if they don’t ever make the big bucks.
- http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
  
  I was very lucky to have gotten a traditional contract with a ‘subsidy’ company, but I would have loved to work with an agent. I could have learned so much!
- http://www.joannaaislinn.com Joanna Aislinn
  
  Amen. And some HAVE made big bucks on their terms (Amanda Hocking) and others have chosen to keep it that way (JA Konrath).
  
  It’s great to have a choice other than the trad route, which tends to be run by subjective forces. Choice creates opportunity, something the self-pubbed author can run with.
  - http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
    
    Very true. The preference is also whether one thrives on the exposure of walking the high wire of self-pubbing (or any self-employment), or the cozy cocooned feeling of being part of something bigger.
    
    That is NOT a way of saying “you’re brave if you self-pub, not brave if you hold out hope for a trad”! I’ve been the self-employed route (like, right now). I know how much it costs.
http://nowthinkaboutit.com EnnisP

Brilliant observations Rachelle. I hadn’t thought of it in exactly those terms but I’ve always been afraid of self publishing mostly because of the initial outlay.

Self publishing may work well for an experienced writer with a proven record but for newbies its a gamble.

And, yes, even traditional publishing comes at a cost. Newbies are under pressure to get editing assistance out of pocket before contracting a publishing deal but that is just a small part of the overall expense and is a great learning experience. You’re getting something conceptually tangible for your money.

My experience with self published books hasn’t been very good. Overpriced in most cases. In the case of hard copies, less than optimum design and poor printing. And the lack of design and layout for ebooks is excused with, “makes it easier to print.” That means I am paying a high price for a digital copy initially and then paying the printing costs also. This isn’t a win-win scenario for buyers.

One drawback for the author, as I understand it, is in some cases your book is sold with a 60 day, no questions asked return policy. Major portals (e.g. Amazon) don’t require this but some popular online marketing schemes do.

I understand why they require this. There is no quality assurance regulations for self published ebooks so they tend to be vacuous. I know this from experience. I’ve bought several.

But, waiting 60 days to know you have a sell is not good business especially when nothing is returned.

One online expert said: “Examples of (self published) authors seeing a return of more than an extremely small part of their outlay through a vanity publisher are extremely rare.”

And I would say that a reasonable return for your effort is the evidence that a good product has been offered to and appreciated by the public.

If you want to self publish, write a blog. If your serious about publishing go traditional

No offense intended to any self published authors reading this. Just making a point.
- http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
  
  I’d take issue with the thought that “a reasonable return for your effort is the evidence that a good product has been offered to and appreciated by the public”
  
  Three words…Vincent van Gogh.
  - http://nowthinkaboutit.com EnnisP
    
    Good point but I didn’t say the return had to be in the author’s (or painter’s) lifetime.
    - http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
      
      Touche!
- http://pjcasselman.wordpress.com/ P. J. Casselman
  
  The majority of authors go to self pub because their work received one too many no’s from the traditional side. Some might argue this, but nearly every one will admit they tried the traditional route first. Self-pub is when you believe past the door slams.
  The reason people get so defensive about self publishing is beyond me. It’s like going into business for yourself when Microsoft won’t accept your resume. However, that is the kind of tenacity that deserves respect from the traditional crowd instead of the jeers I see them often receive. Doesn’t anyone remember “The Little Giants?”
Neil Ansell

As a Penguin author myself, I can only say that this did not feel like a proud moment. There is nothing wrong with self-publishing if that’s what people want, but Author Solutions have a particularly bad reputation for exploiting their writers by foisting useless and expensive products on them. Over two thirds of their income comes direct from writers rather than from royalties. The vast majority of their writers end up losing a lot of money. They are a business built on financially exploiting people’s dreams.
- Else
  
  Word. I’m not published by Penguin, but have and/or have had deals with four major publishers. So I’m reading about this and feeling kind of funny, knowing that if this trend toward mixing tradpub and vanpub continues, my advance checks are going to be paid out of other writers’ dreams.
  
