For those of you indie publishers with questions about the pricing and payment process and such from Ella Distribution, they defined everything clearly now under the publisher’s tab. Take a look. I think it will make more sense now than my description the other day. (grin)
And remember, Ella Distribution pays up front and is non-exclusive. Stay tuned for more announcements and fine tuning here and on the Ella site. And you can buy my signed books there and also a ton of the WMG Publishing Kristine Kathryn Rusch books as well.
Also, bookstores are coming on board now slowly as well. Fun to see this slowly taking flight.
Great info and very nice to see the breakdown.
I could live with a little more flexibility at the upper end of things – but all in all beyond cool.
My biggest concern was shipping. I was seeing the $1-$1.50 margins and thinking ‘shipping is going to eat that up and leave crumbs’!
The 10 book minimum order is beyond awesome. That’s a nice check in the bank every time you get an order.
the funny thing is, a billion posts ago Dean was preaching calculating a paper price that left $2 or so in extended distribution profit to prepare for indie distributors and the ‘cut’ they would take. The force is strong in him…
What Ella is offering is a fantastic discount and a reasonable profit in light of it – the non-exclusive nature of it makes it like Christmas.
I had a few people in the small press I am slowly putting together mention that a dollar or a dollar and a half is low for profit on a $18 book.
The thing to remember (and i am sure dean will correct my royalty rate if I am off) is that in traditional publishing @ a 7% royalty on a $8 mass market you are getting a whopping 56 cents. Even on a $17 trade you are getting 1.19.
Ella is at least comparable – maybe better depending on where you fall in their pricing range. Great stuff.
Thanks, JoeMontana, glad it is making sense now. Yes, Ella pays shipping. And publishers are always welcome to price their books slightly higher to make higher margins. The chart on Ella now is just what Ella can do and the range of prices recommended for page count.
And yes, if you have a $15.99 trade paper in traditional, you are going to get an 8% royalty rate. $1.28 per copy sold. So Ella is in that range.
The key that most indie publishers don’t recognize YET is that having books listed and placed in indie bookstores and gift shops and so on will spur readers to buy electronic as well. And their other books.
Writers are always saying that the reason for going with a traditional publisher is getting books into bookstores. Well, that’s starting to change. And the Ella Distribution business model is solid and I am sure other distributors will follow.
The world is changing.
Hmm. Useful to see the pricing structure. Not sure it will work for me.
Let’s see: my 438 page novel is $7.99 e-book and $19.99 POD. (My extended distribution profit at CreateSpace is $1.89.)
Ella would buy the book for $6.60. The printing cost to me is $5.89. So I make $.69.
That’s better than I thought. Last night when I was guesstimating, I remembered the printing cost incorrectly as $6.10, which meant I made $.49.
I’m still learning business. Is $.69 workable? I certainly would like to work with Ella!
Whups! Math error.
Ella would buy the book for $6.5967 which I rounded to $6.60.
My profit would be $.71.
Yet more math errors!
My first memory was correct. (I looked at the wrong spot for my cost.)
My cost is is $6.10 per book.
If Ella pays me $6.60 per book, then I make $.50 per book.
I’m still in the production process for my next 2 PODs, so I don’t have a precise cost to me for them yet. Both are shorter – 112 pages and 200 pages. Maybe the pricing structure will work better. Fingers crossed!
All the price breakdowns are now on the Ella site under publisher tab. http://www.elladistribution.com
I honestly really like the idea, and I want to like it more, but some of it doesn’t sit right with me. The concept behind it and all of how it works in practice sounds flawless, but the prices are difficult for me to get behind.
Mainly, for a print book through CreateSpace going just to Amazon, it’s still relatively lucrative to price it at a “common” price of $7.99 for anything under 300 pages. I completely understand why Ella Distribution can’t do this(pretty much no one would make money), but I’m honestly really used to the $7.99-ish price point for paperback books that I buy. I’ve occasionally grabbed the larger size paperbacks for a higher price, but I’m really reluctant to do it most times. This could just be me, but because of that it’s difficult for me to understand these prices. I’ve only just released my first full-length novel, so I admit I have no real evidence or personal numbers for any of this.
