Sunday, July 27, 2014

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Sandal Press' KS Augustin Presents: Building An SFR Small Press

[Heather's note: I saw KS Augustin's store recently and was so intrigued by it that I invited her aboard to blog about her latest venture. It occurred to me an SFR micro-press is yet another way authors of SFR can increase visibility for their books and experiment with niche genre marketing techniques. This post is geared toward indie/hybrid authors, so readers or traditionally published SFR authors may want to give this one a pass, in which case... Bye! Have fun storming the space station!]

Building An SFR Small Press by KS Augustin

If we want our genre to thrive, then I think it's important for SFR authors to embrace the business side of things, in addition to the art and craft.

Okay, so we're all here. The independent writers and publishers of SFR. We're smart, savvy and we all like to be in control. If we didn't, we wouldn't be independent, right? Here goes.

If we look at the internet retail landscape as analogous to the meat retail landscape, we can imagine places like Amazon, Kobo, Google Play, and B&N as being the mega-malls. Our little enterprise can be compared to a small shop. The mega-mall will let us set up shop in their premises but, in return, will have certain rules we have to obey and will charge us a fee to cover their expenses. Assuming we produce quality goods, our success in our little shop depends on our own marketing but also on how efficiently the mega-mall drives traffic to themselves. That's all well and good but the downside is that, because we're a small player with little clout, when the mega-mall owners decide to make certain decisions or change their policies, we have to either put up with it, or get out.

(For my operation, Sandal Press, this bites most often in the area of DRM. No matter my stated preferences, there's really nothing stopping an etailer from slapping DRM on a Sandal Press title that they sell. Short of pulling out of that etailer completely, or spending months trying to sort out a solution via Customer Support (this I have done) there are few other options.)

Then we get the Ikea stores. In the internet publishing space, this is like HarperCollins, who has recently made the decision sell e- and p-books directly to readers. It's going to be interesting to see how this plays out but HarperCollins has an advantage over Sandal Press because they have mass. Hundreds of authors. Thousands of books. Sandal isn't even in the same state, much less ballpark!

Speaking as a small business owner, what is My SFR Small Press to do if it wants control over its products on an end-to-end basis, just like HarperCollins does? (That is, from creation to the final act of selling the finished product to the consumer.) Yes, I hear you. You're saying, sell direct. But sell direct on your website? How many people regularly visit your website? Is it enough to form a reliable customer base?

Because I occupy a rather small, dark corner of the internetz, I know my answers to the above questions are: Maybe, not many, and probably not. We can't expect the readers to come to us. We must go to them. And, in order to make direct selling work, we must offer transactions that are as frictionless as possible (i.e. painless to the customer).

So what's available in the direct selling space? Let's say, on average, we sell ten copies of our books per month to ten customers at five dollars apiece (revenue per month = $50). How do popular options stack up?

Limited Run. I like these guys. I corresponded with them back when they first started and they were responsive and clear in their answers. Sandal Press has set up an eshop with them. They charge $10 per month for listing up to 25 products and charge 1.5 cents per 10MB download. (The 25 cent fee they mention appears to be used for ticket sales only.) Using our example, that adds up to a profit of $39.98 per month ($50 - $10 – (10 x $0.015)) or 79.9% of total revenue. You can have your own storefront, choose from a number of different styles and tweak to your heart's content. They also have options for discounts, bundle discounts, preorders, and so on, that are included in the price. They handle the payment processing and pay via Paypal or Stripe. If you like, you can let your shop revenue “pay off” the monthly fee or you can pay it via credit card on a schedule.

Yearly cost = $120 + 1.5 cents per transaction

Gumroad. Gumroad has a nice line of patter. If you read through their site and guide, they'll make you feel like you owe it to readers to make your products available to them. You are just awesome, why aren't you selling Right. This. Second? Their fee structure is lower than Limited Run and there's no limit on how many products you list with them. Using our example, you'd make $45 per month with Gumroad, which is 90% of total revenue. They handle the payment processing and pay via Paypal every two weeks. There's a catch. There's no storefront, although you can use their “modal” feature to integrate the Gumroad purchase experience within your website if you wish.

Gumroad was essentially designed for you to handsell via social media. Every product you sell with Gumroad has its own individual page and you direct readers to that particular page. It's difficult, if not impossible, for readers to browse through your offerings the way they can with Limited Run, if you decide not to use their modal feature. Each product is a capsule and it's up to you to sell the by one.

On the downside, the people behind Gumroad seem like a very nervous lot. They want to make money but they don't want to offend anyone doing it. Even though my books are accepted and sold by the most conservative and prudish etailer in the internet galaxy (Apple), I'm still not sure if Gumroad will approve of my romances because some of them contain “adult” scenes. Their policies seem arbitrary. I'm with them and seeing how it goes, but I'm not going modal as it wouldn't surprise me if I get a suspension letter in the future, at which point I'll start a dialogue on growing a spine and see how I go from there. I'll probably get kicked off. Not recommended for erotic SFR writers till others of us have had time to test them out but otherwise a solid option. I've read that their Customer Service is lightning fast.

Yearly cost = $0 + (5% + 25 cents) per transaction

Etsy. Yes, you can sell your ebooks on Etsy! To me, Etsy is the “farmer's market” of internet shopping. It's not a get-everything-here mega-mall, but more a specialist grouping. As long as you make it, you can sell it.

Etsy is glorious, full-colour, in-your-face. Ettsy takes 20 cents per item per 4-month or till-sold listing plus a 3.5% fee and, depending on where you are, you can have proceeds deposited into your bank account, or get paid via Paypal, cheque or money order. (Srsly? Money order? Oh well.) From our example, that nets you $46.25, or 92.5% total revenue. That's the good news.