  I don’t like that thought at all.
  
  (To put it more clearly: Say my agent presses Big Publisher for another $20K on an advance. Big Publisher has that amount handy because five writers have just paid them several thousand for the honor of being published. The five writers are being severely misled about their role in Big Publisher’s plans. And the writer getting paid will have to feel kind of icky.)
http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser

The difference in business models is very important to me, because I could never have afforded to send my publisher a check.

The self-publishing model above is something I see more as an entrepreneurial tool; something on par with Microsoft Word, or perhaps more accurately, one’s accountant. The writer’s a manufacturer of a product, or family of products, and the publisher becomes part of the contracted manufacturing/distribution system.

I’m not sure that quality control is the issue it once was, because many traditionally published book have ‘moved backwards’ in quality. I read a lot in subjects in which I suppose I’m an expert, of sorts, and the technical errors (and typographical errors which look like technical errors) have become much more common in the past fifteen years. Writing style…depends. There have been a lot of traditionally published books that were execrable.

Prices are a different issue, and while many self-published books have higher prices, the numbers aren’t that far apart. To some degree we may be spoiled by Amazon’s deep discounting.

The wonderful thing about self-publishing is that it escapes the ‘censorship’ of the Big Six. For example – today, action sells. If something isn’t happening within the first page or two, the reader is assumed to be gone. Look at an older novel – the start is almost always slower, but the characters are usually richer, and the plot more nuanced.

Before large-scale self-publishing, the lament ‘why do they not publish writers like Nevil Shute/John Buchan/H.G. Wells anymore?’ was valid. Now – it may not be, and aren’t we the luckier for it?
http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser

I’ve got to get out of the habit of writing my blog and reading others at 2 am.

The pit bulls just took over my bed. Guess I’ll get some work done.

(See? You, too, can have time to promote your book…learn not to sleep.)
- http://www.joannaaislinn.com Joanna Aislinn
  
  LOL. Is that the secret?
  - http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
    
    Actually, for me it has bee…zzzzzzz.
    - http://pjcasselman.wordpress.com/ P. J. Casselman
      
      Writing can definitely be a dog’s life.
http://www.erniezelinski.com Ernie Zelinski

I lost a lot of respect for the people who run Pearson/Penguin when they purchased Authors Solutions.

Unless they change the way Authors Solutions operates, they should change the name of the company to “We Rip Off Authors”.

The so-called Self-Publishing companies’ business model can be described in these comments from blog posts regarding Lulu. Keep in mind that Lulu is a much better choice than Authors Solutions.

“Indeed, said Robert Young, chief executive of Lulu Enterprises, based in Raleigh, N.C., a majority of the company’s titles are of little interest to anybody other than the authors and their families. ‘We have easily published the largest collection of
bad poetry in the history of mankind,’ Mr. Young said…”

“…Lulu.com, one of the most popular and cost-effective of the POD services
and still independent despite the apparent trend toward consolidation among POD services, is explicit about its long tail business model . . . its founder identified the company’s goal: ‘…to have a million authors selling 100 copies each, rather than 100 authors selling a million copies each.’”
- http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
  
  A million authors selling 100 copies each?
  
  That causes an almost visceral sense of anguish.
  
  It’s the return of Babel.
  - http://pjcasselman.wordpress.com/ P. J. Casselman
    
    Mow five lawns. Money doubled.
Lanny

The self-publishing scenario is certainly a bewitching new element to publishing. As an unpublished author, who may remain so, I look at self-publishing as a possible alternative only after I’ve been rejected by traditional publishers. However, I may be quite mistaken on that assessment.
- http://blessed-are-the-pure-of-heart.blogspot.com Andrew Budek-Schmeisser
  
  Personally, I’d look to the traditional methods first, unless you have a LOT of marketing savvy. The trad world is no be-all end-all, but it surely takes at least some of the learning curve off your back.
  
