John Locke Better Off?

Mike Shatzkin does a great job making a solid case for the fact that John Locke, a million-selling indie publisher selling his books for 99 cents would have made more money selling his books traditionally. Interesting thoughts by Mike.  And then in the comments Mike and Joe Konrath get into a great discussion.  Worth the read, folks.

http://www.idealog.com/blog/would-million-ebook-selling-author-john-locke-be-better-off-with-a-publisher-i-think-he-very-well-might

My sense is that Mike is both right and wrong.  As I have seen over the last twenty-five years, things go wrong in traditional publishing all the time. Going that way, Locke would have been taking a huge gamble on timing, pricing, and making only a small percentage of the money. We all know those arguments since we have had them here over and over. He might have made more money, but with traditional publishing, so many things can go wrong, I tend to not want to make that argument.

And the other argument we have had here numbers of times is the 99 cent price range.  Sure, John Locke sold 1 Million copies. But he only got 35 cents per copy, so he made before any other costs, as Mike talks about, around $350,000.00.  Now granted, that’s nice money, but not for that amount of sales. It’s a stunningly low amount of money for those kinds of sales numbers. And seeing it that way bothers me, to be honest. John Locke seems to really be devaluing a writer’s value.

I hate that.

(And that’s part of Mike’s discussion in his article and in the comments. A million seller in traditional publishing would be a multi-millionaire a number of times over. Locke made $350,000. That’s a HUGE devaluation of the value of writer’s work.)

Math goes like this: If John Locke had believed in his own work enough to sell it for $2.99 and sold only a half million copies, he would have made $1,000,000.00.  Sell half the number, make 3 times the amount of money.

Math goes like this: If John Locke had believed in his own work and sold his books for $4.99 and sold only 100,000 copies (1/10th the number) he would have made the same amount he made selling one million copies.

Mike and Joe have a great discussion about different audiences for the different price points. And I sort of agree. Just as discount dollar store shoppers seldom go into expensive stores. And people who drink Ripple don’t buy $20.00 bottles of wine, I think there are two distinct groups of shoppers with little cross-over.  99 cent ebook shoppers won’t often spend $9.99 for an ebook and $9.99 ebook buyers won’t think there can be much of value at 99 cents.

So go read the great article and the discussion afterwards. Worth your time. But my opinion is that writers need to believe in their own work and not devalue a novel by tossing it into the discount bin of 99 cents. And the more I read and the more I see writers like John Locke hurt the rest of us, the more I am going to shout about this I’m afraid.

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29 Responses to John Locke Better Off?

  1. David says:

    Dean,

    John Locke put out his first self-published book in July, 2009. Let’s assume he found an agent, found a publisher, and was offered a contract for that book by that date. Based on your experience in the publishing industry, how many books do you think he’d have out right now, and do you think he could have generated the buzz with a few trad-pub books that he’s generated with his nine self-pubbed titles?

    • dwsmith says:

      David, oh, heaven’s no. He would be lucky to have one book out. As I said, going traditional publishing is far, far more dangerous than indie publishing. Trust me, after over 100 novels now traditionally published, I can tell you how many hundred things can go wrong with any book, and often do. And getting paid these days is becoming another matter all together. Not counting accurate accounting of electronic sales. That’s laughable from most publishers as well.

      I am a fan of indie publishing. But with that control comes writers like John Locke who undervalue their own work. That’s all I’m saying. Nothing more.

  2. Doug Lance says:

    There isn’t a race to the bottom going on. Books have always been and will always be as valuable as you can convince someone that they are. DON’T PANIC.

    :)

  3. Lyn says:

    Dean,
    Interesting thoughts on the devaluation of a writer’s work. So would your norm (and relative worth for your writing) be 99 cents for a short story (since that’s what you currently charge once the free period is over)? I’m not being flippant, but am wondering out loud: If there is so much free fiction online already (some of it quite good), why should one pay 99 cents for a 6k word or less story?

    I suppose this is where a writer’s reputation kicks in? That is, the better known the author and the longer track record of good writing he or she has, the more likely he or she will be able to ask for (and get) more money per story/novella/novel. Is this the current thinking?

