7 ms·

How Authors Really Make Money: The Rebirth of Seth Godin

84 points by alexkiwi 16y ago

allwein 16y ago
This all ties in with a blog that I just started reading yesterday. It's written by a genre fiction writer that has also made the switch to predominantly ebooks. I guess the most relevant post is http://jakonrath.blogspot.com/2010/08/beginning-of-end.html http://jakonrath.blogspot.com/2010/08/beginning-of-end.html but the whole blog is really interesting and worth reading. http://jakonrath.blogspot.com/ http://jakonrath.blogspot.com/
bjonathan 16y ago
"If you choose to go digital only as an e-book, this is where profit rules and amazing numbers can be achieved. How amazing? I know one man who nets between $5,000,000 and $10,000,000 per month with a single e-book and affiliate cross-selling to his customer lists. I’m not kidding." Any idea of what ebook is he talking about?
- deleted 16y ago
  [deleted]
  - deleted 16y ago
    [deleted]
- patio11 16y ago
  There is a lot of money in "Internet marketing"/"Make Money Online", mostly in taking rubes to the cleaners. Affiliate CPAs reach into the several hundred dollar range (sell someone someone else's $500 course guaranteed to make you into the next parrot ebook king, take 75% commission). At the risk of stating the obvious, returns followed a zipf distribution (the overwhelming majority make nothing, a few make small amounts, some smaller number do about what I'm doing with BCC, and a few make huge businesses out of it). This is far from the only seedy sector which is awash in greenbacks, incidentally.
- vaksel 16y ago
  none it's bullshit...that's $60-$120 million profit a year from a single book. These numbers just don't exist. If most of his sales are from affiliates, who typically get 75% per sale...that means the book would need to sell close to $200 million. If the book costs $1,000, that's 200,000 sales. If the book costs $500 that's 400,000 sales If the book costs $250 that's 800,000 sales If the book costs $125 that's 1,600,000 sales. If the book costs $50 that's 4,000,000 sales Then you need to take into account conversion rates. If the book sells at 1:200(average more or less)... @$1000 that's 40 million uniques a year @$500 that's 80 million uniques a year @$250 that's 160 million uniques per year @$125 that's 320 million uniques per year @$50 that's 800 million uniques per year And as far as I know the #1 site in the world is Facebook, not makemoniezonline.com
  - patio11 16y ago
    Think less like a technically savvy HN reader who does not pay for content online, and more like an info marketing huckster who has an email list of 50,000 people who have bought a similar product in the last six months.
    - ramit 16y ago
      Let's be careful here. Patrick, you and I both know how the conversion models in this area work, and while the info-marketing world is filled with scammy sleazebags, there are also some very credible ones. For example, I sell information products as well as a New York Times best-selling book. My students do very well, whether it's learning how to automate their finances or earn more via freelancing. If they don't, they request a refund and I eat any costs of my online products. Virtually every info-marketer offers generous guarantees and has to live up to their product's hype...or they go out of business. This is an extremely competitive area. Vaksel, let me also offer some feedback on your numbers. You're analyzing them without knowing how the field works, and frankly every Web2.0 company could learn a LOT from studying the direct-response field. Want to know how to increase your AOV by 200% or 300%? How about finding undiscovered 6-figure revenue sources in your business (like I did 2 months ago)? Why not look to the people who have been doing this for decades? You assume that most of the money is made from the sale of the ebook itself. That's not correct. Most of the revenue is actually made from the "back end," or other products that are either cross-sold, upsold, or repeatedly sold. Every direct marketer knows that you profit more from having a dedicated group of customers who buys from you time after time...which is why the very best ones take INSANE care of their customers. I'll speak for myself, but I continue to send lots of free material to both my free users and my customers. I email them free stuff. I call them. I write them hand-written cards (seriously). As a result, on the rare occasion when I sell something, I can sell it for premium prices (often 100x more than my competitors charge for their products) and people happily pay it because they trust me and they know it's the best. Here's another example. I know an info marketer who pays a 200% commission for any affiliate who sells his book. So if you sell his $27 ebook, you get $54. How does he afford that? Because he's systematically built a funnel that offers his customers more products that they want and are willing to pay for, making it a simple no-brainer customer-acquisition cost -- even at 200%. A skilled direct-response marketer could take a $27 ebook and turn it into $500 of LTV...and the customer would be DELIGHTED to pay it if the material is of outstanding quality. IMHO, a lot of Web2.0 companies should stop poo-poohing marketing and learn how it really works. Virtually every Web2.0 company should be doing upsells, cross-sells, and partnerships...and as a guy who co-founded a venture-backed startup and know a lot of other startup CEOs/marketers, I know that very, very few do. I've put together several bookmarks that might be interesting: * http://delicious.com/ramitsethi/emarketing http://delicious.com/ramitsethi/emarketing (direct-response stuff) * http://delicious.com/ramitsethi/marketing http://delicious.com/ramitsethi/marketing (general marketing) * http://delicious.com/ramitsethi/monetization http://delicious.com/ramitsethi/monetization Hope this helps.
- wallflower 16y ago
  Remember the Parrot e-Book? Think bigger, more targeted audience (people who really want the edge on making money online vs devoted parrot owners) "Cringely: Making 400k/yr profit on an eBook about parrots" http://news.ycombinator.com/item?id=516215 http://news.ycombinator.com/item?id=516215
kmfrk 16y ago
