The Skinny on Self-Publishing Companies: Is it the Best Option for You?

Guest Post by Pete Masterson

There are three basic ways to become a published author:

1. Have your manuscript accepted by a traditional trade book publishing company. You risk no money (beyond properly preparing your manuscript) and there is no cost to you. You will receive a modest advance (as a first time author) and, if the book sells, a royalty once the advance is paid off (most books never pay off the advance). Many trade publishers only give about 3 months for a book to show acceptable sales before withdrawing it from the market. Authors are expected to provide a significant amount of (unpaid) effort in marketing the book. Some small traditional publishers offer very small advances and will let a book remain on the market longer, giving some titles the time they need to establish themselves in the market. WIth larger publishers, you’ll usually need the services of an agent. Smaller publishers may be willing to work directly with an author.

2. Become a true independent self-publisher. You do the production work or hire the work out. You pay all the expenses of publishing and take on the risk of success for your book. There is a level of effort to this, but it is the most likely route to success for an author who is not published by a traditional trade book publisher.

3. Use a “self publishing” company to publish your book for you. You pay all the costs of publication, but you do not own any of the work you’ve paid for. You will sell very few books. This is discussed at length below.

So called "self-publishing companies" (actually subsidy publishers) are not, per se, a bad thing. However the substantial majority, especially among the most popular, operate with various levels of unethical behavior.

Essentially, the unethical subsidy publishers prey on the hopes and dreams of authors to become "successful. " Many, embarrassed at their naivety, neither complain to government authorities nor admit to friends and family -- or to other potential victims -- that they were "taken."

Subsidy publishers are easy, fast, and sometimes cheap — but they are also often a mistake. You pay up front, use the publisher’s ISBN, and most use a “POD” business model so you only print books as you need them.

POD is Print On Demand. It is a technology. It produces commercially acceptable work. It is used, thorough Lightning Source, Inc (LSI) for a true one-order=one- book system with distribution through Ingram. The “global distribution” offered through the subsidy publishers is that they almost always use LSI/Ingram for distribution. Any independent self-publisher can use this service directly. Some 4 million books were produced this way in 2007.   

If an author simply wants to hold a book of their work in their hands (a valid desire) then a subsidy publisher may be a reasonable choice, the cheaper the better. If an author realizes that a book they've written does not have a market beyond 100 or so copies, then a subsidy publisher is a valid choice. However, if the author has other aspirations, then the choice of a subsidy publisher quickly becomes problematical.

The best candidates for subsidy publishing are books that have little or no market interest. Typical candidates are church cook books, poetry (that generally has little market potential), family histories, or memoirs by someone who has done nothing memorable.

The immediate downside to subsidy publishing is that:

- You will have no credibility as a published author. Only those few people who don’t recognize the subsidy publisher’s name won’t immediately know you used a subsidy publisher.

- You will not get reviewed by Publishers Weekly, Library Journal or any of the other important pre-publication reviewers.

- Few, if any, reputable review publications will review the book.

- You will not get your book into mainstream distribution. Booksellers are very unlikely to order the book, although you might get a local store to accept a few copies as “local author” if they feel sorry enough for you. (Recently, an acquaintance was told they had to pay $400 to a bookstore to hold an author signing event for their book published by Author House.)

- Most of the time, the books will be priced above the market for similar sized books in a particular genre. Since subsidy published books include an extra profit for the subsidy house, the common trade discounts are not possible, so either the book will be sold with “short” discounts (making retailers unwilling to stock it) or at in inflated price to cover the necessary discounts in the supply channel (overpriced books don’t sell).

- Many subsidy publishers needlessly tie up your book with license terms that cut them in if you resell the book to another publisher (one wants 10% of any advance you get) or otherwise make it difficult to withdraw the book and republish it for yourself. There are a few who offer reasonable, time limited, non-exclusive contracts. It is vital that you read and understand any publishing contract offered to you.

- Production work done by subsidy publishers is usually mediocre, at best, and incompetent at worst. And there may be extra expenses not covered in the basic advertised price. Extra charges for cover design, charges from copyright registration, charges for using the publisher’s ISBN are often “required” options. Even after you pay for a cover design, etc, if you republish, you may not “own” the design and will have to pay additional extra charges for your typeset interior and cover files — or be forced to hire someone to do it over from scratch. Be sure to check the contract for these “extras” and to see if any rights of use are transferred to you for artwork you pay for.

- You won’t sell many books. Paraphrasing from the New York Times (March 1, 2004) article, “Got a Book in You?…”, they report: Many titles sell just 150 to 175 copies. [Figures I’ve derived from subsidy publisher press releases suggest just 40 to 100 copies.] Many authors are happy to pay for 50 or 100 copies to give or sell to family and friends. Forty percent of iUniverse’s sales are made directly to the authors. Susan Driscoll, president and CEO of iUniverse, is quoted in the article as saying: only 84 titles out of 17,000 published by iUniverse have sold more than 500 copies — and only a half-dozen have made it to Barnes & Noble store shelves. (While this article is now several years old, there's no indication that the situation for authors has improved. -- about 1/2 of 1% of iUniverse books achieve sales above 500 copies. Based on press releases from other subsidy publishers, that result is typical.)

Lulu.com was most explicit about its business model. In a 2006 article in the Times (Great Britain), its founder stated the company goal: “... to have a million authors selling 100 copies each, rather than 100 authors selling a million copies each.” Very few Lulu titles have sold even 500 copies.