    Thanks again for posting thought-provoking info on the writing and publishing process. Regards, Lyn

    • dwsmith says:

      Lyn, what’s interesting is that I publish those stories I put up here for free BEFORE I put them up for free. And often while they are still up for free I’ve made numbers of sales on Amazon and B&N and Smashwords. Yup, it’s free for a few days on my site and yet people still buy them.

      99 cents is the price for short fiction. Just as in music, a single song is usually 99 cents, an album a lot more. I price 5-story collections at $2.99 thus giving readers stories for 60 cents each and I will price (don’t have one up yet) 10 story collections at $4.99 giving readers stories for 50 cents each. But alone, I put short stories up there with the writers selling novels for 99 cents.

  4. Camille says:

    I think that, because there isn’t that much overlap in audiences, they aren’t going to hurt us that much.

    But I do think that it will hurt the rest of us some, because so many writers are afraid, and have not learned to have confidence.

    I do look forward to a vibrant “amateur” class of fiction writing, kind of like a cross between fan fiction and student literary work. Something like that would be great for ultra cheap prices. But I suspect the prices are going to vary across the board and simply confuse the reader about what they’re getting.

  5. Thank you for saying this, Dean. And explaining the math. I’m sure a lot a writers had the same thought. While the media crows about the “most successful indie writer ever” a lot of us, like me, are thinking “million sales, $350,000, what’s wrong with this picture?” — and NOT what’s right with it. Even though it’s Locke’s own decision, that doesn’t stop me from considering it a questionable one. Though of course, seemingly brilliant — when view in hindsight.

    That’s why Joe’s comments at the post you linked to are must-reads. If it’s John’s strategy that was brilliant then why can’t it be repeated consistently by other kindleboard regulars who do exactly the same things as John?

    The vast majority of writers will never be 2 million a year sellers, even if they give the books away free, but that is not stopping writers from consistently believing they need to price that low. Many 99cent books on Amazon. Many of them aren’t selling.

    The glib response is that these writers didn’t write good books. That’s true in many cases, but “good” is highly subjective, probably undefinable, and not even useful in this context. Mystery vastly outsells science fiction. So under the “write better, sell more” solution science fiction books should be mysteries. Every kind of story should be romance actually, since romance sells best of all.

    I hear about some writers who’ve gotten started self-publishing are pulling their stuff down, after not making any money for a few months.

    You nailed it in the last paragraph. Writers need to believe in their worth. Writers pulling their work down, or charging next to nothing, is another symptom of the same disease that prevents many writers from sending out stories and novels the publishers under the traditional model.

    Have a little confidence, and keep working. But if a writer doesn’t believe s/he has a novel that will give three to ten hours of enjoyment to a reader as a fair exchange for something like 3-to-8 bucks, then yeah, s/he probably doesn’t have any business charging for it. If the idea of failing is so unbearable that a writer has to shamefacedly devalue her or his own sweat for fear of a bad algorithm ranking , then a writing career will always mean misery to him or her anyway.

    • dwsmith says:

      Michael, you’re kidding me, right? Writers, after all the work of indie publishing, are pulling down their books and stories????? Why in the world would any writer do that? I am a person who does not believe in the ability of writers as a class to think beyond the ends of their noses, but that’s even more stupid than I can imagine.

      A story is not better in a file cabinet where no one can read it. At least sitting up published, there is a chance someone will see it. Duh…

      Shaking head and walking away…

  6. Nathan Wrann says:

    My first thought when Locke made the 1,000,000 sales club: “Yeah, but he only made $300,000 gross.” Granted, it’s not peanuts but there’s a lot of cash still left out there on the table.

    Of course, the counter argument to this (and I think that this is his side of the debate) is that if he hadn’t priced at 99¢ he’d be a 100 selling schlub like the rest of us.

    I can’t be worrying about what other people are doing.

    Funny thing. I caught my wife buying a $9.99 indie e-book for her nook. This is the same woman who 2 months ago declared that she would never pay more than $2.99 for an ebook.

