Economics of self-publishing

A publishing revolution has begun, powered by publish-on-demand (POD) hardware like the Xerox DocuTech and similar industrial-strength laser printer/binders. With these devices, the publisher's "stock" is an electronic image of the book on a disk in a PC. When an order comes in, it is practical and economical to print one copy of a book, bind it in a color cover, and ship it.

A flock of new publishers has arisen to apply the new economics of POD printing. The best, like Trafford, perform many of the same tasks as old-line publishers. They do the clerical jobs of assigning an ISBN and recording the title in Books in Print. They keep the book on file as an electronic image. They perform order fulfillment, printing and shipping copies as orders arrive. They accept orders from bookstores, from Ingram (the Godzilla of retail distribution) and Baker & Taylor (the King Kong of library and academic distribution), and from Amazon, B&N, and other online retailers. (At the Amazon advanced-search page, do a search for Publisher "Trafford" to see.)

But the new publishers have a different business model from the old ones. They don't front any costs; they charge the author a setup fee to cover their clerical work and to amortize their expensive POD machine. And they don't print anything until there's a paid order in hand for it. Then they retain their costs and a small commission, returning the remainder of the gross to the author.

On a $21.95 book, a conventional publisher pays the author 15% of the publisher's receipts, which are typically 45% to 65% of the cover price. Hence conventional royalty runs around $1.60 per copy, give or take a quarter. The better POD publishers keep a considerably smaller share of the gross, so the self-published author earns as much as $3.50 per copy in some sales.

What's the downside? Well, the self-published author has to do all the promotion and marketing of the book. Oh, wait...