  Uh, oh. I think I just mixed a metaphor, there…
  - Anonymous
    
    Andrew, you have a misconception here. Traditional publishers provide no marketing support to new writers.
    - http://www.joannaaislinn.com Joanna Aislinn
      
      Trad publishing tends to focus its time, energy and resources on authors who’ve already made them $$, or so it seems. I have a friend who was recently pubbed w/one of the bigger houses. She blogged about the tours and 4-hour dinners that were just part of the run, all while being put up in seriously ritzy, beautiful hotels.
      
      I knew of that author before and am not lacking in respect for said author’s work. Honestly, though, I started reading the book being marketed and couldn’t get past page 20 b/c I couldn’t deal in the style (which to me, was pretty dated).
      
      I promise you, though, that pub house spent huge bucks promoting that author and book. Anyone who expects that w/a smaller trad publisher might need to rethink his/her expectations. Outside of not doing the cover work, formatting and printing, the author will still be setting up all his/her appearances, launch parties, promo and most of the reviews too.
      
      Anyway, there is MHO on that matter. I don’t claim it to be gospel just what I’ve learned along the way.
http://www.timothyfish.net Timothy Fish

As some have already mentioned, there are at least three kinds of companies, not just two. The traditional publisher makes money when the book sells. The subsidy press makes money by selling services. And then there are companies that are essentially printers and distributors. Some companies fit within all three categories.

I think an author does well to understand where the partnering company makes their money. But there are many more things to consider.
http://www.pointdeception.com Jim Gilliam

This is an ongoing hot topic. All of the above comments are valid. Writers want to get their work out there before they are ready for the Shady Rest Retirement Community. First you write your book. Then you try and find an agent. That can take six months or more if you’re lucky. Then your agent has to sell your book to a publisher. Another six months if you’re lucky. After editing etc, your book will probably hit the street in eighteen to twenty-four months after the publisher accepts it. However, the publisher will give you an advance. All in all, you’ve invested three years after your manuscript is finished. How long did it take to write it? Say two years. Okay, that’s five years from inspiration to publication. If your advance is $25,000 that’s $5,000 per year 15 percent of which goes to your agent or $3,750 leaving you a grand total of $22,250 for five years invested. No wonder the standard advice to beginning writers is: Don’t give up your day job! Forget royalties. Publisers only recoup their advance on ten percent of the books they publish.

If you weant to get your book into one of the better publishing houses like Doubleday you MUST have an agent! I wish you well.

Whether you self publish or traditionally publish, chances are that Ingram is going to be your printer.

This is a huge problem for new writers. Each of us must endeavor to solve it in his or her own. Please be careful in your choice of publishers. I could write a whole book on the subject of pen to paper to Amazon. The wonderful thing about blogs like this, is that we can all come together and exchange IDEAS!
- http://www.pfsltd.com/newnovelist/ Andrew Man
  
  Lots of comments and feelings is Rachelle worried about her job? Seriously, my experience of self publishing with AH has been good,it maybe vanity publishing but its an outlet for authors who want to have a say and have no idea how to do it? Lets look at the good points:
  1) they print what you write, no censorship!
  2) They do it fast, like in a month?
  3)You can design your own cover, subject to ownership rights.
  4)I found the service polite and efficient, rare in business today!
  5) They introduced me to Book Expo America and got the books there in time!
  6) The cost at $500 a paperback is less than a weeks shopping?
  7)Yes they offer lots of extras, some good some not, but you can negotiate!
  8)Don’t expect any profit from this, but it may just you you started?
  This has been my experience with AH, what will happen under the new management of Penguin is anyones guess?
Rondi Olson

Author Solutions is notorious for their dishonest marketing tactics. I hope Pearson will elevate their level of integrity so there will be one less shark preying on the hopes and dreams of naive authors.