  7. Mark says:

    Dean, you’ve said that books are not in competition with one another, so why does it matter if a writer “undervalues” his work and prices it cheap? Maybe he’s leaving money on the table, but maybe he’d rather have a million readers than half as many even if it meant more money.

    Also, when we’re talking about Locke making 35% from a million Amazon sales, remember that his books are available elsewhere too. I wouldn’t be surprised if he’s made half a million in a year with his books.

    And they’re still selling. He’s still making money.

    • dwsmith says:

      Mark, I still stand by the fact that books do not compete with each other. I just get sad when writers undervalue their own work is all. This is just me doing my normal shouting at what I see as writers taking guns to their own feet. Just like hiring a blogging agent or believing it takes years to write a book or that everything should be rewritten a thousand times. All in the same area of head-shaking-silliness as far as I am concerned.

      But won’t hurt me. Just as books sold in discount bins or discount mall stores hurt my traditional books. They don’t.

      And I am sure that a fine vineyard that produces $20.00 bottles of wine doesn’t much worry about the Ripple or other cheap wines sold in grocery stores either.

      99 cent novels don’t worry me about my own work in the slightest. I just hate to see writers having such a low opinion of their own work is all.

  8. Tori Minard says:

    Dean, I read this today in a Dave Farland email (his writing kick in the pants): “So a lot of young authors are trying to self-publish. Over three-million books were self-published last year, most of them electronically—up from only one million the year before. But that’s not working for the vast majority new authors. There’s too much competition. This week, I heard of one author who said, “After nine months of self-publishing, I’m taking my works down.” ”

    Farland then goes on to say he’s starting his own publishing company, that will pay better rates and provide better marketing than the “Big 6.” I interpreted this to be a sales tactic on his part — “see, self-publishing is too hard, so come over to my side.”

    I wondered the same thing you did about that self-publisher’s decision. Why take the books down? Even if you’re only selling 1 copy every other month, that’s a copy you wouldn’t have sold otherwise. I can only say that writer is probably still operating on the produce model of publishing, and since he didn’t make it big in 9 months, he figured it was no use to go on.

  9. David Barron says:

    The point stands, but I think it’s more a learning experience for publisher John Locke than anybody else. Everybody has to muddle through at their own pace, with the best information they’ve collated at the time. He can always write another book, and let’s say he spent $2,000 bringing this book up (cover, copy-editing, formatting, what-have-you), and about 360 hours writing it: he’s still brought home a pretty good return on that investment. …and he can always set the NEXT book at 2.99 or 4.99 now that he has some solid data.

    I only have three price points right now for electronic publishing:
    $0.99 (AKA “a buck”),
    $2.99 (AKA “a few bucks”)
    $4.99 (AKA “a book”)

    I would use $7.99 (AKA “a bargain”) as a price point for a big pile of short stories or a duology in one convenient collection.

    I believe that any price below $9.99 is not a significant factor in whether somebody buys my ebooks compared to Cover and Blurb for first-time buyers, Story for repeat readers.

  10. Mark says:

    “And I am sure that a fine vineyard that produces $20.00 bottles of wine doesn’t much worry about the Ripple or other cheap wines sold in grocery stores either.”

    Thing is, some people actually like Ripple better! And Ripple is to books as pulp writing is to literary fiction, if you want to extend that analogy.

    • dwsmith says:

      Mark, saying pulp fiction is of poorer quality than literary fiction just shows where your bias is and ignorance. Sorry. Best storytellers ever working came out of the pulps and are still being sold today. You know, Burroughs, Brand, and a ton of others you can still find at any paperback rack. Go ahead, find a “literary writer” from that same era still on the popular stands today. You won’t. Except in the annual Bulwar Litton (sp?) contest.

      And yup, some people actually like Ripple better. (Does Ripple still exist or am I dating myself? (grin))

      I knew better than to talk about pricing again here. Why writers want to go out of their way to defend 99 cents and get angry when I suggest they value their work more is beyond me…

      That’s it. No more pricing discussion here. Just makes me more discouraged at writers in general.