I didn't find the post to be very useful, but this part is worth the read: >I believe (conjecture, yes) that the figure we are missing is Books-Per-Person. >If you have a Kindle, as I do, how many books did you buy in the first week or two? How many unread books do you have on your Kindle? Unlike with print books, you don’t have to look at a stack of unread material like undone homework. Ergo, you purchase more digital books than you would ever purchase in print. If Amazon is selling 180 Kindle books for every 100 print books, I wouldn’t be surprised if 10-20 people are responsible for the former, whereas 80-100 people are responsible for the latter. This reflects that Kindle owners are buying more books per capita, not that paper purchasers are buying fewer.
patio11 16y ago
I want to hate Tim Ferris for his persona and frequent exaggerations of the truth, but grits teeth he writes good stuff sometimes.
- lionhearted 16y ago
  Used to think the same way - now I've got two modes when I'm reading a successful author. Either (1) absorbing his good information, or (2) trying to figure out how the bad stuff could be marketed so well. (2) is more meta-learning, but I start asking questions like, "Who does this appeal to? Why is this worded/marketed like this?" Etc. Sometimes I learn more from bad information, because it forces me to reconsider the level of complexity writing should be if you want to sell in volume (very, very low - dumb it down 10x... okay, now make it dumber) and things of that nature.
cstross 16y ago
IIRC the Gini coefficient among authors in the UK is something like 0.7. The income stratification is insane. Tim Ferris's figures match my experience. What he doesn't make explicit is that "publishing" is about fourteen different vertically integrated businesses flying in loose formation -- genre fiction publishing, for example (my stomping ground) is utterly different from business publishing or academic publishing, although the products are sometimes sold via the same retail channels -- and the prospects for a successful career vary drastically between fields. Nor does success in one field imply a track record transferable sideways into another publishing field. I'd also pick a nit: in my experience, ebook sales (and Amazon Kindle store sales in particular) are dwarfed by hardcover sales -- by a 50:1 ratio, in fact. Amazon are almost certainly cherry-picking if they can come up with books where Kindle sales outstrip hardcover. However, that's looking backwards -- it's fairly clear that ebooks are a rapidly growing sector and in another 2-5 years they'll definitively overtake hardcover sales by volume, if not by revenue. (Hardcovers net roughly $16 after discount, of which 10-15% goes to the author; Kindle store books net $7-10, of which Amazon takes a 30% cut before 5-10% of the remainder goes to the author.)
- unwind 16y ago
  On the happy (and perhaps naive, this being the Internet and all) assumption that you are a certain writer of awesomeness, hailing from Scotland, here's a very topical question: how about co-launching a book both in hardcover and trade paperback, at the same (high) pricepoint? For me personally, I don't want books in hardcover, ever. I always hold out for the trade paperback. It's quite annoying that, from the authors' point of view, my preference works out to me being a cheapskate who gives them less royalty. But I just don't want hardcovers, they're not at all attractive. There's been many occasions when I've been at my SF book store of choice, realizing some author I like has released a new book, and then my next thought is "okay, so in 3-6 months or whatever I can get this". :| I guess I could move to e-books, if the price/royalty/release date data is better there, but I really like physical pocket books, still.
  - cstross 16y ago
    how about co-launching a book both in hardcover and trade paperback, at the same (high) pricepoint? Alas, that's not how publishing works; I create and sell the IP that goes between the covers, but how those covers are put together and marketed isn't my department (and I have no control over it). One point to note is that commercial fiction publishing runs on a reverse-auction basis: prices start high, then drop. Hardcovers (perceived as high value items) come out first, then are superseded by successively cheaper/smaller paperback editions after early-adopter demand is saturated by the high priced product. Unfortunately the pricing model is conflated with the physical product's format, and with the distribution channel (trade vs. mass market), which muddies the water enormously. (I'd love to do an ebook edition that launched at, say, $20, then dropped in price by 5% per month until hitting a floor of $4. It'd be interesting to graph sales against time ... but unfortunately the accounting procedures in place in the publishing business, and locked in via contract, seem to make this impossible without either (a) self-publishing or (b) protracted negotiations with a legal department that are not dissimilar to kicking a dead sperm whale up a beach. In high summer.)
mark_l_watson 16y ago
Good article! Don't skip the video. I have written several books, and only a few have sold well, so I have to admit that my net worth would be more if I had spent my writing time doing working (software development). However, echoing the article: 1. writing books gives an author access to very interesting people and experiences 2. writing has a long tail of benefits that often come in the form of interesting work and offers for collaboration
mattmaroon 16y ago
He's wrong about paperback, they're a gold mine for authors. Halving the price doesn't multiply the number of purchases by 2, it multiplies it by 20. That's why ebooks outsell hardcovers on Amazon but are still a trivial fraction of overall rev. Also, it is not any more work for the author. You usually don't even have to sign any additional paperwork. It's extra work for the publisher to be sure, but it's all gravy for you.
Emore 16y ago
As much as I enjoyed the article, the title is simply too SEO for my stomach. "Money"? Check. Famous guy's name? Check. At least 10 words? Check. I miss the long-gone days of clever, concise and original titles for stuff.
petercooper 16y ago
For anyone interested in a "programming book" specific perspective: http://beginningruby.org/what-ive-earned-and-learned/ http://beginningruby.org/what-ive-earned-and-learned/