The less-than-ethical subsidy publishers may call themselves “self publishing companies” — a term that’s clearly an oxymoron. If you don’t own the ISBN, you’re not self publishing. Others may call themselves “POD publishers” — POD — printing on demand — is simply a production method. It’s nothing special that a publisher can claim as a unique idea. Anyone can use POD methods to their own advantage (and actually make money, which can’t be easily done with a subsidy publisher). (See Aaron Shepard's POD for Profit for one approach on how to do this.)

There are a handful of subsidy published book success stories: A few books have been resold to major publishers. One, Legally Blond, was made into a movie after achieving best seller status. You’ll hear about this and other triumphs — but not about the other 400,000 titles per year where the authors don’t even recoup their set up costs.

Some subsidy publishers claim to not charge, but actually have a variety of costs and fees. One, Morgan James Publishing, claims it doesn’t charge to publish your book — and also claims to pay generous “royalties.” However, they require all authors to take a $5000 “marketing course” before they’ll publish your book. You also get 10 copies of your book for “free.” (If the marketing course is actually valuable, this may not be a bad deal. I have no way of knowing without spending the $5000 to take the course.)

One of the most notorious subsidy publishers is PublishAmerica. They claim to be a selective, traditional publisher — they pay an advance of $1. That’s right, one dollar.

While they claim to be selective, in reality, they publish anything. Some writers have tested their selectivity claim: one submission consisted of the same 30 pages repeated 10 times (to make a 300 page manuscript). PublishAmerica never noticed any problem with the manuscript. Another ‘sting’ manuscript was written as the worst manuscript possible. See
<http://www.critters.org/sting/> to read the story of Atlanta Nights by Travis Tea (say that fast — travesty). What PublishAmerica does is they persuade authors to buy lots of copies of their books. PublishAmerica once even claimed to have a “partnership with the New York Times” (they actually just bought some ad space) and if authors would just buy 500 copies of their book, then they’d be featured in the NYT (ad). Of course, this resulted in zero book sales to any of the authors. See
<http://absolutewrite.com/forums/showthread.php?t=10211> for more about PublishAmerica and its practices.

More generally, unethical subsidy publishers simply offer more than they deliver — but their contract actually doesn’t commit them to deliver much of anything. Extravagant advertising claims are backed up with fine print contract language that specifically negates any advertising claims that may have been made. (Such a deal!)

Many companies offer “marketing packages.” They write rather ordinary media releases and widely send them out — usually to be simply tossed out by the receivers. You may as well put your money in a shredder. They send review copies (printed at your expense) to reviewers, who dispose of them out-of-hand when they see the subsidy imprint. (The reputable reviewers know who they are.)

I must emphasize that while there are many subsidy publishing scam artists, there are a handful of these publishers who are ethical. So, be sure to read contracts and check references. Be sure to read relevant web sites such as the Preditors & Editors™ web site warnings page:
<http://anotherealm.com/prededitors/pubwarn.htm>. It has tips to help you recognize the scam publishers (and literary agencies). Also check out the Writer’s Beware web site by the Science Fiction and Fantasy Writers of America, Inc.
<http://www.sfwa.org/for-authors/writer-beware/>
<http://www.sfwa.org/for-authors/writer-beware/pod/>

Finally, visit the National Writer's Union web site
<http://www.nwu.org> and read their information about publishing abuses.

Some Subsidy publisher figures
See Dan Poynter's Web site for more publishing statistics:
<http://www.parapublishing.com/sites/para/resources/statistics.cfm>

Xlibris has paid out $1 million in royalties to some 9,000 authors since the company was founded in 1997. (About $111. each.)
--Publishers weekly, March 17, 2003.
http://www.PublishersWeekly. com

Xlibris sold 300,000 copies of the 9,000 titles published since 1997 (33 sales per title).
--Moira Allen in The Writer, June 2004. http://www.WriterMag.com

Xlibris published 10,269 titles through March 25, 2004. 352 or 3.4% had sold more than 500 copies.
1,463 or 14.3% had sold more than 200 copies.
The average per-publication sale number of an Xlibris title is about 130 copies.

Xlibris grossed $2.5-million in 2000 and should do $8-million in 2004.
--The Wall Street Journal, April 24, 2004. (Note: the bulk of this revenue comes from authors, not from sales of books.)

iUniverse says their 10,000 titles have sold 750,000 copies (75 copies/title) .

Of iUnivers's 17,000 titles, only 84 have sold more than 500 copies.
--Moira Allen in The Writer, June 2004. http://www.WriterMag.com

Only a half dozen of iUniverse's 17,000 titles made it to Barnes & Noble store shelves. This was mainly due to the unattractive discount structure.
--Moira Allen in The Writer, June 2004. http://www.WriterMag.com

More iUniverse figures
http://www.publishersweekly.com/article/CA601501.html

Authorhouse claims their 18,500 titles have sold 2 million books (108 books/title) .

Pete Masterson is the author of Book Design and Production: A Guide for Authors and Publishers. He founded Aeonix Publishing Group (www.aeonix.com) in 1997 after having owned a print shop, managed a book oriented typesetting service doing work for large and medium sized publishers, and after managing the publications and graphic production contractor at NASA Ames Research Center. He recently retired as a publishing consultant, book designer, and cover designer. During his career he pioneered POD production for railroad publications at Southern Pacific Railroad, and was an early participant with desk top publishing in a print shop setting. He has supervised production of more than 1000 publications. Currently, he is focusing on sales of his book and in sharing his publishing knowledge with the independent publishing community.