      Hey, Mark, what prices are you selling your novels for? Where can I find one? I assume you are a writer. Or is that assumption wrong and you are just here defending your desire to keep spending 99 cents for a novel?

  11. Aron says:

    Dean,
    Great posts. I’ve really been enjoying them and agree that writers need to think carefully about their pricing. I tend to write short stories and have used your 99 cent model as a an example for my own endeavors. It really is about confidence in yourself and your work. Thanks for the guidance your posts have been providing so far :)

  12. Mark says:

    I write under a pseudo and I am writing erotica. I sell novellas at $2.99 and shorts at $0.99, but that is only because I have decided that the erotica market will pay those prices for unknown writers with no marketing clout. I want to write other things, pulp mostly, eventually, but the erotica seems like a surer bet for now. The price I sell at has nothing to do with any kind of quality I assign. It’s a business decision.

    My short stories sell between 20-40 copies a month mostly. My novellas are about the same, with one exception, a novella that sells about 60-80 copies a month. It’s all new since April, so my numbers are only based on a short time. And they are based on Amazon and B&N. I was lazy about getting them up on Smashwords and they didn’t get pushed to other platforms until early June.

    I don’t need to buy $0.99 books. I can get ebooks from my library for free. My library is actually about six local libraries that pool resources. It’s great. I don’t have to go the library to get a book — I do that from my couch — and my books are never late.

    • dwsmith says:

      Wow, Mark, sounds like you are doing great. That’s cool! Honestly. Congrats.

      Kris and I also put up novellas (short novels) at $2.99 shorts at 99 cents. But we don’t have one selling that many on any single site. Nice!

  13. Brandon Wood says:

    Well, hell, I’ll disagree with you, why not. I feel like David going up against Goliath, but I really do think you’re overlooking something: Locke made around $350,000 so far. The key words being “so far.” He’s sold a million plus copies at 0.99 cents to date, but those titles are forever (as you’ve said, which is why I’m a little confused at all this talk of “undervaluing” the work. Why aren’t you seeing this as an intro price/a way to draw in readers?). By pricing low and drawing in an audience, he’s setting himself up to be a big name (and, more importantly, a big seller) in the long term. And then he can price his books higher, once he has that audience. Hell, I would be absolutely thrilled to make $350,000 on anything. I love writing and will be writing and e-publishing for the rest of my life. Even if I never reach the sales I’d need to quit my day job, I think it’s pretty cool that something I love doing can make me any money at all. And when you think in the new long term of indie publishing (i.e. your life), the potential profits are there, though you might have to risk “losing” a little money in the short term. At least, that’s how I see it. Full disclosure, though: I’m not pricing novels at 0.99 cents… although I might have just talked myself into considering it. ;-)

  14. Carradee says:

    That devaluation thing is why I first decided what I’d do with short stories, and from there came up with a pricing scheme according to word count. (Which, when I have more written, I also hope to bundle.)

    I dropped the price for my one released novel for the month of June (to $2.99 instead of $3.99), and my sales actually dropped. Granted, many folks’ sales dropped, due to that Sunshine Deals sale on Amazon, but mine haven’t gone back up.

    We’ll see what happens when I raise the back back up in the next few days, and when I release another novel at the same time.

    When I first heard that John Locke had sold 1 million e-books, the first thing I looked at was his prices. My thought: “Eh, I don’t want to follow his tactic.” I can understand having pricing one book cheaply as your recommended “tester”, then price the others for more, but to have all of them that cheap? It doesn’t make sense to me.

  15. Alii says:

    I find it fascinating that Amazon changes the royalty structure so much between one price and the next. I would imagine that the ‘but I get more of the book’ would be incentive for writers self-pubbing to value their books higher.

    I get the feeling the royalty jump suggests that Amazon would prefer to keep people paying higher amounts of money for literature, but underestimated a writer’s ability to rationalize the 99 cent structure.

  16. There’s another effect that writers are ignoring when they price their stories too low. They’re biasing the reader to expect lower quality by way of “Pricing as a quality signal”.