We can hope, can’t we?
http://triplethreaded.wordpress.com Samantha Bennett

Definitely an interesting move. Wondering about the ripple effects of this…
http://www.purpleplumpress.com Anne Alexander

I agree with what everyone has said about Author Solutions. I have known several people who have used Xlibris and iUniverse and I was appalled by what they paid and how harassed they continued to be to buy more of their services. There ARE many honorable independent publishing companies. dog jumping (my company) is one of them. We produce beautiful print and ebooks. A key thing authors need to be aware of is that book production costs are only part of what you have to consider – many companies require a (too) high retail price and give you ridiculously low royalties.
http://www.rasavary.com R.A.Savary

Thanks, Rachelle, nothing new here, is there? Like those before me, I write because I’m not going to drink the milk just because others are doing it and reporting on (with bias) how beneficial it is. I’m going to follow the cow around, see what it eats, see what happens to the calves as they grow up; I’m going to follow the farmer and watch what he does with the milk, then follow it along its journey to my glass; I’m going to trace down and watch all the other people who don’t drink the milk. I’m going to do a lot more than this, but what I’ve listed should make my point. If I didn’t do the things mentioned above(and the many not listed) I probably wouldn’t have anything worth reading.
Anonymous

Rachelle knows the difference between vanity press and self-publishing.

What a manipulative post. How annoying, but unsurprising, that a literary agent is trying to confuse writers by providing mis-leading information.
http://www.meghancarver.blogspot.com Meghan Carver

Thanks, Rachelle, and all the commenters, for putting into words what has been wiggling around in my mind for a while. As an author, it very much matters how the publisher makes the money. Self-publishing companies don’t necessarily believe in me or support me as a writer. They trust in the sufficiency of my funds. (I’ve never self-pubbed. This is just what I understand from reading about it.) A traditional publisher, though, is willing to risk their funds to promote and encourage me. I’d rather have that sort of support any day.
http://livingthebodyofchrist.blogspot.com/ Connie Almony

Wow! What a perfect way to put this. I’ve known many people who were contacted by self-publishing groups, making the author feel they’d suddenly arrived … only to have the bubble burst when the researched the group to find most of the authors were not successful. For myself, as an unpubbed writer, I have found the process of breaking into traditional publishing one challenging me to hone my craft more and more. I needed this challenge and will continue hone until–hopefull–it gets noticed.
http://www.rebeccatalley.com Rebecca Talley

Interesting discussion. I’ve had three books published by a traditional publisher. I currently have a manuscript that I am submitting to agents but I’m on the fence whether traditional publishing or self-publishing is the way to go for me. Traditional publishing definitely has its perks, but self-pubbing offers some exciting possibilities. I would never hire a self-publishing company. If I do go the self-pub route I will be hiring a professional editor and a cover designer. I love that there are so many options for authors and I appreciate blogs like this that explore the options and allow us to discuss them.
http://davidatodd.com David Todd

The distinction in the business models doesn’t concern me, if by concern you mean worry. I tend to divide publishing into two sides: publisher-financed publishing and author-financed publishing. Trade publishing is the former, self-publishing is the latter. Theoretically programs such as CreateSpace, Kindle, and Smashwords are more like publisher-financed publishing, though are probably a middle ground model, one of mere printing/warehouses (i.e. servers)/distribution (i.e. web sales platforms, info-superhighway pipes, etc.).

I suspect that Penguin will significantly change how Author House does business, making it less an author-financed publisher and more of a middle ground publisher. Penguin gets their backlist, client list, book layout expertise (which they probably don’t need). It’s going to be interesting to watch.
http://www.summerbaypress.com Wendy Dewar Hughes

This article is typically slanted toward traditional publishing snobbery and plays on writers’ emotions by talking about his or her “hopes and dreams” in relation to self-publishing only.

Essentially, whether to attempt to publish via the traditional model or to publish independently is, and should be, a business decision.

With traditional publishing, the publishing company is buying the rights to your work as their raw material to make money. They pay you a royalty for the use of your intellectual property but it is a licensing deal the same as Mickey Mouse’s mug on a t-shirt is. There is nothing wrong with this model. You just have to find the right company; the one that sees the value in your work as a money-making commodity.

