Money to Be Made with E-books

E-books are potentially very lucrative for authors. And the best part is that they require little money to produce. My uncle forwarded me a link to an article on DailyFinance called How E-books Are Changing the Economics of Writing by Karen Dionne I thought I would share a portion of it with you:

In November, The New York Times reported that approximately 9 million electronic reading devices are in use in the U.S. When holiday purchases are tallied, that number will most certainly go up. While there are many different kinds of e-readers, they share one thing in common: They need to be filled with books.

Two years ago, e-books constituted 1% of total book sales, a figure that’s now closer to 10%. As electronic media accounts for a larger and larger portion of the book business, consumers are benefiting from lower prices for books, and manufacturers are enjoying massive sales. But how is the e-book revolution affecting authors?

A Boon for Self-Publishers

For an author under contract with a major publisher, not much has changed. Most publishers still insist on acquiring electronic rights along with print at the royalty rate that’s been in place for years: 25% of net profits. Amazon (AMZN), on the other hand, offers authors a whopping 70% of net profits for e-books sold in the U.S. Admittedly, the online retailer carries a large number of caveats, most notably that the book must be priced between $2.99 and $9.99. Barnes & Noble (BKS) and Apple (AAPL) offer similar royalty rates.

This raises the question of whether an author can really make money with a book priced so low. J. A. Konrath, author of the traditionally published Jack Daniels mysteries and nearly a dozen self-published e-books, offers an interesting perspective on the numbers behind the e-book/traditional publishing dilemma.

“I have an acquaintance who is a New York Timesbestseller,” he notes. “She got a great advance. But I’m on track to earn $200,000 this year on e-books alone, and the e-book market is still in its infancy. If she’d kept the rights and self-published her e-book, I bet she would have earned more money in three years on her own than she will with her publisher.”

Konrath offers a breakdown: “Her Kindle book is priced at $9.99, which earns her $1.75 per sale. I’m pricing books at $2.99, and making $2.09 per book. Currently, I have seven self-published e-novels earning more than $24,000 a year each. I wish I had more novels that I couldn’t sell [to traditional publishers], because I’m making a nice chunk of change with them on Kindle.”

See full article from DailyFinance: http://su.pr/1z6gwf

While it is important to have your books available on the Kindle and iBookstore you should also have them available for purchase on your own website. It’s not that hard to set up a simple web page where your fans can purchase and download your book directly from your site. One benefit of this is that instead of getting only 50%-70% per copy you receive 100% less per transaction fees (PayPal charges 2.9% + $.30 a transaction). Therefore if you have an e-book that you sell for $4.99 from your site your net profit from each sale would be $4.55 (4.99 – 2.9% – .30).

Now for the disclaimer: Just because you have an e-book does not guarantee success.  It’s still up to you to market it. But if you are willing to develop an online presence and market your e-book, the opportunity to make money selling your e-book is real.

I hope this information motivates you to take advantage of the tremendous income opportunity that e-books provide.