84 points by alexkiwi 16y ago

This all ties in with a blog that I just started reading yesterday. It's written by a genre fiction writer that has also made the switch to predominantly ebooks. I guess the most relevant post is http://jakonrath.blogspot.com/2010/08/beginning-of-end.html http://jakonrath.blogspot.com/2010/08/beginning-of-end.html but the whole blog is really interesting and worth reading. http://jakonrath.blogspot.com/ http://jakonrath.blogspot.com/

bjonathan 16y ago

"If you choose to go digital only as an e-book, this is where profit rules and amazing numbers can be achieved. How amazing? I know one man who nets between $5,000,000 and $10,000,000 per month with a single e-book and affiliate cross-selling to his customer lists. I’m not kidding." Any idea of what ebook is he talking about?

deleted 16y ago
[deleted]
- deleted 16y ago
  [deleted]
patio11 16y ago
There is a lot of money in "Internet marketing"/"Make Money Online", mostly in taking rubes to the cleaners. Affiliate CPAs reach into the several hundred dollar range (sell someone someone else's $500 course guaranteed to make you into the next parrot ebook king, take 75% commission). At the risk of stating the obvious, returns followed a zipf distribution (the overwhelming majority make nothing, a few make small amounts, some smaller number do about what I'm doing with BCC, and a few make huge businesses out of it). This is far from the only seedy sector which is awash in greenbacks, incidentally.
vaksel 16y ago
none it's bullshit...that's $60-$120 million profit a year from a single book. These numbers just don't exist. If most of his sales are from affiliates, who typically get 75% per sale...that means the book would need to sell close to $200 million. If the book costs $1,000, that's 200,000 sales. If the book costs $500 that's 400,000 sales If the book costs $250 that's 800,000 sales If the book costs $125 that's 1,600,000 sales. If the book costs $50 that's 4,000,000 sales Then you need to take into account conversion rates. If the book sells at 1:200(average more or less)... @$1000 that's 40 million uniques a year @$500 that's 80 million uniques a year @$250 that's 160 million uniques per year @$125 that's 320 million uniques per year @$50 that's 800 million uniques per year And as far as I know the #1 site in the world is Facebook, not makemoniezonline.com
- patio11 16y ago
  Think less like a technically savvy HN reader who does not pay for content online, and more like an info marketing huckster who has an email list of 50,000 people who have bought a similar product in the last six months.
  - ramit 16y ago
    Let's be careful here. Patrick, you and I both know how the conversion models in this area work, and while the info-marketing world is filled with scammy sleazebags, there are also some very credible ones. For example, I sell information products as well as a New York Times best-selling book. My students do very well, whether it's learning how to automate their finances or earn more via freelancing. If they don't, they request a refund and I eat any costs of my online products. Virtually every info-marketer offers generous guarantees and has to live up to their product's hype...or they go out of business. This is an extremely competitive area. Vaksel, let me also offer some feedback on your numbers. You're analyzing them without knowing how the field works, and frankly every Web2.0 company could learn a LOT from studying the direct-response field. Want to know how to increase your AOV by 200% or 300%? How about finding undiscovered 6-figure revenue sources in your business (like I did 2 months ago)? Why not look to the people who have been doing this for decades? You assume that most of the money is made from the sale of the ebook itself. That's not correct. Most of the revenue is