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Running A Successful Small Press
By David Gecic Originally published in HereThere Magazine (2008)
It should be obvious that a small press is in fact a business and must be run as a business. Profit margins, book costs, commission structures, and many other factors must be looked at from a business standpoint. Real numbers must be considered. Although the act of creating literature is not a business procedure, the act of publishing literature is a business procedure. It has to do with creating, promoting, selling, and distributing a product.
As a small press owner and publisher, I know that it is necessary for publishers to understand their business. Unfortunately, many small presses fail. Why is this? Often times, the basics of business are often not even considered in the first place.
When I work with a poet whose book I am publishing, I give them a lecture on the business of selling books. I review things like: What is an ISBN? What percentage does Amazon take? What percentage does a bookstore take? Sometimes they ask, "Why do I need to know this?" A poet entering into a relationship with a publisher is entering into business with them, and should know something about business. A publisher should explain the business to the author in order to ensure that the partnership goes smoothly.
SMALL PRESS CUSTOMERS, SUPPLIERS, AND EMPLOYEESWho are a small press's customers? I have debated this question often. Obviously, anyone who buys a book from a small press is a customer. If someone buys a small press's books from a bookstore, they are the small press's customer in addition to being the store's customer. The same thing goes for Amazon customers. Anyone who buys a small press's book from Amazon is an Amazon customer and the small press's customer. Anyone who buys a book from an author is a customer, too. What about libraries, and the people who may check a book out of a library? The question of who customers are is actually a complicated question.
For publishers, the question of customers and who they are goes even deeper. For instance, you may not automatically think that the authors themselves are customers, but the truth is that if you are a small press—they are not only your customers, but your suppliers and employees.
You have to know who your customers are in order to sell to them, and to manage them.
THE RELATIONSHIP BETWEEN SMALL PRESS AND AUTHORA publisher has invested in an author's career, so to some degree, they must also manage the author's career. To not do so is to make a poor investment. If the relationship between an author and a publisher is not healthy, the publication, and the bottom line will suffer. Another thing to keep in mind is that an involved author is a great asset to a publisher, and can lead to a lot of sales for a publisher. In most cases, many books will be sold by an author during signings and readings. An author who actively seeks out book signings and bookselling opportunities will increase your press's chances of success.
One of the most important things a publisher does is act as a liaison for the author. Generally, a publisher gets more respect, and has more access to opportunities than an author does acting as an individual. It is much easier for a publisher to relate to bookstores, for example. A book is more likely to be reviewed if the request comes from a publisher. There are many contests that cannot be applied for except by the publisher. For example, the Great Lakes College Association Award and the National Book Award will only accept applications submitted by the publisher.
A publisher should have established methods for getting books out to the general public. This is the job of the publisher. A publisher must also have various advertising and marketing resources at their disposal.
ADVERTISING AND MARKETING YOUR SMALL PRESSLike any business, a small press must advertise. This does not necessarily mean that it has to pay for advertising. In fact, a press can become "advertising poor" if they pay for too much advertising that does not serve them well. Consider making trade agreements. The very best advertising/marketing investment I ever made cost me just a case of beer! I bought the case of beer for an artist in exchange for his painting services. He painted a big sign with my company logo on it. Now, if I am at a book sale, people may not buy my books, but they'll see my sign from a block away. There are many ways of getting inexpensive or free advertising. Email, for instance, is nearly free. Also, in many cities, there are plenty of open mic readings that you can go to in order to make announcements about your new publications.
In addition to knowing your customer, as a small press, you must know where to find your customer. An honest search for your potential customer will be most revealing. For instance, if you have on your hands a book about the ultimate doggie diet for young pit-bulls, is it likely that you are going to find the bulk of your potential customers at your local Borders? You would probably be better off by making an effort to market the book at pet shops, dog clubs, or dog shows.
YOUR BUSINESS PLANAlthough a small press is a business, a traditional business plan does not apply well to a small press. Rather than allocating a budget for different activities, the real resource which is must be allocated is time. Time must be allocated for various business activities, including: recordkeeping and accounting (or paying bills and billing), shipping, business analysis, and even research and development. A small press cannot be simply produce books or read manuscripts. Ignoring the business activities of your small press will incite certain doom.
The situation is slightly different for a not-for-profit press, but even a non-profit press is still a not-for-profit business—usually, a corporation. By-laws must be written and followed. Yearly reports must be filed. A large not-for-profit will have a board that may be heavily involved with the entire operation. Grant money must be found and accounted for.
There is the rare book that people break down doors to buy. This breaking down of doors is usually the result of a careful marketing plan or viral hype. That said, to assume that you have one of these rare books, and that it will be magically noticed, is generally an unreasonable assumption.
There are several different types of business models or practices for small presses. A publisher usually manages the money, usually owns the books, and is usually responsible for sales. If you don't have a solid business model, the definition of your small press's responsibilities can get fuzzy, and lead to fuzzier results.
I heard a statistic that indicates that the average life for a publishing venture is two years. A little business planning prior to entry into business can easily improve a small press's chances of not being included in such a statistic.
SUBSIDY PUBLISHERSA subsidy publisher takes money from an author in order to fund or partially fund the publication of a book. Many well-known books such as Alan Ginsberg's Howl, were subsidy publications.
In addition, there are many small presses out there that require an author to obtain grant money in order to be published. This is another type of subsidy publishing.
