In Defense of Hybrid Publishing

I belong to quite a few different social media groups that relate to writing and publishing. And every once in a while, a savvy new author will share information about a publishing deal they have been offered and ask the group's feedback.

Oftentimes, these offers come from hybrid publishers. Upon hearing that, many people will start chiming in with things like, "If you have to pay your publisher, it's a scam!" and "Publishers pay authors, not the other way around!"

I cringe every time I read those responses… But it's clear by their vehemence that there's little I can say that will change their minds.

To me, the question is no different than whether an entrepreneur should do their own bookkeeping and taxes rather than spend time working in their own area of genius. If you're not doing what you're best at, you're not going far fast.

And just as there are bookkeepers and accountants who are crooks (sorry, guys!), it's not all of them. Just as not all hybrid publishers are bad.

Here's the truth of the matter as I (a hybrid publisher) see it, and how we explain things to the authors we speak with.

What is Publishing?

Essentially, "publishing" is the process of taking a manuscript and producing a book out of it. It's that simple. No matter what path you take, that's all that publishing is…

The process includes things like editing, designing, pricing, printing, distributing and marketing the book–every single time. No matter how the book is published.

However, there are different business models one can use to publish a book, and each has its pros and cons. So it's important for authors to assess which model suits their needs best.

Traditional Publishing

With traditional publishing, the publisher takes on the expense (and risk) of producing the book. So they require creative control over its content, design and final format to maximize the book's sale-ability. They also receive the lion's share of the sales proceeds (typically 90%), even though the author is the one responsible for selling the book.

For an author who is writing their book to build a business or brand or to launch a writing career, pursuing the traditional publishing route can create significant problems. In addition to losing creative control over their book, they also have no say regarding the project timeline. It can take 18 months to 2 years for their book to be released and if, at that time, the publisher decides there's not a sufficient market for the book anymore, they don't ever have to actually release it.

Yet some authors still prefer this publishing path because they believe there is a certain cachet or prestige readers will place on a book when the title is published by a big name house. But, let me ask this… When was the last time you bought a book based on who published it?

For the most part, the distribution channels available to traditional publishers are the same as those available to books published by other means. So there's no great advantage there either.

The most significant positive to pursuing this publishing route is the existing relationships large publishers already have with retailers, which can smooth the way for getting a book into stores, but it's no guarantee.

Self-Publishing

The business model at the other extreme from traditional publishing is self-publishing. In this model, the author pays for any expenses related to the production of the book and acts as the publisher. As a result, they assume the responsibilities of a publisher, including the editing, designing, pricing, printing, distributing and marketing of the book.

The author/publisher does retain creative control and reaps all of the profit from book sales, but they are also responsible for adhering to publishing standards they may not even be aware of. And a lack of adherence to those standards can easily result in poor sales.

As soon as an author chooses to self-publish, they effectively have opened a publishing business. And for that business to be successful, they need to learn the ins and outs associated with editing, cover design, layout and formatting, production in various formats (large print, audiobook, and hardcover in addition to paperback and eBooks), pricing, sales tax, tax-exempt sales, printing, distribution, advertising, marketing and more.

They need to understand what retailers anticipate in terms of wholesale discounts, and how to maximize the reach of books so that they are accessible to consumers, retailers, schools and libraries.

Because of the sheer breadth of things to know, many self-published authors stop at simply distributing their books on Amazon in just one or two formats. However, that choice significantly reduces the sales of a book–meaning it significantly reduces the money in the author's pocket.

In the first quarter of 2019, 68% of the revenue generated from sales of books published by my company, Emerald Lake Books, took place on Amazon. The rest came from other sources.

What would it mean to you as an author if you could increase your book sales revenue by 32% with a little extra effort? How many more readers would that mean for you? Or prospective new clients?

Unless you are writing because you want to be a publisher, having to manage all of these extra pieces well takes away from the time you could spend doing the things you want to be doing.

Hybrid Publishing

In between these two models is hybrid publishing. In this scenario, an author is essentially hiring someone with the knowledge and expertise to successfully produce a quality book, while the author retains most of the creative control and a significant share of the profit. While the author does pay for the services rendered by the publisher, they have the help, support and guidance they need, in most cases.