    It’s a well documented marketing effect that might at times, work against the writer rather than for him (when he prices at $0.99). The quality of the work hasn’t changed, but readers will feel differently about it based on the price they paid.

    Experimenters have shown that the “quality ranking” of the same bottle of wine, given to different people, will go up as the price goes up–to a point. The same works in reverse.

    So as a long term strategy, I think keeping your books at $0.99 *could* actually hurt your sales by creating the impression of low value. Rather than a short-term lowered price ($0.99 for this weekend only!) which creates a demand spike which translates to longer term sales without impacting brand impression.

    The other issue with authors trying to interpret pricing strategies of the market, is that without substantial regressional analysis of the statistics, they’re all just guessing. They don’t know which factor is causing certain authors to sell more (cover, price, quality of book, marketing strategy, etc.) so it’s pointless for them to put all their eggs in one of those baskets.

    As for myself, I’m sticking to the pricing structure you’ve suggested Dean. And in a year, when I have ten books up and a bunch of stories, I might play with some short term pricing strategies, but otherwise I’m focusing on writing more.

    Tom

    • dwsmith says:

      Thomas said, “Experimenters have shown that the “quality ranking” of the same bottle of wine, given to different people, will go up as the price goes up–to a point. The same works in reverse.”

      Yup, I’ll dig up one of those studies and link it here. I’ve read a number of those, actually. Very clear and time-proven. Thanks, Thomas.

  17. Dean, I think you underestimate the effect of price on sales volume. A couple of months ago, Joe Konrath dropped the price on one of his $2.99 titles to $0.99. He dithered before doing it, because he was concerned that the book would need to sell six times as many copies at $0.99 to earn the same money. As it turned out, the book sold something like 40 times as many copies at $0.99, and Joe made a lot more money on it.

    Far from being bad for authors, I think the $0.99 price point is wonderful for authors. Okay, you make only $0.35 per sale, which is about half what you’d make on a new paperback sale. But what you earn on a new paperback sale is a one-time royalty. You get zero when that paperback is resold or passed along or given to the library. On the ebook, you make $0.35 every time someone wants a copy to read.

    Furthermore, consider what you’re getting for your money. With the ebook, you’re paying $0.99 for the right to read it, period. You can’t resell it or pass it along. With a paperback, you’re buying a product that you can keep, give away, or resell. I’ve been arguing for months that $0.99 is the “natural” price for a full-length novel ebook. Why? It’s about half the price of a used paperback. When you’re finished with a used paperback, you can trade it 2-for-1 at a used bookstore, so the cost of reading the story is also about $0.99.

    Please don’t sneer at that $0.35 royalty. In my opinion any sane author would trade the one-time $0.70 (or whatever) royalty on a paperback sale for a $0.35 royalty every time someone buys his book.

  18. J S says:

    All the earnings discussions here are based off the assumption:
    “If Locke sold a million books …. he could have made a bigger pile of cash had he only priced his product higher”.

    Markets don’t work that way.

    If Locke sold a million at $1 each he’d likely only sell a 100,000 copies at $10. Why? Because far fewer people will pay $10 for a product.. “I can check it out from the library” or “A book for just a buck? I’ll get the whole trilogy!”.

    How many neighbors do you know own $100,000 cars?
    Now how many of them own $10,000 cars?

    Pricing and volume fit within a demand pyramid.
    You can have fewer readers or more readers .. but the pay is the same.

    Like everything, this has been done before ..

    I was looking up Stoker’s DRACULA earlier today and saw that it was originally released in the 1897 low-brow book publishing market then called “Shilling Shockers”. Great description!

  19. A couple of points from John Locke himself:

    He set the 0.99 price for his novels because he had a specific size of target audience in mind (indeed, a specific target audience — and the guy’s background is in sales and marketing; he knows this stuff cold). For his latest, the non-fiction how-I-did-it book, he set the price at 4.99 because it had a much smaller target audience (indie publishers). He discusses this in said book — set your price according to how much you want to make and how big your target audience is. (Don’t know your target audience? Then how do you know what to write? — paraphrasing JL).