I have subsidy published before. Under certain conditions, it can be a favorable arrangement for both the publisher and the author. However, because the ownership of the books can come into question, and because of the financial risks usually associated with subsidy publishing, problems can, and often do, frequently arise. These problems may not be evident until years later, when the situation of the writer or publisher changes. If you decide to become a subsidy publisher, you should first think about how subsidy publishing will benefit you in the long run.
I remember one poet who paid for the cost of publishing his book. Very few of the books sold from the publisher's end, and the publisher went out of business. The publisher informed the poet that if he wanted his books, he had only a few days to arrange the shipment of them from a warehouse, or they would be destroyed. Not only did the author have to pay for his books, but he had to pay for the shipping. On top of these aggravations, he had to deal with the fact that he no longer had the publisher as a resource.
But subsidy publishing can be a great tool for both the author and the publisher if it is used wisely. There are many books which would never have been made without subsidy publishing. Subsidy publishing allows a publisher to take a risk by accepting a book they may not have taken on had they been another type of publisher. Also, subsidy publishing can allow an author to have more control over their book. It can allow for the book to have a higher advertising budget, or special features, like manufacturing with higher quality materials.
Again, on the negative side, subsidy publishing from the publisher's standpoint can decrease his flexibility. Can the publisher give away samples? How many can go to reviewers? What about damaged copies, or copies sold at a discount? Does the publisher charge for his time? Royalties and commissions are always complicated with subsidy publishing.
VANITY PUBLISHERSA vanity publisher is a publisher who packages a book for an author. They put the book together according to the specifications of the author. A true vanity publisher provides no other resources for the author. It is a simple in-and-out business, and does not require lasting relationships with authors or book buyers.
An author might do most of the design, typesetting, and other work themselves. The author lines up a printer or a binder on their own, and then markets the books themselves. In this scenario, authors are essentially taking over the functions of the publisher and acting as self-publishers. There are very successful self-published books out there, but in general, successful self-published books usually have some unique factor that has allowed them to achieve success. For every self-publishing success story, there are thousands of failed ones. Careful research must be done in order for someone to really understand the self-publishing process. Some successful self-published books are The Celestine Prophecies, by James Redfield, The Christmas Box, by Richard Paul Evans, Winning Through Intimidation, by Robert Ringer, and Leaves of Grass, by Walt Whitman.
A SUMMARY OF PROFITSA publisher must know a book's profitability when it is sold through different methods. Below is a quick summary of profits through several different methods.
AmazonAmazon requires a 55% discount off of the cover price, plus shipping costs, billed to the publisher. They ask for priority shipping. Basically, a $10.00 book will sell for $10.00 - 55% = 4.50 - 3.95 shipping = 55 cents gross profit. If you sell more than one book, you can make a little more. A book campaign based primarily on Amazon sales will fail due to low profitability.
Amazon Marketplace can sometimes be used to boost profits. The Amazon system can sometimes be manipulated so that a book is listed without being sold through Amazon directly. After a book is listed on Amazon by normal processes, the publisher lists it through Amazon Marketplace as a collectable. It can be listed as signed by the author. This will cost a 15% discount plus 99 cents. Basically, $10.00 - 15% - 0.99 = $7.51. Plus, you can make $1.00 from the shipping charge, or $8.51 per book.
Borders and Barnes & NobleBorders and Barnes & Noble, and some other large bookstores, occasionally buy books directly from the publisher, but they usually require books to be purchased through Baker and Taylor.
Baker and Taylor is a book wholesaler. A book wholesaler provides warehousing for books, but offers no promotional activities. They will not sell a book; they simply fulfill orders. Baker and Taylor requires a 55% discount, but they accept collect shipments. Basically, $10.00 - 55% = 4.50 - 0.00 shipping = $4.50 gross profit. Unfortunately, they can take up to six months to pay.
Independent BookstoresIndependent bookstores traditionally receive a 40% discount. This is also the usual discount for those rare direct sales to larger chain bookstores. Basically $10.00 - 40% = $6.00 profit. However, each of these bookstores is an independent entity, so you should keep in mind that there will most likely be other variables.
PayPalInternet sales through a service such as PayPal can vary in terms of fees. A $10.00 book will require about 70 cents in fees, or: $10.00 - 0.70 = $9.30 in profit.
Direct SalesDirect sales to the public made during events usually do not require that a commission be paid to another entity. A $10.00 book could result in a $10.00 profit.
Direct sales to the public completed via mail order do not require a commission. A $10.00 book has a $10.00 profit, excepting mailing costs.
SUCCESS AND THE SMALL PRESSSuccess, of course, means different things to different publishers. For example, I am involved with a small not-for-profit that publishes a yearly teen anthology. We are happy when we simply get enough good submissions to produce an anthology! Getting a lot of good submissions, to us, means success.
If a small press exists for some other reason than to publish books, achieving success may be a different animal altogether. If, for example, the real reason for a press's existence is to promote the use of grey-water agricultural techniques in Midwestern farm communities, they will probably measure their success by the increasing use of these techniques. It is typically better for such presses to be run as not-for-profits.
Not all small presses are run as businesses. Some of them are run as a hobby, or even as an experiment. A small press run as an experiment may produce a successful or unsuccessful result. If the original goal of a press was to try something new—no matter what, it will be a success, in that sense. You have to decide for yourself what kind of small press it is that you want to run, and what success means to you.