I started Emerald Lake Books after self-publishing five different books and encountering different issues with each one. Unfortunately, when you're new to something, you don't always know what you don't know. And while there is plenty of information out there to help you figure things out, some of it is misleading and just plain wrong. And sometimes you encounter things you didn't even think about looking into beforehand!

So when I had friends coming to me asking for help with their books, I realized that I had knowledge and experience other authors needed, and I was willing to dig in, make a study of publishing, and figure things out. That's how Emerald Lake Books came into being.

And I'll be honest. We're still learning… As we've expanded our catalogue, we've encountered new situations that we've had to work our way through. For example, when we published our first authors outside of the U.S., we ran into questions (this time tax-related) that we didn't even think about before we started those projects.

The key here is, we keep learning. We keep expanding our reach, introducing additional formats, and getting better all the time at what we do.

Most hybrid publishers, like ourselves, are paid in advance for services rendered, and then retain some portion of the royalties as well. In our case, we keep 50%, but we are continually sharing publicity and marketing opportunities with our authors, running ad campaigns for our books, and revising and refreshing our book listings to keep them current.

In addition, reputable hybrid publishers like us don't accept just any manuscript. Submissions are vetted and must fit within the mission and vision of the publisher's program. These are just two of the nine criteria that the International Book Publishers Association (IBPA) has set for all hybrid publishers adhere to. (View the full list here: https://www.ibpa-online.org/general/custom.asp?page=hybridpublisher.)

What Makes Emerald Lake Books Unique?

Emerald Lake Books adheres to all nine of those criteria, but then takes things even farther. We partner with our authors from the beginning of every project, teaching them the things they will need to know in order to succeed as an author. After all, if you succeed because of what we teach you, we all succeed!

Therefore, we base our philosophy on the old adage of "Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime." Since you'll be growing your business and marketing your book for its entire lifetime, we'd rather guide you through understanding how to market things yourself, and what your priorities should be in marketing than to actually do the work for you.

As Zig Ziglar used to say, "You can have everything in life you want, if you will just help enough other people get what they want." That is our aim and focus in everything we do.

When we take our authors through a process that helps them articulate what publishing success would look like for them, they have what they need to then chart a course to achieve those goals.

In the past year, the books we have published have received numerous 5-star editorial reviews, awards and recognitions from independent sources, which has all been part of the plan for these authors and their books. But in addition to that, these authors have launched (or re-launched) businesses, seen their books adopted into university Marketing programs, grown their mailing lists, increased traffic on their websites (good for SEO), established their expertise, sold more of their products and services, and received both speaking invitations and consulting inquiries.

These are the things we have helped our authors achieve with the books we have published and coaching we've provided. We have even canonized our unique coaching process into a book called Publish with Purpose because we want to help every author create the best possible outcomes for themselves.

Beware the Vanity Publishers

Unfortunately, there is a subset of hybrid publishers who are better called "vanity publishers." They will take any manuscript, produce whatever the author wants, and disappear after the book is published, leaving the author with a substandard product that's improperly positioned and hard to sell. 

These are the folks that give the rest of hybrid publishers a bad reputation. They are crooks and cheats and are, in our experience, the exception, not the norm.

So, you always want to make sure that you check carefully into any publisher you use, especially a hybrid publisher. A good starting point is to find out whether they follow the IBPA standards. But you'll also want to look for reviews, testimonials, complaints or references–anything that tells you about the experiences others have had with a particular publisher.

In our case, testimonials from our authors are readily available on our site and we're happy to put prospective new authors in touch with our published authors if we decide that we are interested in a particular book for our catalogue.

So if you're curious as to whether working with a hybrid publisher is right for you and you want to explore working with Emerald Lake Books, we invite you to fill out an application and tell us a bit about your book and what you want to accomplish with it.

How is a list price set for a book?

I was recently asked the question, “How do you set a list price for a book?”

Sometimes our authors want their books to sell at a certain price, mostly because they want to make the book affordable for readers. And that’s definitely an important goal to keep in mind.

But a list price isn’t something you can just pull out of thin air. There’s actually a formula you need to keep in mind to make sure you can financially justify the price that’s set. That’s why it’s typically the publisher setting the list price rather than the author. The publisher has key information about production costs that need to be factored into the final price.