actually made from the "back end," or other products that are either cross-sold, upsold, or repeatedly sold. Every direct marketer knows that you profit more from having a dedicated group of customers who buys from you time after time...which is why the very best ones take INSANE care of their customers. I'll speak for myself, but I continue to send lots of free material to both my free users and my customers. I email them free stuff. I call them. I write them hand-written cards (seriously). As a result, on the rare occasion when I sell something, I can sell it for premium prices (often 100x more than my competitors charge for their products) and people happily pay it because they trust me and they know it's the best. Here's another example. I know an info marketer who pays a 200% commission for any affiliate who sells his book. So if you sell his $27 ebook, you get $54. How does he afford that? Because he's systematically built a funnel that offers his customers more products that they want and are willing to pay for, making it a simple no-brainer customer-acquisition cost -- even at 200%. A skilled direct-response marketer could take a $27 ebook and turn it into $500 of LTV...and the customer would be DELIGHTED to pay it if the material is of outstanding quality. IMHO, a lot of Web2.0 companies should stop poo-poohing marketing and learn how it really works. Virtually every Web2.0 company should be doing upsells, cross-sells, and partnerships...and as a guy who co-founded a venture-backed startup and know a lot of other startup CEOs/marketers, I know that very, very few do. I've put together several bookmarks that might be interesting: * http://delicious.com/ramitsethi/emarketing http://delicious.com/ramitsethi/emarketing (direct-response stuff) * http://delicious.com/ramitsethi/marketing http://delicious.com/ramitsethi/marketing (general marketing) * http://delicious.com/ramitsethi/monetization http://delicious.com/ramitsethi/monetization Hope this helps.
wallflower 16y ago
Remember the Parrot e-Book? Think bigger, more targeted audience (people who really want the edge on making money online vs devoted parrot owners) "Cringely: Making 400k/yr profit on an eBook about parrots" http://news.ycombinator.com/item?id=516215 http://news.ycombinator.com/item?id=516215

kmfrk 16y ago

I didn't find the post to be very useful, but this part is worth the read: >I believe (conjecture, yes) that the figure we are missing is Books-Per-Person. >If you have a Kindle, as I do, how many books did you buy in the first week or two? How many unread books do you have on your Kindle? Unlike with print books, you don’t have to look at a stack of unread material like undone homework. Ergo, you purchase more digital books than you would ever purchase in print. If Amazon is selling 180 Kindle books for every 100 print books, I wouldn’t be surprised if 10-20 people are responsible for the former, whereas 80-100 people are responsible for the latter. This reflects that Kindle owners are buying more books per capita, not that paper purchasers are buying fewer.

patio11 16y ago

I want to hate Tim Ferris for his persona and frequent exaggerations of the truth, but grits teeth he writes good stuff sometimes.

lionhearted 16y ago
Used to think the same way - now I've got two modes when I'm reading a successful author. Either (1) absorbing his good information, or (2) trying to figure out how the bad stuff could be marketed so well. (2) is more meta-learning, but I start asking questions like, "Who does this appeal to? Why is this worded/marketed like this?" Etc. Sometimes I learn more from bad information, because it forces me to reconsider the level of complexity writing should be if you want to sell in volume (very, very low - dumb it down 10x... okay, now make it dumber) and things of that nature.