Here's the bad. In order to get your site into any kind of coherent order, you'll need to run apps. And apps, my friends, cost money. Monthly money. Figure $20-27 per month to get anything as coherent as Limited Run gives you for $10. Want a catalogue? Pay. Want to know where your customers are located? Pay. Schedule tweets? Pay. And it's all a bit underhanded. Very very few of the app makers will tell you upfront how much they charge. First, you have to initialise the app as a “free trial” and then you're told you should “Upgrade”. It's only when you press the upgrade button that you're given the bottom line. I don't like passive-aggressive people and I don't like passive-aggressive sites, so Etsy is out for me. Ymmv.

Yearly cost = Minimum $1.20 listing fee/item + 3.5% transaction fee + $240+ for apps

E-junkie. This is an established and affordable option that puts the “Add to Cart” buttons on your own website. All order processing is handled by E-Junkie and costs are very reasonable.

For ten products, you pay $5/month, for 20 you pay $8-10/month. That's it. There are no other charges, except for what the payment processor charges. Yes, welcome once again to the small print. You can create per-product or per-order discounts, bundle products, and so on. The download storage space you're given is more than adequate for most ebooks (novels).

So, back to our example, we'll clear $43.25 maximum ($5/month plus, say, 3.5% transaction fee) from Paypal (86.5% profit) but only $37.75 (or 75.5%) from 2Checkout (who charge 5.5% + 45 cents per transaction). My main problem with E-junkie is that it's essentially offering the same service as (Gumroad + modal feature) for a lot more money. I have a feeling it will appeal to “older folk” who want to feel like they're really wrestling with something and not just looking at big images and wide expanses of flat icons scattered about the page but, really, that's just my personal opinion.

Yearly cost = $96 + (3.5% to (5.5% plus 45 cents)) per transaction

Ebay. You can set up a store on Ebay, but you don't have to start out that way. Because our example has sales of less than fifty items per month, Ebay recommends selling through standard listings. They take a 10% fee. That's the large print. Here's the small print from their Fee calculator. One book (Books > Fiction & Literature) selling at a fixed price of $5.00 will cost 50 cents to list. Add international site visibility and the listing fee jumps to $1.00. Okay, forget internationally. How about making it look more prominent? A Value Pack (Gallery Plus, Listing Designer and Subtitle) will set you back $1.15. You want your listing to be in Bold? $2.50. Bold + Value Pack? $3.15. Bold + Value Pack + International? $3.65 Very soon, you're looking at traditional publishing royalty rates in your pocket! Yikes! If you go the cheapest option, our example nets you $45.00 per month, or 90% total revenue. Once you start adding extras, however, that gets chopped away very easily. Even having nothing but a Bold listing will reduce your profit to 50%, so be careful.

Yearly cost = Minimum 10% transaction fee per item sold

My very own SFR Small Press shop. That's the dream, right? If you want to go this route, you'll have to spend some money up front. No way around it. You can go for eCommerce, a free WordPress plugin that enables you to sell online, but you have to do the integration with your existing site yourself.

A place like Woo Themes has e-commerce themes ready to roll but they cost around $79. If you like Woo but can't afford $79, they have occasional sales. Woo also has their own free e-commerce plugin, called WooCommerce, but you have to pay for most extensions.

Want a nice status on your orders (“Pending” to “Completed”)? $29. Option to use Amazon payments? Free. But if you want your customer to be able to use their own Amazon account to pay you? $79. Want shipping rates from UPS/USPS/Australia Post/ Royal Mail/New Zealand Post/etc.? $79 each.

Going back to your own site. If you can do your own integration, that's good, but how are you going to secure your customer's payments? You'll need an SSL certificate. Charges vary, but figure $49 to $99 for one certificate for one domain per year.

Yearly cost = varies widely, depending on your skills. Picking-it-out-of-my-ass figures: upfront costs of around $150-$200 and plan for ongoings of $80 per year.

I'll be honest. I worked in internet security for a while, still read in the field, and nothing scares me more than carrying the responsibility for someone else's hard-earned cash. This may be an option I may choose in the future but, for now, I'm happy to go with a hosted solution.

There's another reason for choosing someone else to host the infrastructure. I see Etsy, Gumroad and Limited Run as “suburbs”. You know how you're comfortable shopping in a particular area of town, even though you know there's a similar shop maybe closer to your home? But you're okay to travel a little further because you know where you can find a park, you know the manager, and the shop layout is familiar to you? That's what Etsy, Gumroad and Limited Run bring to the table for me.

I shop at Etsy from time to time, so I'd be comfortable buying things from their “market”. Nate Hoffelder, owner of The Digital Reader, mentioned recently that he's a Gumroad shopper. And Limited Run is a nexus for independent musicians and I'm hoping it'll become a nexus for independent writers as well. I'll admit, they're my favourite of the lot. I think the trick is not to depend on just one end-to-end marketplace. Try a few and keep the experiment going for a year. Anything less won't give you good enough figures to analyse.

So, for the next year, it's Limited Run and Gumroad for us. I'm sure Heather will ask for an update close to the first anniversary of this experiment. Meanwhile, would anyone else like to chip in with their experiences? Remember, this has only been an overview. I could easily have written an entire post on each option. Remember to do your homework.

About the author

KS “Kaz” Augustin has owned and operated several successful small businesses in the past and is now bringing all her life experiences together as owner of her own micro-press, Sandal Press. You can visit her website, blog, Sandal Press, the Sandal Press blog, or follow her on Twitter.