Understand the Market

At Emerald Lake Books, we start by looking at the prices of other books in the genre. From a reader standpoint, if two books on the same topic or of similar interest are both of good quality with positive reviews, the price may be a determining factor in their purchasing decision. So you don’t want a list price that’s too much of an outlier compared to other books on the shelf with yours.

Different genres have different “norms” for anticipated list prices as well. If you’re setting the list price yourself, you should be able to figure out the norms based on your research of competing titles. If not, use Google or another search engine to look for something along the lines of “average list price for books” or “average list price for paperback books,” etc. based on the specific information you’re looking for.

While this will help identify a range of potential price points, eventually, we need to decide where your book falls within that range.

Often, that’s based more on the author’s platform and perceived sales potential of the book. If the author is a first-time author or has a small following, the list price may be in the lower half of the range to entice potential readers to take a chance on it. A-listers or well-known authors can anticipate more sales simply because of their name recognition, so it’s easier to justify a higher price point for their books.

Run the Numbers

Once we’ve identified a range of prices we think might work for each format of the book, the next thing to do is “run the numbers.” As with any business, we want to make a reasonable profit on a sale, and we certainly don’t want to lose money on the sale of a book.

So, we have to identify the production and delivery costs of a book and factor that into its list price. These costs differ based on format, obviously, which is why there’s such a difference in pricing between eBooks and printed books.

Pricing eBooks

For the most part, the pricing of eBooks has to do with the genre. But we also need to consider the delivery costs of the eBook and that’s based on its file size.

The formula to calculate the list price for eBooks is:

(Royalty rate x list price) – delivery costs = royalty

For Amazon, the delivery fee is calculated by multiplying the file size by 0.15 (Amazon charges $0.15/MB at the 70% royalty rate).

Therefore, to set the eBook price, we calculate the delivery charge and adjust the list price until you reach your desired royalty rate.

Let’s say we want to receive a royalty payment of $2.00 on an eBook that’s 9MB. We can easily calculate the delivery charge (9 * 0.15) to see that Amazon will charge $1.35 to deliver the book.

Now our formula looks like this:

(0.70*x) – 1.35 = 2.00
Add 1.35 to both sides.
0.7x = 3.35
Divide both sides by 0.7.
x = 4.79

Therefore:

(70% * 4.79) – 1.35 = 2.003

Once we’ve identified what we think the list price should be, we go back and compare it to the range of prices for competing titles and adjust as necessary. Does it fit? Does it make sense? Does this author have a large enough platform that we can justify being in the top end of the range?

Pricing Printed Books

While you don’t have delivery charges for printed books, you do have printing (and possibly shipping) costs that are incurred to produce the book. And this is where authors can get into trouble if they’re hoping to distribute their book beyond just Amazon.

If a book is sold directly to a library or retailer, their anticipated wholesale discount is 40% off the list price. However, if a book is sold to a retailer through a distributor, the distributor receives anywhere from 5–15% of the list price (on top of the retailer discount). So, books can conceivably be sold wholesale to retailers via a distributor for up to 55% off list price.

Therefore, your royalties might be calculated on only the remaining 45% of the list price. But, wait! We haven’t accounted for printing and shipping!

It is essential when setting the list price to make sure that all printing and shipping costs (commonly referred to as just “print costs” or the “price per book”) can be covered and still have something left over. I’ve seen some authors price their books in such a way that they are actually losing money if a retailer wants to sell their book. And that’s no way to stay in business long.

Amazon, like other retailers, gets 40% off the list price. The publisher’s royalty is calculated on 60% of the list price, less the printing costs.

So, the formula to calculate the list price for printed books is:

(Royalty rate x list price) – print costs = royalty

To settle on the list price then, we need to estimate our print costs (most printers have calculators where we can check that quickly).

We’ve a simple spreadsheet that shows us the royalties of a book whose total print cost is x and list price is y. All we need to do is plug in those two numbers, and we can see immediately what the royalty will be when the book is sold at both 55% and 40% off the list price.

We continue to play with the numbers until we know we’ll earn at least $2.50 (preferably $3.00) when a book is sold at a 55% discount. We focus on that specific number knowing that if we can make that work, then books sold at a 40% discount will simply produce a larger profit for us.

Setting the list price for a book is all a numbers game. Know your numbers and adjust them until comfortable.