    He already had plenty of money, so income per se wasn’t an issue. I won’t believe anyone with a sales/marketing background who says they’re not trying to maximize income — but the smart ones (no question Locke is smart) take a long term approach to that. His first goal was to build a dedicated fan (ie, customer) base.

    This is stuff he talks about in his “How I Sold 1 Million eBooks in Five Months!” book (which I’m halfway through). OTOH, the guy is a fiction writer. (It’s also apparent that he’s written his share of marketing material, too, but he’s easy to read.)

  20. Christian K says:

    After reading his book, blog, twitter, and following him for sometime, I think John is far more interested in his amazon ranking than how much money he is making per book. i.e how many people have read his books, not really how much he makes from each book, though that is a concern. He get’s far more joy from being able to say has had “4 of the top 10 books on Amazon/Kindle at the same time including #1 and #2!”. In short he’d rather sell 1 million .99 books rather than 200K 2.99 books, even tho he’d make more money from the latter.

    I get the impression that this is a fun sideline. Yes, he takes it seriously, but writing isn’t his “career”.

  21. Putting my two cents in here. I think a point being overlooked is that most of John Locke’s .99 books are around the 40K word mark. To me, that’s more of a novella, or a long short story. So, compared to a 140K word book going for 2.99, the price seems logical and reasonable.

    Most of my books are at 2.99 and all of them are over 100K words. When I put one on sale for .99, it’s because it’s linked to another, part of a series, and I’m hoping for some spillover to the other books…which has worked so far in spades. I’ve had two freebies as well, the first an accident and I tore my hair out until Amazon raised the price again, not realizing how it would help the sales of my other books. Rookie mistake *s* Second freebie I let ride for 2 weeks and it’s still selling great.

    Sometimes it’s purely strategy and nothing to do with what the author thinks their book is worth. I cringed when I lowered the price on the current loss leader to .99, because it won awards and had a great print run…but if it helps bring new readers to the trilogy…I’ll grimace and bear it.

  22. Dean – First, please do talk about pricing again. This is an aspect of publishing that writers have never participated in before, and we really need to understand it. I took a series of business seminars last year and three of the workshops were focused on pricing, which is a highly complicated subject in every business, as far as I could see.

    Second, John Locke’s price may be undervaluing his writing, but it undervalues no one else’s (which seems to be to be akin to suggesting that my mass market books undervalued a hardcover book’s value for another author).

    Readers (especially voracious readerrs, which is what a million seller must attract in some numbers) are looking for a good story competently told. They know how rare it is to be swept away by a book, and are happy to settle for enjoying the ride (I speak from my experience as a voracious reader from the age of 5, not as a writer who wants every human being on the planet to love my books and never want to part with them :-)

    Locke has written about his pricing methodology. He knows what results he wants, and he set the 99 cents price to get them. I respect him for being so clear eyed. Selling a million books in 5 months is awesome. And being able to change his prices to 2.99 or above and get the higher royalty if he so chooses is completely within his control. The pricing guru who ran my workshop would have a lot to say about the pricing decisions — and the proof that it worked as Locke hoped (the hardest part of all of this biz). He would also be advising Locke to raise his prices to take advantage of the 70% royalty, and reap the rewards of his hard work reaching a broad readership.

    But writers who are happy to start small in sales numbers, and see their readerships grow are making just as valid a choice (which values their writing, but does not reflect on the value of any other’s writing).

    Readers vs dollars. Writers have been making that choice all along, with much less control. When I sold my first book, it received a small advance, but was in a series launch ($$ vs potential reader eyeballs). How is that different from putting my first book in the series on sale at 99 cents to find the readership for my other (3.99) books in the series? Well, in at least one big way – I control the price, and when it stops increasing my reader eyeballs by a factor of 10, I can take it off sale, knowing I’ve saturated my target market (for the nonce…which is the good thing about long tail sales).

    I sold that first book hoping that sale would get me the readership to keep sales going (and it worked for a while, since I sold six more books to that publisher).

    If Amazon or PubIt allowed me the choice, I would much prefer to have a list price, and a sales price (preserving both value and opportunity to reach a broader readership). But they don’t. Yet.

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