Random example, but for my paperback that I just released, I have it priced at $7.99 through Amazon currently, with potential thoughts towards expanded distribution in the future. It’s 258 pages long and I get $0.85 for every sale through Amazon.com. For this same book, to distribute through Ella, I’d need to price it at double the price to get somewhat comparable profits(a bit more on the Ella side).
I’d get far more on Amazon, but will customers really pay double the price of what I think is a “fair” price? Will there be enough of them that it’ll work out, or is $7.99 going to win out in numbers in the end? I can get behind the idea that just having a book available somewhere is good promotion, too, but is that what this essentially boils down to? Should we expect to actually sell books at these price points, or is it more about getting a book into a store so that we can market our author names and attract customers to find us online(for eBooks, etc.)?
I honestly like the idea a lot, but I’d be really interested in graphs and numbers and all of that to go along with it. I mean, if 5x more people buy books at $7.99 than $15.99, both pricepoints would end up fairly even in the grand scheme of things($15.99 would probably even win out since you can expand distribution and gain a wider audience, all of that), but without numbers or anything, I’m really reluctant.
One random addition here: Does the cover price to Ella have to be the same as the price on Amazon.com, BN.com, or wherever? I don’t know how that works or how “ethical” it’d be, but I’d be far more willing to try it if I could have the book available online through CreateSpace for a cheaper price, and then sell/distribute through Ella at the higher price, but then I don’t know if this would work. I think places already do this(I just grabbed Fifty Shades of Grey off Amazon for $8.77, it’s priced at $10.04 on BN.com, and the price on the back of the book above the UPC says $15.95). I’d 100% be willing to accept something like that set up, but I don’t know if that’s how this Ella stuff works. If it is, then hey, I’ll do it as soon as they open to the public.
Cerys, you are mixing apples and oranges I’m afraid. You are talking “mass market” paperbacks at $7.99. What you get from CreateSpace is “trade paperbacks” and all trade paperbacks out of New York range from $12.99 to $24.99 depending on size and genre and such.
You can not YET get mass market paperbacks from any POD publisher.
And interestingly enough, the mass market paperbacks have taken the worst hit and are down upwards of 50% since the advent of ebooks. However, trade paperbacks have grown every year, sometimes by double percentages, in sales. Hardbacks are down slightly.
Cerys,
Just to expand on what dean is saying here…
Your 258 page book in createspace is costing you ~ $4 to produce. Your $8 cover price is losing 40% to amazon ($3.20) so they pay 6.80 to get it from createspace – $4 to make it is your .80 royalty.
Fine if you are looking to make under a $1 per copy.
the issue is, it is a 8.5 x 5.5 or 6×9 (or whatever) trade paperback. You are pricing it like a mass market book (the kind you see on a supermarket rack).
again, up to you, but the market for tradepaper is 15-20 bucks give or take.
with your $4 cost to produce, if you retailed for $16, you’d look professional, be in the ballpark of other trade paper books and also be making much more profit.
Ella is NEVER going to get you the same royalty you get on your own. It;s simple business. Every layer takes a cut. Period. The issue is velocity. They can get to more places and faster. If they can get you into (hypothetically) 200 markets you were not in before, what is that worth to you?
If you can get $1 from them vs $2 through createspace’s extended distribution program, but they can get you selling more copies, you have to weigh the pros and cons.
Keep in mind too that visibility may help e-book sales for you or draw eyes to other novels.
Ella is ONE place (a promising one, but one). As much as Dean is liking this, I doubt he is advocating you go to Ella and forsake all else. Keep selling on Amazon. Stay in extended distro with createspace. Try selling direct to bookstores. Make sure you are at smashwords/barnes and noble etc.
Ella is taking all of the risk out of this (money upfront, no returns) and paying NY level paper royalties (or close to it).
Remember, as Dean pointed out, a $15 Ny trade paper book @ 8% royalty is about $1.20 to the author. Ella is offering you that non-exclusive with no fees, baggage or sketchy accounting. They mail you checks, you mail them books. Period.
Hey Dean. I’ve read your posts and have been really curious about POD for a while now, but I admit the numbers still don’t make much sense to me. Is there any way you could explain it further? Or break it down in the basic math way that you have in other posts?