With independent publishing you will have to buy services to help you prepare your product for the market (unless you know how to do it all yourself – with the exception of editing your own work). You have to pay for those services and it’s up to you how you want them packaged and what value you place on the services you purchase. The onus is on you to shop around for the best services to suit your needs.

Think of it this way:
You’re a farmer and you grow carrots. You can try to find a wholesale company that will purchase your carrots at a discount (so that they can mark them up and make a profit), wash them, package them, put their company name on them, distribute them to stores and handle the shipping and retailer relations. Your job is just to grow the carrots and find the right wholesaler.

Or, you can sell your carrots yourself. In addition to growing the carrots, you can buy a carrot washing machine, design and order packaging, bag your carrots, load your carrots into the back of your pickup truck and take them to the farmers’ markets. You’ll have to pay for your booth space and your signage and you’ll have to choose the right market for your carrots. (You’ll likely sell more carrots at the local farmers’ markets than you will at art markets or fairs.) You make all the profits, after you’ve subtracted your costs.

When you remove the emotion from your decision and look at it from a business point of view, you simply need to decide which model works best for you. You don’t need to defend the wholesale, big box model or you’re a bad grower. You don’t need to defend the farmers’ market model or you’re the little guy battling the big corporate monster.

For those who know their market and want to reach it themselves through their own efforts, who are willing to shoulder the costs and tasks of running a business (editing, cover design, marketing) and producing a product worthy of customers’ interest, the self-publishing model is a great alternative to the traditional model. If you’re not interested or willing to do that, then your choice is the traditional model.

Which one is more risky? It depends on you and what you want for your business and your writing and publishing career. Traditional publishing puts all the decisions in the hands of a company whose goal is to make money using your work. Self-publishing, or creating your own independent publishing imprint, keeps the decisions in your control and you make the profit from your work.

If you’ve decided that you can handle running your own publishing business and require a la carte publishing services that won’t cost the moon, I recommend summerbaypress.com.
http://www.by-stuart.com Stuart Schadt

The post opend some good discussion. I’ve been submitting and now I am moving to self publishing. It has taken me some time tto realize the differences between the vanity exploiting companies and the companies that give me an affordable entrepenurial opportunity.
Stephanie M.

I’m represented by a very small press. My purchase of my own author copies will likely represent a substantial percentage of the income from my book, at least at first. Is this vanity? I don’t think so, since they pay for everything and do my marketing. On the other hand, what if my author copies are the only major investment in my book? I guess that would turn it into “vanity.” But I don’t care, I’ll be able to hold my book and give it to family and friends.
- http://www.christianediting.blogspot.com Iola
  
  It’s vanity if you paid to get published or marketed.
  
  Money should flow FROM the publisher TO the author. Otherwise it’s a vanity press.
http://writeitforward.wordpress.com Jen Talty

While I agree Author Solutions makes their money when a writer gives them money, self-publishing in today’s age does NOT necessarily work that way.

When an author SELF-PUBLISHES on CreateSpace it is a FREE service. Yes, you can “cut them a check” to do all sorts of things, but you don’t have to pay them to publish their book–they simply take a small fee if one is sold–kind of like publishers…

Self-Publishing does require the author to dish out some money. They need cover art, properly formatted eBooks and print book, but there is a difference in self-publishing and making our money from READERS versus something like ASI and I think that needs to be address. To day that self-publishing makes money from writers is not a true statement. ASI makes money from writers. Myself as a self-published author makes money when a reader buys my book–period.
J. Pung

While your words are true, it’s about much more than who makes money from whom. Self publishing is a popular option for those who: want to maintain control over their project and realize the quality of their book may not garner the attention of publishers beyond the self-publishing arena.

