Publishing books is one of the most popular ways to make money online. Everybody wants to publish their own book. This is because being a writer is a very glamourous job. It’s cool, it’s intellectual, and you have a shot at making big money. Unfortunately, book publishing is an extremely difficult game to get into, and I don’t recommend you do it unless you have a lot of money behind you. Writing is fun, but banging your head against the wall isn’t. If you’re looking make a great living and live large as a result of your writing, I don’t recommend you get into publishing books, especially not novels.
Most books don’t sell a lot of copies
And you probably know that. I knew that when I started writing. I figured that I could build a niche audience with my books by publishing a lot of them. My lengthy catalogue would create a high(ish) ticket sales-funnel, right? This strategy can work, but it’s a lot harder than you think. You first book will barely sell any copies unless you push it hard, and KDP Select is not profitable. It takes a lot of effort to make even a few hundred dollars per month, and here’s why.
The ebitda multiple for publishing companies is 12
This is a very high number. An EBITDA multiple is the number that you multiply your profits by in order to come up with a valuation for your business. It’s a much better way of thinking about business valuations than using revenue as a benchmark. How much money are you making? The EBITDA multiple answers that questions. A normal EBITDA multiple for a business is .5 – 1.5. These are your laundromats and law firms. Services with high cash flow and relatively high risk. Publishing companies are apparently seen as low-risk, but that comes at a cost.
A $10,000 a year publishing business is worth $120,000. If you’re an average person, you have to create an immense amount of value…just to live a below average lifestyle. Only 10% of people on this planet are able to reach a $120,000 net worth. You probably want to be pulling in more than $10,000 a year for your efforts.
Most book sales are Romance Novels
This is the first, and most important thing to know. Romance makes up the bulk of sales on indie publishing platforms. This number is probably less skewed on Amazon or at Barnes and Noble, but still. The vast majority of successful writers are Romance authors who are practically glued to their keyboards. If you aren’t writing Romance, then writing should either be done on social media, or for fun. You will not get rich writing books unless you are an expert in another field.
It takes time to write a book
It also takes time to start a blog, but blogs are far more lucrative than books. 200 posts contain the same amount of words (200,000) as a long book. Those 200 posts could yield thousands of dollars in recurring revenue. A single book is pretty much guaranteed not to. In the short run, your blog will probably earn you as much or a little less than your book. If you write blog posts as fast as a Romance author (600-800 posts per year), you’re on track to enter a different league when it comes to making money online. 60,000 views per month is easy when you’re publishing at that pace. You could be making 6 figures from blogging in the time that it takes to reach four figures from book publishing. Remember, Amazon takes a 30% royalty from each sale and raises that royalty to 65% if you price your book over $10. At $7 per sale, you need more than 140 sales to earn $1,000. This is a lot of sales. Do you want to spend 3 months earning $2,000? Hard pass on publishing as a way to make a living. At pretty much all stages. It takes too long to write enough books necessary to make a solid living.
How rich should you be before publishing a book?
This is the good news. You don’t need to be so well-off if you’re from a 1st world country. I would say that publishing books, from a business standpoint, is for those who have a net worth of over $300,000. If you’re reasonably well off, and have time to let the money trickle in, writing some books and making an extra $800-$1,000 per month can be fun. But you shouldn’t expect to make a lot of money, unless you have a knack for social media or have a truly groundbreaking story.
Social media can make you rich writing books
This is the massive caveat to this whole article. If you’re passionate enough about a subject or story that you feel you can write and promote a really good book, you can do it. Just be prepared to fail once or twice, even if you put in a lot of work. TikTok does wonders for aspiring writers, because it allows you to promote your product quickly. One video has the potential to go viral, and TikTok allows anyone to record a quick video and upload it. You can post ten TikTok videos daily if you want, all for the sake of promoting your product within your region. If you truly want to become an author, I think you should bite the bullet and put your face on TikTok. It obviously helps to be attractive.
Whether you’re writing books under a penname or attempting to become a TikTok star, I would not recommend that you start publishing books for the sake of making money until you have a 6-figure nest egg under you. Publishing money is very stable, but it’s also slow. You’ll be making small royalties for the rest of your life with a good book. Not getting rich quick. Your entire business also hinges on the cooperation of a few online shops. Basically, book publishing is hard to start, easy to fail at, and unlikely to significantly pay your bottom line. I wouldn’t get into it unless I was either passionate or wealthy. Especially since anyone in the world can upload a book to Amazon nowadays. It’s a very competitive business, and it can be hard grind for not much reward. Perhaps publishing one or two books on the side can work for average people, but going all-in on publishing is for those who are already well set-up.
Thanks for paying attention.
