Jan 17

This is a guest post from Chaz Nichols, the Director of Business Development and Alliances with Snowfall Press. Chaz works extensively with our print network, especially helping international printers who are interested in plugging into the Snowfall operating system.

Publishing, as we have known it, has changed forever. And it has changed in astonishing ways, at an astonishing fast pace. The changes are huge, dynamic. But, ironically, these grand changes are best highlighted by how globally small the industry has become. In fact, the phrase, “it’s a small world,” has become a colossal understatement.

Courtesy iStockphoto.com

A theological professor logs into a global network, uploads the PDF of her book, and with a few key strokes starts a single copy printing on a press miles away. In a few minutes, once printed and trimmed, the book will be shipped directly to a friend for review.

A small, growing publisher is keeping its spending low and cash flow healthy using a virtual book inventory model. Books are printed, one at a time, as they are sold. Once printed the books are then shipped directly from the printer to the end-user customer. This model has given the publisher the financial strength to find profitable target markets outside of its own country – further expanding its cash flow and revenue base.

An entrepreneurial American, seeking to reach the Russian market in Northern California, logs on one night to a global print network, finds his uploaded books and initiates a print run of 50 books. By noon the next day they will be in a Mendocino bookstore ready to be purchased.

Another enterprising person, wanting to build a library of literature for a unique people group, writes all of the literature on their computer and air expresses the data to a friend – who then uploads the copy to a book printing network. In a few weeks the perfect bound books are flown back. The turnaround only took weeks rather than months.

There are two common threads of all these stories. The first is that none of the stories took place in the United States or Europe.

The seminary professor is from Colombo, Sri Lanka. The publisher is located in a Former Soviet Union (FSU) country. The entrepreneurial American is working in a closed country in the middle of Asia.

And the enterprising person is actually a missionary in Papua New Guinea. He is in the jungle most of the year and rarely gets to any location that could rationally be called civilization. By using a high frequency radio signal, he can email his desires for books to a friend and then send a memory stick to his friend when a supply helicopter lands in his village every so often. The friend can then make a PDF of the content on the memory stick, upload it to a global network and have the book printed and shipped back in a relatively short amount of time. Where there were once very few books in the tribal languages of the people this missionary serves, there is now a growing supply of literature.

The second common thread to these stories is that all these people are publishers…publishing in an astonishingly small world now…but in really big ways. The technology is so sophisticated now that it has become simple enough to be embraced by anyone with access to the internet.

And the really amazing aspect of the new publishing world is that the professor in Sri Lanka, the growing publisher in FSU country, the entrepreneur in Asia, the missionary in Papua New Guinea have equal, and in some cases better, access to printing globally than people in more developed parts of the world.

With distance measured by the speed it takes for an electronic file to traverse the internet, the world, and the publishing industry, has become very small.

What other ways can print networks be used to bring content to new readers around the world?

Jan 10

Pricing a book that is printed digitally, whether print-on-demand, or short run, can be challenging unless you understand how sales channels work.

In traditional publishing, a book might be printed for a dollar or two (using long run offset), and because of the high overhead (buildings, staff, marketing and sales budgets, etc), the retail prices might be five, seven, or even ten times the print ‘cost’ of the book. So a $2.00 print cost* on a book might land the book at $12.99 to $16.99. (*Print costs always need to be fully burdened with make-ready fees attached.)

It is important for publishers is to make sure they are weighing all of their ‘costs’ when they look at this formula. A publisher can’t just look at the printing cost alone. The financing, shipping, warehousing, damage, obsolescence and remaindering costs also need to be factored into the equation.

Digital printing prices might look higher, but generally they are a lot closer than people might think, when all of the costs mentioned in the previous paragraph are factored in. Digital printing can allow publishers to have ‘virtual warehouses’ and drop shipping off press which can eliminate physical inventory sitting on shelves and the pick/pack expense. Digital printing-on-demand (POD) or micro inventory can reduce carrying costs and increase cash flow, which is an important factor for any business.

I read a recent article in which the author shared the following. “… if I went ahead and had the thing printed up directly through an off-set printer–and ordered a few thousand of them–I could probably cut the cost of the book in half, and maybe even a little more. But I’d have to pay the upfront fee to buy the books and then I’d have to figure out a way to sell them.” This can put a lot of pressure on a new or small publisher…one which has sunk many a publisher.

If you are interested in working in the retail channel, you have to remember that the retailer (and distributor if you are using one…and most retailers will require one) is going to need a margin to live on. If you don’t factor a margin for them into your pricing, they will either not buy the book, or you will lose money on every transaction.

At Snowfall Press, a 200 page book costs $3.25 to print in our POD or print-to-order model. A book this size will generally sell for $14.99 or less in the general market. Retailers generally need 40-50% of this retail in order to sell your book. This means that off the top, you need to plan on grossing only $7.50 on this book – if you are selling directly to the retailer. If you have a distributor in the middle, you might have additional costs (their margin) to also factor in.