More to consider.
http://www.henwoodtitles.weebly.com Brian Henwood

Well this may not be a popular opinion, but I do not have a lot of sympathy for authors who are “misled” by vanpubs. I do not think they are being misled by the publisher as much as they are misleading themselves.
I think many of these authors are fully aware of the risks involved, but are willing to roll the dice. Maybe they are lazy or impatient. Maybe they think their work is just THAT good. Maybe it is.
The point is, regardless of what they say AFTER the fact, I seriously doubt anyone who has spent the kind of time and energy it takes to produce a completed novel is willing to just blindly hand it over to the first person who throws them a sales pitch. I believe they take a calculated risk, which often does not pan out. I don’t blame the vanpub for that. They are simply providing a service.
Before I knew ANYTHING about the industry I stumbled onto those sites. 30 seconds of Google Search later I decided that wasn’t the route I wanted to take. I’m not saying vanpubs are bad, they just aren’t for me. But for people who said they were duped by vanpubs, it literally took me 30 seconds to find 1000 negative reviews of “Publi$# @/\/\erica” (part of name bleeped out on purpose *wink*). If you don’t take even THAT much time to keep yourself out of trouble than I have just one thing to say:
.
A fool and his money are soon parted.
http://www.josephjpote.com Joe Pote

You make a very good point, Rachelle, in the difference in business models.

As others have pointed out, above, CreateSpace offers a third business model, where neither the writer nor the publisher are out any money, but work together to make the product available to the consumer.

I wonder if any of the traditional publishing companies would consider yet another business model.

What if they offered free POD services, similar to CreateSpace, but also had an option where, for select books they believed they could sell, they would also offer the Author access to their marketing services in exchange for a higher margin on sales.

It seems like it would be a way for the publishing houses to continue doing what they do well, at a lower level of risk for both Author and Publisher.

What do you think?
http://www.bydavidklein.com David Klein

I’ve been reading your blog for several years and this is one of the most interesting and educational posts yet (I mean, it’s a great blog, but this one really struck me). Completely crystallizes the situation of traditional vs. self.
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http://www.stevelaube.com Steve Laube

Brilliant, as usual. A magnificent comparison.

There are packagers out there that prey on the uninformed writers. They truly are nefarious. See this site for help: http://pred-ed.com/peba.htm

Other packagers make no outrageous claims and, in essence, simply offer publishing services. But any that say they guarantee your book will be in stores, or any other grandiose claims …see the above first paragraph.

Be that informed writer who does their due diligence before signing with an outfit to help them self-publish. All are not created equal in this category.

Steve
The Steve Laube Agency
http://jrbuckley.com J.R. Buckley

Can self-publishing hurt an author in the long run as they seek representation? Is there an agent’s code by which they automatically write off a self-published work as ineligible to be pitched to a major publisher?
Anonymous

I agree with the previous anonymous poster.
Rachelle surely knows there’s a huge difference between a vanity publisher and the POD publishing model where there’s next to no outlay to the author, beyond what s/he decides to pay. I think there’s a legitimate concern with Pearson buying Author Solutions. But Rachelle does an injustice to writers by pretending that all self-publishing is the same. Frankly, I’m both shocked and disappointed in this post.
Catherine Hudson

I think its always worth considering how someone makes their money – it will impact the outcome whether we like it or not. As an author I don’t want to stick my head in the sand and not think through all the information – great post – thanks again Rachelle
Julia Denton

This post does an excellent job of explaining, in fairly simple terms, the primarly difference between traditional and self-publishing. I think it’s a valuable service to all aspiring writers to have these distinctions clearly spelled out. Well done.

What the post doesn’t mention is that the practice of making money from “a writer’s lifetime of hopes and dreams” is not limited to self-publishers.

It seems to me that there is an entire industry of books, magazines, expensive conferences and all manner of online products for sale to aspiring writers, most of whom will never make it in traditional publishing. We hear all the time that if we really hope to make it in the world of traditional publishing, we will most likely have to attend the conferences (which some cannot afford) and get to know the right people, working for years on end to hone our skills and make ourselves known to those in power. Even with all of this, many of us still will not make it in traditional publishing.

Please understand, I’m not saying that self-publishing is an attractive alternative in most cases. I’m only pointing out that those on the inside who are part of the traditional system might not see this issue of people making money off writers in quite the same light as those who have already spent, and continue to spend, much time and money trying to break in through the traditional route.