cstross 16y ago

IIRC the Gini coefficient among authors in the UK is something like 0.7. The income stratification is insane. Tim Ferris's figures match my experience. What he doesn't make explicit is that "publishing" is about fourteen different vertically integrated businesses flying in loose formation -- genre fiction publishing, for example (my stomping ground) is utterly different from business publishing or academic publishing, although the products are sometimes sold via the same retail channels -- and the prospects for a successful career vary drastically between fields. Nor does success in one field imply a track record transferable sideways into another publishing field. I'd also pick a nit: in my experience, ebook sales (and Amazon Kindle store sales in particular) are dwarfed by hardcover sales -- by a 50:1 ratio, in fact. Amazon are almost certainly cherry-picking if they can come up with books where Kindle sales outstrip hardcover. However, that's looking backwards -- it's fairly clear that ebooks are a rapidly growing sector and in another 2-5 years they'll definitively overtake hardcover sales by volume, if not by revenue. (Hardcovers net roughly $16 after discount, of which 10-15% goes to the author; Kindle store books net $7-10, of which Amazon takes a 30% cut before 5-10% of the remainder goes to the author.)

unwind 16y ago
On the happy (and perhaps naive, this being the Internet and all) assumption that you are a certain writer of awesomeness, hailing from Scotland, here's a very topical question: how about co-launching a book both in hardcover and trade paperback, at the same (high) pricepoint? For me personally, I don't want books in hardcover, ever. I always hold out for the trade paperback. It's quite annoying that, from the authors' point of view, my preference works out to me being a cheapskate who gives them less royalty. But I just don't want hardcovers, they're not at all attractive. There's been many occasions when I've been at my SF book store of choice, realizing some author I like has released a new book, and then my next thought is "okay, so in 3-6 months or whatever I can get this". :| I guess I could move to e-books, if the price/royalty/release date data is better there, but I really like physical pocket books, still.
- cstross 16y ago
  how about co-launching a book both in hardcover and trade paperback, at the same (high) pricepoint? Alas, that's not how publishing works; I create and sell the IP that goes between the covers, but how those covers are put together and marketed isn't my department (and I have no control over it). One point to note is that commercial fiction publishing runs on a reverse-auction basis: prices start high, then drop. Hardcovers (perceived as high value items) come out first, then are superseded by successively cheaper/smaller paperback editions after early-adopter demand is saturated by the high priced product. Unfortunately the pricing model is conflated with the physical product's format, and with the distribution channel (trade vs. mass market), which muddies the water enormously. (I'd love to do an ebook edition that launched at, say, $20, then dropped in price by 5% per month until hitting a floor of $4. It'd be interesting to graph sales against time ... but unfortunately the accounting procedures in place in the publishing business, and locked in via contract, seem to make this impossible without either (a) self-publishing or (b) protracted negotiations with a legal department that are not dissimilar to kicking a dead sperm whale up a beach. In high summer.)

mark_l_watson 16y ago

Good article! Don't skip the video. I have written several books, and only a few have sold well, so I have to admit that my net worth would be more if I had spent my writing time doing working (software development). However, echoing the article: 1. writing books gives an author access to very interesting people and experiences 2. writing has a long tail of benefits that often come in the form of interesting work and offers for collaboration

mattmaroon 16y ago

He's wrong about paperback, they're a gold mine for authors. Halving the price doesn't multiply the number of purchases by 2, it multiplies it by 20. That's why ebooks outsell hardcovers on Amazon but are still a trivial fraction of overall rev. Also, it is not any more work for the author. You usually don't even have to sign any additional paperwork. It's extra work for the publisher to be sure, but it's all gravy for you.

Emore 16y ago

As much as I enjoyed the article, the title is simply too SEO for my stomach. "Money"? Check. Famous guy's name? Check. At least 10 words? Check. I miss the long-gone days of clever, concise and original titles for stuff.

petercooper 16y ago

For anyone interested in a "programming book" specific perspective: http://beginningruby.org/what-ive-earned-and-learned/ http://beginningruby.org/what-ive-earned-and-learned/