In my experience, POD books need to be priced four or five times the print cost, in order to carry the retail margins for your partners, and still be competitive in the market.

A final item to consider: all POD printers are not created equal. It can be confusing in this world of catch-all phrases like POD (print-on-demand). Here are a few questions to ask your printer.

  1. What are your upfront costs? Do you charge for opening an account? For loading files? For changes made to files? At Snowfall Press, the answer is $0.
  2. What is your minimum order quantity? At Snowfall, the answer is only one book.
  3. Do I have to sign any publishing or printing agreements? At Snowfall, we do not require either. You want to maintain total control of your project, and have the ability to move it to any other printer at any time.

What rules do you follow when you price a book?

Aug 30

A little more than a week ago, Seth Godin (one of my favorite bloggers and authors) wrote a post which has generated a lot of response from the publishing industry. In it, Godin basically said that he was leaving traditional publishing behind, and was going to concentrate on ‘spreading the message’ that he has traditionally published by getting closer to his readers.

sethgodin.com

It seems that on one hand, Godin might be saying that he will be taking everything to digital e-books and only those who can download them will have access. It will be interesting to see how this ‘getting closer to the reader’ will play out with Godin and others as they emulate what he is doing. Michael Hyatt, another blogger I follow (and CEO of Thomas Nelson) blogged about Godin’s announcement too. I tend to sit in the middle of the message from the two posts from Godin and Hyatt.

  1. The current publishing model is dying, if not broken as Seth Godin claims.
  2. E-books and digital delivery is growing rapidly, but probably not at the rate that all the hype seems to indicate.
  3. The paper book is not dead, but the distribution methods that paper gets to consumers will have to change.
  4. No one can live on bits and bytes alone. The strategy has got to include both e-books and traditional books. Even Godin fully admits that his readers like to use his books as ‘souvenirs’ and will undoubtedly continue to print books, whether in long runs to start or in digital short runs.
  5. Most authors SHOULD consider doing what Godin is doing. This is where I disagree with Hyatt. Publishers are struggling, willing to take less risk, and wanting to publish fewer titles. The tools exist for authors to do it themselves, connect with the readers like never before and earn more in the process. If there are more than a million books being published every year, the market is already crowded, and the percentage (and numbers) of traditionally published books is going to continue to shrink.

If you read Godin’s announcement when it first came out, or if you are just seeing this for the first time, what do you think?

Tagged with:
Jul 20

The hype, the craze, the hysteria… is all about e-books these days. Just think about it. I have heard numbers quoted recently that show 30% or more of some New York Times best-selling author’s books are being sold as e-books. I just heard a publisher last week say that they are selling more than $1 million in e-book sales a year, which makes it a ‘real business’ now.

The Barnes and Noble Nook

The International Digital Publishing Forum collects quarterly US trade retail e-book sales in the US, and shows a huge jump in sales (they are tracking wholesales) with Q1 2010 showing more than $90 million in e-book sales (see chart for more info) . In fact, their own disclaimer says that they believe that the overall market is probably double that number ($180 million)

In the meantime, we hear about the doom and gloom and demise of the printed book, which is meant to frighten publishers and printers alike. But should it? I submit that traditional printers, who are used to long runs, are going to continue to see their print runs shrink (they should be worried). Publishers are also going to see their titles shift toward e-book sales, with traditional printed inventories shrinking. This is actually very encouraging for companies who are in the digital printing space. When traditional runs get squeezed, the best option becomes digital.

I had the opportunity to talk to an industry insider last week who works for a large publishing company. He listened to the Snowfall Press model and commented that this was the future of the industry, and then went on to say that if he had money to invest, it would be with a company like Snowfall Press. The digital answer has got to be a seamless system that  brings files from the publisher (or author) to the press, printing a single book economically, and shipping the book directly to the end user (whether wholesaler, retailer or consumer) directly off press.

Interestingly, the device manufacturers are starting to duke it out and eliminate competition. This is the first sign that e-books are going to go main-stream. Price wars will force the price down so that the average consumer will be able to make the choice to move to e-books as an option. If Apple, however, gains a huge market share with the iPad, they have shown (through very innovative packaging, design, and features) that they will keep the prices high. (see http://industry.bnet.com/technology/10009583/dedicated-e-book-readers-feel-the-competitive-heat/ )

Apple's iPad

As Seth Godin puts it, printed books are becoming the souvenir that readers, followers, students want to keep on their shelves. I agree with Seth, and believe this will always be the case.

Since this topic is so hot right now, what do you believe will happen with e-books (and physical books) in the next five years?

Tagged with:
preload preload preload