The sad truth is that people are going to be making money off us at some point in the game. In the final analysis, there are writers who might do well to spend their money on having their books in print, even if only for themselves and/or their friends and family, rather than spend it chasing a dream that is, for whatever reason, beyond their reach. The important thing, as Mr. Laube pointed out, is that we take the time to inform ourselves and choose our options with the full understanding of what we will or will not be getting.
- Danyelle
  
  As others have pointed out, this is not an accurate representation of self-publishing. This post actually deals with three different business models: trade, self, and vanity publishing. I want to give Rachelle the benefit of the doubt, but an agent *should* know the difference–especially since they are industry professionals.
  
  Trade and self-publishing aim to make money by selling their books to readers. Vanity publishers make money by selling books to their authors.
  
  Does self-publishing and vanity publishing *sometimes* cross paths? Yes.
  
  Does self-publishing require money? Most of the time. Like trade publishers, self-publishers must (if they choose to) pay for things like editing, cover art, formatting, etc. These costs are for services rendered. If hiring a cover artist and paying them a fair price is vanity publishing, then by that logic, trade publishers are also vanity publishers.
- http://davidatodd.com David A. Todd
  
  Julia:
  
  I almost posted something like you did, mentioning the conference industry and how money flows from the aspiring writer to those who run conferences and sell writing books and various subscription or one-time on-line services. I spent about nine years pursuing breaking in to trade publishing. That included eight conferences (4 national, 3 regional, 1 local) for a total cost of $6,300. Except for bunking with relatives and obtaining some scholarship money, it would have been around $8,000. that doesn’t include the cost of books bought or submittals made before electronic submittals became the norm. And, of course, that says nothing about the cost in time, including time to study how to query, how to pitch, the elevator pitch vs the long pitch vs the hook vs the one paragraph summary, how to write proposals and market analysis, etc.
  
  I decided trade publishing was costing me way too much money, so I finally decided to self-publish. I’ve made only $313 in revenue so far, with several new titles published recently and another novel up soon. But at least money is flowing in my direction now instead of into a vast sinkhole as it was for nine years.
http://www.christianediting.blogspot.com Iola

I have two points to make.

First, there is a world of difference between self-publishing and vanity publishing. Self-publishing is when you do it YOURSELF. You pay an editor, a cover designer, a file converter, a printer (or none of the above). But you do it YOURSELF.

A vanity publisher (like Author Solutions or Tate Publishing) makes their money from authors, like Rachelle says. But that’s not self-publishing.

Second, it’s not just publishers who are out to fleece writers. Some agents (NOT Rachelle) are too.

Example: the 2012 Christian Writers Guide features one “literary agency” who charges a $300 ‘evaluation fee’. The agency has just ten (count them, 10!) clients.

Where do you think they are making their money? Off selling books to publishers? Or by ‘evaluating’ manuscripts?
http://www.idafreer.com Ida

I published my first childrens novel with iUniverse, a subsidiary of Authorhouse a year ago at a cost of $1000. They did what they contracted to do, no more, no less. When I contacted them a month ago about correcting 4 small typos I had found, I was told it would be an addition $350.

Six months ago I published the sequel to the first novel through createspace and Kindle, using a professional cover artist but incurring no other expenses for a total cost of $100.

I suspect Authorhouse, iUniverse and similar get first time intimidated newbies but most writers more on.
Anonymous

Pearson/Penguin paid 116 million to aquire Author Solutions. Please don’t imply that publishers are hurting for money.
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Manuel

Have you ever tried to make money developing apps for iphone?? You don’t need to know anything about programmin and you can make a huge amount of money.
http://bitly.com/O9IsMP

I make my first 1000 within the first days.
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http://minority761.blogspot.com download software

very informatif i still learns be a publsher..
http://minority761.blogspot.com/2012/11/download-avg-anti-virus-offline.html
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