Elisa, not sure what you mean “don’t make much sense.” They are just books, so guess I am confused as to what your question is. Fire it at me again and I’ll see if I can help.
The math on Ella’s part. How did they come to the net profit numbers? Sorry, I guess my question wasn’t very clear either, was it?
Elisa, I think Joe Montana explained it clearly and on the money. If that doesn’t answer your question, please do try me one more time. (grin)
The key to remember also, that joemontana didn’t mention, is that Ella gives bookstores a 50% discount plus free shipping.
So you have a $16.00 book, the bookstore takes $8.00 of that for putting in on their shelves and their overhead and their risk.
That leaves $8.00 to be divided between CreateSpace, the author, the distributor, and the US Postal service. CreateSpace is going to take $4.00 plus of that leaving less than $4.00 between the author, the distributor, and the postage. Interestingly enough, we can all do fine with that amount.
One thing to remember. In general, regular distributors take between 8% and 12% of cover. Traditional publishers usually work on a 4% profit margin. Authors when working with traditional publishers get an 8% royalty rate. So if an author for sales into bookstores can get an 8-12% profit margin off cover price, that’s right in the normal range.
The math of ella or POD printers like createspace?
elisa,
Just to take a stab because I worry my post above in answer to another question was less than clear…
Ella Distributing is offering to pay you 33% of your cover price (that you have set) and pay your shipping cost for you to send them books from createspace.
So your profit is Cover Price x .33 – cost of book to you.
If you have a 15.99 novel that costs you $4 to print (createspace give you the cost in their calculator) Ella pays you 5.28 for the book and covers shipping. You buy the book from createspace at author discount (the $4 cost) and send it to them. so they pay you $5.28 and you pay $4 for the book – you make $1.28.
Now Ella had minimum cover prices they will accept to be sure there is profit to be made or they will not accept your book (They are not going to let you charage 15.99 for a 700 page book that costs $10 to make – no one would make money there).
Createspace on the other hand is a printing service that you pay to print the book you upload. they also have distribution services that you pay different % for – for example, they will sell your book on amazon for a 40% cut.
So, your $16 book will net you 16 x .6 = $9.60. You spend $4 to print it, so you make $5.60.
make any sense?
Thanks, Joemontana. Seems clear. Appreciate that.
That looks great! I’m pretty psyched for the opening.
But…
Ella’s going to place an order and then…mail…a check? Seriously? As easy and cheap as it is to wire or ACH or EFT or just Paypal money these days they’re going to go through the annoyance, time delay, and (slightly) greater expense of a paper check? That seems a bit bass ackwards. Hell even the Fed gov’t does electronic transactions, and they wouldn’t know efficiency if it jumped out of the bushes and beat them with a stick.
I mean shoot, it ain’t 1970 anymore. Am I missing something?
Michael, honestly, there are a number of reasons for that. It might change down the road, granted, and Ella has no issues with electronic anything. They built that website, didn’t they? (grin) But to start off, checks to publishers are needed for a number of reasons, not the least of which is accounting and tracking. I imagine as more publishers climb on board, that will change and they have made plans for that changing. But checks, I know, seem old school, but are a way a lot of things are still done.
We even still take checks at WMG Publishing for books and subscriptions to Fiction River. And many, many bookstores still write checks to distributors or use a special credit card. All that is planned for.
This business sounds wonderful and I wish them every success. I can’t wait until ella opens its doors to writers outside USA and includes Paypal for payments, or similar independent distribution businesses spring up in other countries, like Australia and Europe.
DJ, Ella is talking about that. It will happen, but first it has to get off the ground here.
I’d just like to say, as a new mom with *very* little time on my hands – Ella is perfect for me. Yes, I’m aware I could have done the catalogs and reached out to indie bookstores on my own, but it was the time factor that was a huge stumbling block (along with getting enough books to make a decent looking catalog).
So, thank you, Dean (and all the wonderful people at Ella making this happen). This gives me the chance to get my books into stores a lot sooner and with a lot less time-sacrifice to the two things that matter most: family and writing.